Certificate of entitlement (COE) prices ended lower across the board at the latest tender yesterday, with the premium for smaller cars taking the biggest tumble.
COE prices for cars up to 1,600cc and 130bhp - which constitute one-third, or the single largest category, of the quota - fell by 26.4 per cent to end at $27,000.
One of the biggest corrections since the COE system started in 1990, it brought the premium for mass market cars to where it was before recent spikes.
COE prices for cars above 1,600cc and 130bhp posted the second-biggest fall of the day, sliding 11.3 per cent to end at $42,564.
The premium for Open COEs, which can be used for any vehicle type except motorcycles, but end up mostly for bigger cars, finished 10.5 per cent lower at $47,000.
Industry players attributed the sizeable correction to fresh sales having practically ground to a halt following sharp increases in recent tenders. They expect the latest prices to reignite buying interest, but consumers may still hold out for bigger price drops before returning to showrooms.
Mr Ron Lim, head of sales and marketing at Nissan agent Tan Chong Motor, described the latest results as "weak buying sentiment being truly reflected".
"In the last few rounds, despite the weaker buying, dealers were still bidding aggressively... to clear their backlog," he noted.
Mr Lim said yesterday's tender would have "collapsed" if not for last-minute bids. Right up to the final five minutes before the tender closed at 4pm, the premium for 1,600cc cars was around $17,000.
Motor traders said new car sales had slowed considerably in the past two weeks after the COE premium for 1,600cc cars shot up to a one-year high of $36,704.
"The market was totally dead," one remarked.
The COE premium for bigger cars, which has been driven up by private-hire demand despite a growing idle fleet, is still relatively high after the latest fall. Industry watchers reckon it will not fall significantly unless upcoming regulatory changes address the oversupply of vehicles.
Meanwhile, the COE premium for commercial vehicles slid by 4.1 per cent to settle at $27,400. Motorcycle COE prices dropped by 4.5 per cent to reach a four-month low of $3,202.