Certificate of entitlement (COE) prices ended higher across the board at the latest tender yesterday as a smaller quota kicked in.
The COE price for cars up to 1,600cc and 130bhp climbed 22.7 per cent to close at $32,725. The premium for cars above 1,600cc or 130bhp finished 1.5 per cent higher at $40,001. The price of the Open COE, which can be used for any vehicle type except motorcycles but ends up mostly for bigger cars, ended 1.6 per cent higher at $40,512.
The commercial vehicle premium finished 13 per cent higher at $27,800, while the motorcycle premium rose by 23.8 per cent to hit a 10-month high of $4,400.
The quota for cars up to 1,600cc and 130bhp for the August-October period is nearly 26 per cent smaller than the preceding three months at 2,112 certificates a month.
The quota for cars above 1,600cc or 130bhp is almost 9 per cent smaller at 2,083 a month. The Open category quota is 5 per cent smaller at 709 a month.
Motor traders said the smaller supply, coupled with the longer bidding period of three weeks - as opposed to the usual two weeks - had led to more aggressive bidding.
Mr Ron Lim, head of sales and marketing at Nissan agent Tan Chong Motor, said: "Cat B (cars above 1,600cc) was up by only $500-plus, signifying a weakness.
"The Cat A (cars up to 1,600cc) situation is more dire because of the drastic quota cut. The huge jump is not unexpected. But that should drastically tame demand going forward. The underlying demand is still weak."
Others however, expect rental firms supplying cars to private-hire operators such as Grab and Gojek to start bidding aggressively again. This is because regulations announced on Tuesday governing the industry did not include a cap on fleet sizes or minimum driver age.