SINGAPORE: The COE price for small cars, 1,600cc and below, dived by S$10,453 to a historic low of S$2 in the latest bidding exercise.

The next biggest fall was seen in the Open Category COE, which dropped S$3,601 to S$6,889. Open Category COEs are used mainly for cars.

For big cars (more than 1,600cc), the COE went down S$3,412 to S$4,889.

Meanwhile, the premium for commercial vehicles fell S$2,700 to S$6,189.

For motorcycles, the new COE price stood at S$1,012 - down S$497 from the previous bidding exercise.

The last time the COE price plunged in the small car category was in 2001 when it went down to S$101. And the COE price for big cars was a fluke S$50 in 1997.

Car dealers cited the economic downturn as a reason for the latest drop in COE prices. It resulted in Singaporeans being more cautious when buying big-ticket items like cars.

In addition, car dealers said that even if people are interested to buy cars, it is now more difficult to get loans from banks.

One car dealer even estimated that there have been about 30 per cent more rejections from banks compared to three months ago.

But with COE prices falling so dramatically to S$2, dealers are expecting more people to start buying cars.

Ron Lim, Tan Chong Motors' general manager for sales & marketing, said: "Definitely, with COE coming down to this level... we are just not talking about Category A at $2, even across the board in the other categories.

"I'm definitely sure that consumers will come back to the market to look at cars again. But having said that, this expected sudden influx of demand will definitely push up the COEs again."

Hours after the latest COE results were out, some were already shopping for cars.

"Got chance to bid for a new car, cheap COE, why not?" said a man.

"I'm looking around for cars for my family. If Cat A dropped a lot, maybe I might consider," said another.

"Our sales have been pretty low. But today, to my surprise, I got two orders, after the COE (bidding) closed," said a car sales woman.

- CNA/ir