PASSENGER car certificate of entitlement (COE) premiums fell on Wednesday, amid what appears to be an industry-wide slump in demand for new vehicles.
Nicholas Wong, the general manager of authorised Honda distributor Kah Motor, said bookings have been weak as COE prices remain beyond the "comfort level" of many prospective buyers.
Category A, for cars below 1,600cc and 130 hp, fell by S$1,690 to S$55,399; Cat B, for cars above 1,600cc or 130 hp, shed S$2,100 to S$60,001.
But Cat E, the open category which currently tracks Cat B, climbed S$290 to S$61,300.
Elsewhere, Cat C, for goods vehicles, was S$1,512 lower at S$45,289; Cat D for motorcycles slipped S$354 to S$6,158.
The managing director of a Japanese dealership said: "Generally, the whole market is soft. Many people are still waiting for prices to fall further."
He said most customers are looking for a good buy and resist signing on the dotted line because they are confident that premiums will eventually fall.
"Even when we assure them that we will reimburse any difference in COE if it falls, they won't bite," said the managing director.
But now that premiums have fallen, dealers foresee customers returning to the showroom.
Kah Motor's Mr Wong said: "I expect this weekend to be busy."
"After the Cat A premium dropped to the S$55,000 level in the second half of July, bookings improved. So it's good that premiums have come down."
But he also expects the Cat A premium to "immediately rebound" at the next bidding exercise - probably by the same amounts it fell by on Wednesday, if the number of bidders does not change significantly.
Mr Wong said: "Anyway, Cat A cannot go up by too much because of the affordability level of mass-market car buyers.
"But Cat B can swing more because luxury car dealers have bigger margins."
The managing director said: "As it has happened many times before, prices will probably yo-yo after this."