By Christopher Tan

TURMOIL in the world's financial markets appears to have ruined the appetite of Singaporeans for big cars.

At the latest certificate of entitlement (COE) tender yesterday, premiums for cars above 1,600cc dropped by almost 50 per cent to $7,589.

The price, which came amid across-the-board decreases in COE premiums, was the lowest in nearly two years.

Motor dealers attributed the massive correction to the global financial meltdown that has battered stock prices and consumer sentiment.

Mr Mark Choong, chairman of Toyota distributor Borneo Motors, said big car buyers are the people "with money to invest, and they are currently more concerned with other things than buying a car".

Industry watchers said buyers have already started downgrading to smaller models, which is partly why COEs for cars up to 1,600cc did not fall as sharply yesterday. Still, they ended 20 per cent lower at $10,989.

Likewise, the Open COE, which can be used for any type of vehicle, fell by 20 per cent to end at $12,001.

Even commercial vehicle and motorcycle premiums took a beating, falling 28 per cent and 15 per cent respectively to close at $11,503 and $1,609.

The double-digit drops took place despite a roughly 10 per cent dip in COE supply effective from this month.

The Government revised the supply after figures revealed that fewer cars were taken off the road this year. Singapore Vehicle Traders Association secretary Raymond Tang said the economic downturn has encouraged more people to buy used instead of new vehicles, and hence contributed to the lower demand for COEs.

According to Land Transport Authority figures, used car sales in the July to September period averaged 2,538 a month ? 20 per cent more than the corresponding quarter last year.

Meanwhile, many dealers reported thinner crowds at showrooms over the past two weekends.

Motor Traders Association president Tan Kheng Hwee said: "With such bad news in the media every day, it is not surprising that demand was weak."

Showrooms were quick to cut car prices yesterday.

Borneo lowered Toyota prices by between $2,000 and $4,000, while Honda agent Kah Motor's prices were down by $2,000 to $2,500. Over at Nissan agent Tan Chong, prices were slashed by $3,000.

Still, Mr Choong of Borneo said the price cuts were unlikely to send buyers flocking to showrooms.

"Some people will come, but there won't be a big rush," he said.

This article was first published in The Straits Times on Oct 23, 2008.

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COE premiums for all categories fall across the board for the second open bidding in Oct.

The premiums for cars above 1,600cc dropped drastically. It ended at $7,589, a gaping 47 per cent fall from the previous price of $14,400.

Prices for the rest of the categories experienced similar negative effects.

The COE price for taxis (Cat A) dropped by 20.3 per cent to end at $10,989 while the COE price for Cat C dipped by 27.6 per cent to end at $4,396.

Premiums for Cat D finished off at $1,609 from $1,899, a 17.4 per cent decrease.

Likewise, Cat E premiums also dipped to $12,001 from $15,058, a 20.3 per cent decrease.