For the first time in 23 years, the COE car for a luxury car like a BMW 5 series or Porsche is now cheaper than one for a Toyota.
COE prices in the first tender since tighter loan policies were announced last month saw prices for cars above 1,600c plunge over S$34,000 in the latest COE bidding results released on Wednesday.
The new price? S$58,090, a steep drop from the previous price of S$92,667.
Prices for the Open COE also fell sharply to $65,001, down over S$26,000 from $91,910.
In contrast, COE for cars up to 1,600cc finished at $74,689, just down slightly from the $78,301 before the stricter loan policies and tiered taxation system were announced.
This means that a buyer interested in a standard Toyota model like an Altis is expected to pay a COE of about S$74,000 while another who is keen to buy the latest BMW 5 Series only pays just over $58,000 -- nearly S$16,000 cheaper.
Car trader Elton Lim told Yahoo! Singapore "it's all to do with the newly introduced Additional Registration Fee (ARF) scheme".
In the new tiered scheme which kicked in this month, a car with an Open Market Value (OMV or approximate cost price) of up to $20,000 will be taxed at the current rate of 100 per cent.
After that, cars whose OMV value is S$50,000 and below will be taxed at 140 per cent, while any OMV above $50,000 at 180 per cent.
"Cars that are OMV S$20,000 or more are usually cars that are 1600cc and above. However, it doesn't mean Cat B (cars up to 1,600cc) cars are cheaper, because now their ARF are higher, even though their COE has fallen sharply," he explained.
Earlier in the day, Transport Minister Lui Tuck Yew said the COE market will not undergo any changes "in the near term".
Assuring the many MPs who asked that the COE bidding system be reviewed, Lui said he would study their suggestions and respond at an appropriate time.
He explained that following heavy car loan curbs implemented last month, it would be "best that we let them (COE marker) take time to settle".