SINGAPORE – Sunday (July 1) marks the first day that newly registered cars previously exempted from the particulate matter criteria will come under the Vehicular Emissions Scheme (VES) – which could mean large tax rebates or surcharges based on the amount of tailpipe pollutants released – but buyers do not appear to be rushing headlong into the market.

Various dealers in the Alexandra and Leng Kee area told TODAY that it is very much business as usual, with no notable differences in the size of the crowds at showrooms on Sunday.

Prospective customers meanwhile said the VES rebates and surcharges will not be the only factor they consider and they will rather be careful than rush into making hasty purchases.

However, there were some deal-hunters actively looking to snap up car models which may come with bigger rebates or are not as affected by the VES as they have lower emissions, such as engineer who wanted to be known as Mr Leong, 39.

"We didn't want to incur the additional S$10,000 to S$20,000, so it is a crucial decision that we have to look out for," he said.

Others like accountant Mrs Wong, 38, said price is not everything.

With a family of seven people, she is eyeing a Honda Odyssey or Honda CR-V, despite them coming with S$10,000 VES surcharges.

"Even with the VES, there are still a lot of other factors that we consider, like how comfortable the car is, how fuel efficient it is and how easy it is to drive," she said.

This new VES for all new cars, taxis and newly imported used cars - which replaced the previous Carbon Emissions-Based Vehicle Scheme (CEVS) – took effect from the start of January. On top of carbon dioxide (CO2) emissions, it assess vehicles on four additional pollutants: hydrocarbons (HC), carbon monoxide (CO), nitrogen oxides (NOx), and particulate matter (PM).

The VES rebate or surcharge for the vehicle is then determined by the worst-performing pollutant of the five being assessed, so as to encourage buyers to choose models with lower emissions across all five pollutants.

From July 1, particulate matter is included in the list of pollutants measured in the scheme.

A civil servant who wanted to be known as Mr Lim, 49, describes the new VES as an "overkill".

"It's hitting the drivers, those who seriously need the car more, rather than tackling the (root) cause of pollution," he said, adding that he is eyeing a Toyota Sienta as a family car.

In the weeks leading up to July 1, some motor dealers have seen a rush of orders by some buyers keen to snap up certain models before they are hit with VES surcharges.

CarTimes Automobile managing director Eddie Loo said he expects sales now to be slightly more "tempered".

Agreeing that while there was "some initial rush" among buyers in the previous week, Mr Ron Lim, head of sales and marketing at Tan Chong Motors, said he expects that "things will be quietened down".

For now, he forsees that people are now "still looking around and comparing prices to get a sense of how it has been impacted (by the VES)".

Dealers say that most buyers are hoping for a further drop in Certificate of entitlement (COE) premiums.

"I think with changes to the (COE prices), the market will eventually re-adjust itself and mitigate this impact... Over time, people will understand these are policy changes that affects vehicle costs and more or less come to terms with it," said Mr Ron Lim.

COE premiums for big and small cars, as well as the Open Category, fell to their lowest in about eight years in the latest bidding exercise that closed in June.

Category B premiums for big cars (with an engine capacity of more than 1,600cc or a maximum power output exceeding 97kW) closed at S$33,900, the lowest since March 2010.

Meanwhile, premiums for small cars (Category A; up to 1,600cc and 97kW) decreased to S$34,110, the lowest since November 2010.

Going ahead, Yong Lee Seng Motor managing director Raymond Tang said it might be a "good time" for buyers to go into the used car market, especially if prices are comparable to the new cars.

Director of used car dealer Inchcape Pre-Owned Jeremy Soh said it would be "closely monitoring" the COE premiums and ongoing promotions for new cars, so as to "be more reactive in terms of pricing strategy".

"We just have to take a wait-and-see approach…It's still too early to tell. Things will only be clearer after the first or second round of COE bidding," he said.

But for consumers like Mr Lim the civil servant, the VES policy is too strict.

"While public transport is efficient, it is not a panacea and we still need private cars (to get around)… However, we have to be very measured in the way we carry out policies, and policies cannot be too skewed towards one area", he added.

Rather than charging consumers up-front, he suggested that it may be better to impose charges based on travel distance and usage, so as to reflect the true cost of pollution.