With COE (Certificate of Entitlement) prices skyrocketing, it is little wonder that many motorists have chose to hold on to their cars for longer periods. The high cost involved in new car ownership has also prompted many to go for pre-owned alternatives on the used car market.

In 2007, COE prices were below $20,000. A quick look at the last round of COE bidding for 2012 reveals a stark contrast - a minimum of $82,000 for small cars (1,600cc and below); and close to $96,000 for the Open Category. This is a direct result of the shrinking supply of COEs - from more than 100,000 in 2007 to just 27,000 last year.

The high COE premiums have also resulted in aging of the local car population. Currently, just 28 percent of the cars are less than four years old - compared to a substantial 80 percent in 2007.

While people are complaining about new cars getting financially out of reach, the sharp hike in older cars is a cause for celebration for a number of local business owners - specifically those in the field of automotive maintenance.

Car workshop owners have reported brisker business in this period of high COE premiums. The mandatory vehicle inspection (for cars between three to 10 years old) has also induced a crowd at the vehicle inspection centres. This has prompted many of these businesses to revamp their services and cope with increasing demands.

However, not all are optimistic for the future. Speaking to the Straits Times, the President of Singapore Motor Workshop Joey Lim feels the demand may not sustain, and may drop drastically a few years down the road. He expects an influx of COE supply in two to three years' time - when many of the cars are due for scrap at the end of their 10-year cycle.

As such, many in the trade have voiced their concerns on the large fluctuations, calling for a need to tweak the current COE system in order to curb the wide swing in premium prices.