Cost of cars in Singapore may rise in the future. The Ministry has plans to reduce the annual allowable vehicle growth rate from the current 0.25 percent to zero.

The plan was announced by Senior Minister of State for Transport Josephine Teo, who spoke in Parliament yesterday.

The announcement is the reverse of what Transport Minister Lui Tuck Yew said in 2011, who then rejected the idea of reducing the growth rate to zero as it will go against the aspirations of people who want to own a car.

The Straits Times reported that no indication was given on when the cut would happen, stating that it may be a 'likelihood' in the future.

Motor traders said growth dropping from 0.25 to zero percent would be insignificant in the near term on the back of an imminent Certificate of Entitlement (COE) supply.

However, General Manager of Nissan agent Tan Chong Motor Mr. Ron Lim told the local papers that the effect will be stark when COE numbers start falling again in five to six years.

Against a growing resident population and rising affluence, prices are likely to climb because of growing demand for an increasingly scarce commodity.

Mrs. Teo said, "As long as incomes continue to grow, it is unlikely for private car ownership to be a low-cost transport option."

Singapore Vehicle Traders Association Secretary Raymond Tang rebutted that the COE system becomes redundant if there's zero growth, as new cars will become a one-for-one replacement for older ones.

Some experts however, reckon car buyers need not be overly worried about the cut as it was not an immediate move and predicted it would not be a permanent move.