Car tax prices in Singapore, one of the world's most costly places to buy vehicles have plunged to a record low of just two dollars for small cars, from over S$10,000 ($6,549) last month, as demand stalled.

The Certificates of Entitlement (COE), which allow Singaporeans to own a car, also slid 59 percent to S$4,889 for bigger cars in an auction on Wednesday, transport regulator the Land Transport Authority said on its website

Snall cars are classified as below 1600 cc.

"You are not sure you will have a job," said Song Seng Wun, an economist at Malaysian bank CIMB in Singapore. "There is less incentive to buy a new car."

Dealers said they expected car prices to fall sharply which could trigger renewed demand. "We will be expecting more business -- especially within the next few weeks," said Didi Farali.

Singapore fell into a recession in the third quarter, the first in Asia, hit by the global financial crisis, leading to layoffs at the country's top bank DBS and slashed corporate earnings.