"It may be a blessing in disguise, since high PQPs will mean fewer people extending their COEs and more cars scrapped," Mr Tang said. "And that will mean a bigger quota later."

Explanation: The most important factor that affects
the demands for goods is the price of the goods itself. When the price of COE
is high, there will be lesser demand in cars. Instead of buying cars up to 1600cc
and 130bhp, customers will find a substitute or complement that is cheaper.  Therefore, there is a change in quantity
demanded as demands for cars will drop.

Topic: Externalities 

Point: The increased price of small-car COE resulted in higher prevailing quota premiums and this affected motorists, a cost on a third party , as they had to pay for the increased cost to extend the validity of their vehicles.

Evidence: But the relatively high prices now will translate into higher prevailing quota premiums (PQPs, which are paid by motorists who want to extend the validity of their vehicle COEs).

Explanation:
There was a rise in the small-car COE price by 10% that then caused the prices of prevailing quota premiums, PQPs to increase which is paid by motorists instead of small cars. Therefore it's an externality as it is a cost that falls on the third party, motorists.

Topic : Market Equilibrium 

Point: Market is adjusted to its equilibrium. There is not much of changed in the COE price of cars above 1,600 cc or 130bhp. 

Evidence: ‘That for cars above 1,600cc or 130bhp was hardly changed (up 0.02 per cent) at $48,010.’ 
https://aas.com.sg/resources/coe/coe-prices.html

‘Yong Lee Seng Motor managing director Raymond Tang said the market was expecting car premiums to drop by a few thousand dollars as the shrinkage of car COE quotas had already been accounted for in the past two or three tenders.’

‘The fact that prices did not fall showed that back orders may still be healthy, even if showrooms were quiet over the weekend, he added.’

Explanation: The COE price of cars above 1,600cc only increased by $10 as compared to previous months there was a significant increase or decrease but from the months April to May, the COE price for cars above 1600cc did not have a significant change. 
Adding on, since there is an increase in the price of COE of around $5000 in the month of April, there might be a shortage in the supply of cars. Hence, to reduce the demand, there is an upward pressure on price, using price to increase. Therefore, in the next month, market equilibrium has been attained. There might be a surplus/ shortage in cars the previous months till market equilibrium is attained in may 2019. When market reaches equilibrium, price will remain constant which shows that demand for cars remains the same.