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1Scan for outdated or missing drivers - takes under a minute2Repair Windows errors before they cause bigger problems3Fix the driver behind crashes, sound loss and screen glitchesSingapore’s Land Transport Authority (LTA) is consulting on merging Category A and Category B car Certificates of Entitlement (COEs) into one passenger-car category, with rebates for lower-value cars and surcharges for higher-value ones. The proposal is not approved policy: LTA is seeking feedback from 8 October to 2 November 2026, and key decisions—including the adjustment bands, treatment of renewals and future of Category E—remain open.
What would change if Cat A and Cat B were merged?
Today, passenger cars bid for COEs in separate Cat A and Cat B categories, distinguished mainly by engine capacity and power, with separate thresholds for fully electric cars. Under LTA’s proposal, those categories would become one car bidding pool. A value-based rebate or surcharge would then adjust the prevailing COE price according to the car model’s proposed band.
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A COE is the entitlement to own and use a vehicle in Singapore, and is valid for 10 years. The proposal would change how passenger cars are categorised and how their COE cost is adjusted; it would not itself add COEs to the available supply.
Why is LTA reviewing the categories?
LTA says advances in vehicle technology, particularly electric cars, have made engine capacity and power less effective ways to distinguish mass-market cars from higher-value ones. Manufacturers can adjust specifications so that some higher-value models meet Cat A thresholds. That can bring buyers who previously competed in different categories into competition for Cat A COEs.
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The price pattern has also shifted: Cat A COE prices exceeded Cat B prices on three occasions between February and June 2026, according to LTA’s consultation paper. The COE system began in 1990; passenger cars were reorganised into the current A/B structure in 1999, an engine-power criterion was added in 2014, and the Cat A power threshold was raised in 2022 to accommodate newer mass-market electric cars.
LTA frames the review against Singapore’s limited land and vehicle capacity. Its 2026 consultation paper says roads occupy about 12% of the country’s land area and that about 660,000 passenger cars are shared across 1.5 million households. It also reports average COE revenue of S$5–6 billion annually over a ten-year cycle.
How would the value-based rebate and surcharge work?
LTA proposes using each car model’s median Open Market Value (OMV) to assign its feebate band. OMV represents the value at which a vehicle was imported and is used to calculate Additional Registration Fee (ARF). LTA considers it a useful starting point because retail prices can vary with discounts, marketing, dealer practices and financing, while acknowledging that exchange rates and supply-chain differences can affect import values.
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LTA says it would use past model data where available and a proxy—such as an individual vehicle’s OMV—where it is not. Bands would be based on OMV percentiles, reviewed annually and published so buyers could check a model’s band before purchase. Retailers would be able to appeal an assignment.
The adjustment would be applied to the prevailing COE price. In effect, buyers of cars in rebate bands would pay less than the unadjusted premium, while buyers in surcharge bands would pay more. The purpose is to preserve a price distinction between lower-value and higher-value cars even though they would bid in the same category.
What are the three-band and five-band options?
LTA has put forward two illustrative structures for feedback. Both are based on cars registered in 2025; they are not final model assignments or a promise of what a particular car would pay if the policy is adopted.
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| Structure | Proposed adjustments | Trade-off identified by LTA |
|---|---|---|
| Three bands | S$15,000 rebate; no adjustment; S$15,000 surcharge | Simpler to administer, but creates larger jumps between adjacent bands. |
| Five bands | S$15,000 rebate; S$7,500 rebate; no adjustment; S$7,500 surcharge; S$15,000 surcharge | Smaller steps and less difference between broadly comparable models in neighbouring bands, but a more complex administrative process. |
In either illustration, the largest difference between the two ends is S$30,000: a S$15,000 rebate compared with a S$15,000 surcharge. Actual bands, amounts and model assignments have not been decided, and annual reviews could change which band a model falls into.
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One free scan finds every outdated or missing driver and matches the right update for your exact hardware.Free scan · exact hardware matchWould the merger make COEs or cars cheaper?
Not necessarily. LTA says the proposal is intended to distinguish what lower-value and higher-value car buyers pay, not to lower overall COE prices. A single bidding pool would still be shaped by demand and available quota; merging categories does not increase the total number of COEs.
As CNA’s analysis of the proposal notes, a common premium could still be high depending on the marginal bidder and how buyers respond. The rebate may reduce the effective COE cost for a lower-value car relative to the unadjusted premium, but neither a lower premium overall nor a lower car price is guaranteed.
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Would the feebate apply to COE renewals?
LTA is asking whether the adjustment should apply when an owner renews a COE. Under the current system, renewal uses the Prevailing Quota Premium (PQP). LTA says Cat A and Cat B PQPs have converged in recent years, leaving existing owners with broadly similar renewal premiums.
One unresolved choice is whether renewals would also receive a value-based adjustment, or whether the feebate would be limited to new registrations. LTA has raised transitional arrangements as a possibility if a merger goes ahead, but has not decided the renewal rules.
What could happen to Category E?
Category E is the open COE category, usable for any vehicle except motorcycles. LTA says it has mostly been used for Cat B cars in recent years. If Cat A and B merge, continued use of Category E mainly for cars could come at the expense of goods vehicles and buses bidding in Category C.
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| Option under consultation | Potential benefit | Potential drawback |
|---|---|---|
| Remove Category E | Simplifies the category system. | Urgent car buyers could have to wait until the next bidding exercise. |
| Retain Category E for car registrations only | Preserves an option for urgent car buyers. | Continues an open-category route for cars; LTA says this could be designed without affecting Category C supply. |
LTA is consulting on these alternatives; Category E’s future has not been settled.
When does the consultation close, and what happens next?
Feedback is open from 8 October 2026 at 5 p.m. through 2 November 2026 at 11:59 p.m. It can be submitted through the official LTA/REACH consultation page. LTA expects to complete its review by the end of 2026 and share findings and recommendations in the first half of 2027.
Until then, the proposed merger itself, the number and size of feebate bands, renewal treatment, Category E’s role and any implementation details remain undecided.
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