LTA seeks public views on merging COE Categories A and B into single car category with feebate system

SINGAPORE: The Land Transport Authority (LTA) has launched a public consultation on proposed changes to the Certificate of Entitlement categorisation framework for cars. The LTA announced that they were seeking views on whether Categories A and B should be merged into a single passenger car category with a fee-and-rebate system based on vehicle value.

Mr Lim Zhijian, LTA Chief Operating Officer, said: “Singapore’s COE system has served us well for more than three decades as a market-based, open and transparent framework for managing vehicle ownership. As vehicle technology and the vehicle market continue to evolve, it is timely to review whether the current categorisation of cars remains fit-for-purpose.”

“Through this consultation, we invite the public to share their views on the proposed changes and trade-offs involved, so that the COE categorisation framework can remain relevant and continue to appropriately distinguish between mass-market and higher-value cars,” he added.

The consultation runs from Oct 8, 2026 at 5 pm to Nov 2, 2026 at 11:59 pm, with feedback to be submitted at go.gov.sg/coe-pcd-feedback.

Why the current system is becoming less effective

Since 2014, engine capacity and engine power have been used to distinguish between mass-market and higher-value cars under the COE framework. However, advances in electric vehicle technology have made these criteria increasingly problematic; manufacturers can now adjust vehicle specifications to fit within Category A thresholds, meaning more buyers compete for Category A COEs than was originally intended.

The result: The price gap between Categories A and B has been narrowing. Between February and June 2026, Category A COE prices exceeded Category B prices on three separate occasions, which would be a situation that would have been counterintuitive under the original design, where Category B was intended to carry higher prices as the premium car category.

What is being proposed

Based on suggestions from more than 200 members of the public, academics, and automotive industry representatives consulted through focus group discussions in April and May 2026, LTA has developed a preliminary proposal to merge Categories A and B into a single passenger car category.

To ensure buyers of higher-value cars continue to pay more than buyers of mass-market cars, a feebate system based on the value of the car would be introduced, with buyers of more expensive vehicles paying a fee and buyers of less expensive vehicles potentially receiving a rebate.

LTA is also seeking views on how Category E should be adjusted if the merger proceeds.

The consultation paper also summarises other suggestions received, including allocating COEs based on family needs, supporting individuals to bid directly for COEs, adopting a pay-as-you-bid system, creating a separate category for private hire cars, and imposing surcharges on multiple-car ownership.