Should Cat A and Cat B COEs be merged into a single car category? LTA seeks public views

The Land Transport Authority (LTA) is seeking feedback from the public on a proposal to merge Category A and Category B Certificates of Entitlement (COE).

LTA made the announcement on Thursday (Oct 8) as it opened an online public consultation, along with details of the proposed changes.

To date, over 200 members of the public, academics and representatives from the automotive industry have shared their perspectives.

According to the authority, the proposal merges Categories A and B into a single passenger car category, with a feebate system based on the value of the car.

This means that those purchasing COEs for lower-value cars will receive rebates, while cars in the mid-range will not be subject to any adjustment. COEs for higher-value cars will attract an additional surcharge.

The details of the feebate system are subject to change depending on the median open market value (OMV) of these vehicles. LTA added that the feebate bands would be reviewed annually.

Separately, LTA is also seeking feedback on how Category E should be adjusted if Categories A and B are merged.

Category E, also known as the Open Category, can currently be used to register any vehicle type except motorcycles, giving buyers and dealers greater flexibility when bidding for COEs.

Explaining the need to review the current COE categorisation system, the authority said that advances in vehicle technology, particularly the rise of electric vehicles (EVs), have made existing categorisation criteria less effective.

Manufacturers are also able to adjust the specifications of their vehicles to fit within the more contested Category A, resulting in more car buyers competing for COEs in that category and narrowing the price gap between Cat A and B.

Recently, the gap between Category A ($130,001) and Category B ($130,100) COE premiums narrowed to just $99.

There were also three occasions when Cat A prices exceeded Cat B prices between February and June 2026.

LTA chief operating officer Lim Zhijian said the current COE system had "served us well" for more than three decades.

However, with evolving vehicle technology and changing market conditions, LTA is reviewing whether the current categorisation framework remains "fit-for-purpose" in Singapore.

"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," Lim said.

LTA invites members of the public to share their views at https://go.gov.sg/coe-pcd-feedback between Oct 8, 5pm and Nov 2, 11.59pm.

The review is expected to completed by the end of 2026. LTA will share its findings and recommendations in the first half of 2027.

Loopholes in current COE system

Associate Professor of Economics at the National University of Singapore, Timothy Wong, said changes to the current system are necessary.

He explained that the current COE categories "no longer reflect the types of differentiation that was intended by the policy".

Category A is meant for more mass-market cars while Category B is intended for luxury cars, so that middle-class buyers are not crowded out by wealthier buyers, associate professor Wong said.

"However, over time, carmakers have brought in more luxury cars under Category A causing the price of the two categories to converge.

"There is a need to revise the system to better serve mass market buyers."

Associate professor of Economics at Singapore University of Social Sciences Walter Theseira also said that the merger aims to address loopholes in the current system.

He explained that the current COE framework allows some buyers "take advantage of the policy" and "get into the category of vehicles which was supposed to be set aside for families and lower income Singaporeans".

"It's always been possible for the market and consumers, to get around the policy to some extent," associate professor Theseira said.

Highlighting the "advent of EVs (electric vehicles)", he explained that technological advancements have enabled manufacturers to design vehicles that would allow luxury car brands to qualify for Category A, even without designing a different vehicle.

"The number of vehicle models which could fit into Cat A basically exploded overnight due to electrification," he said.

With the change, LTA may be hoping that the OMV limit will be a more robust method of differentiating between the luxury and non-luxury vehicles.

"All of these other limits were evaded in time with technology, so what we're hoping is you can't evade the dollar cost of the car," he explained.

Will COE prices be affected?

Associate professor Theseira also weighed in on the possibility of COE prices being affected by the change, stating that it will be "hard to predict" if prices would fall.

"What you can guarantee with this policy is that... people who buy more expensive cars will be paying more for their COEs than people who buy less expensive cars.

"That was not something you could guarantee with the Category A and B division."

He added that the overall COE prices that people pay - inclusive of rebates or fees - may not necessarily be lower or higher.

"That one is actually up to the market," he said.

Associate professor Wong, however, said the changes should benefit middle-income households.

The baseline price of Category A COE is expected to rise while Category B could fall, as both converge towards a middle-ground following the merger, he said.

This adjustment is countered by the feebate system. For mass market cars, this means that more of them could come with a lower COE price tag, associate professor Wong explained.

"Some cars that were previously smaller and weaker in terms of engine size and power may now come with a higher COE price because they are high OMV cars, and vice versa.

"These changes should benefit middle-income households for which price is the primary concern when buying a car."

khooyihang@asiaone.com

陆路交通管理局 (LTA) 正在就合并 A 类和 B 类拥车证 (COE) 的提案征求公众意见。

陆路交通管理局于周四（10月8日）宣布了这一消息，并启动了在线公众咨询，同时公布了拟议变更的详细信息。

迄今为止，已有超过 200 位公众成员、学者和汽车行业代表分享了他们的观点。

据有关部门称，该提案将 A 类和 B 类乘用车合并为一个单一的乘用车类别，并根据车辆价值实行费用返还制度。

这意味着，购买低价汽车拥车证的车主将获得折扣，而中等价位汽车的拥车证则不会受到任何调整。高价汽车的拥车证则需额外缴纳附加费。

车辆补贴政策的具体细节可能会根据这些车辆的市场中位数价值（OMV）而有所调整。陆路交通管理局补充说，补贴等级将每年进行审查。

另外，陆路交通管理局 (LTA) 也在征求意见，如果 A 类和 B 类合并，E 类应该如何调整。

E类，也称为开放类，目前可用于注册除摩托车以外的任何车辆类型，使买家和经销商在竞标拥车证时拥有更大的灵活性。

该机构在解释审查当前拥车证分类制度的必要性时表示，车辆技术的进步，特别是电动汽车的兴起，使得现有的分类标准效力降低。

制造商还可以调整车辆规格以适应竞争更激烈的 A 类，从而导致更多购车者竞争该类别的拥车证，并缩小 A 类和 B 类之间的价格差距。

最近，A类（130,001美元）和B类（130,100美元）拥车证保费之间的差距缩小到仅99美元。

2026 年 2 月至 6 月期间，A 类价格超过 B 类价格的情况也出现过三次。

陆路交通管理局首席运营官林志坚表示，目前的拥车证制度已经“为我们服务了三十多年”。

然而，随着车辆技术的不断发展和市场环境的变化，陆路交通管理局正在审查当前的分类框架是否仍然“适合”新加坡。

林先生表示：“通过此次咨询，我们邀请公众分享他们对拟议变更和相关权衡的意见，以便拥车证分类框架能够保持相关性，并继续适当地区分大众市场汽车和高价值汽车。”

陆路交通管理局邀请公众于10月8日下午5点至11月2日晚上11点59分期间，通过https://go.gov.sg/coe-pcd-feedback分享意见。

预计审查将于2026年底完成。陆路交通管理局将于2027年上半年公布审查结果和建议。

现行拥车证制度的漏洞

新加坡国立大学经济学副教授黄添福表示，现行制度需要进行改革。

他解释说，目前的 COE 类别“不再反映政策预期的区分类型”。

黄副教授表示，A类车是面向大众市场的汽车，而B类车是面向豪华汽车，这样中产阶级买家就不会被更富有的买家挤出市场。

“然而，随着时间的推移，汽车制造商推出了更多 A 类豪华汽车，导致这两个类别的价格趋于一致。

“有必要对现有体系进行修订，以便更好地服务于大众市场买家。”

新加坡社会科学大学经济学副教授沃尔特·特塞拉也表示，此次合并旨在解决当前体系中的漏洞。

他解释说，目前的拥车证框架允许一些买家“利用这项政策”，并“进入原本应该留给家庭和低收入新加坡人的车辆类别”。

“市场和消费者总能在某种程度上绕过这项政策，”副教授塞西拉说。

他强调“电动汽车的出现”，并解释说，技术进步使制造商能够设计出即使不设计不同的车辆，也能让豪华汽车品牌获得 A 类资格的车辆。

他说：“由于电气化，符合 A 类标准的车型数量几乎在一夜之间呈爆炸式增长。”

通过这一改变，陆路交通管理局可能希望 OMV 限制能够成为区分豪华车和非豪华车的更有效方法。

“所有这些其他限制都随着技术的发展而及时地被规避了，所以我们希望你们无法规避汽车的美元成本，”他解释说。

拥车证价格会受到影响吗？

副教授塞西拉也对拥车证价格可能受到这一变化的影响发表了看法，他表示，价格是否会下降“很难预测”。

“这项政策可以保证的是……购买更昂贵汽车的人将比购买价格较低的汽车的人支付更多的拥车证费用。”

“A类和B类组别无法保证这一点。”

他还补充说，人们支付的拥车证总价格（包括回扣或费用）可能不一定会更低或更高。

“这实际上取决于市场，”他说。

然而，黄副教授表示，这些变化应该会使中等收入家庭受益。

他表示，合并后，A类拥车证的基准价格预计将会上涨，而B类拥车证的基准价格可能会下降，因为两者将向中间价位靠拢。

黄副教授解释说，这种调整可以通过补贴制度来抵消。对于大众市场汽车而言，这意味着更多汽车的拥车证价格可能会降低。

“一些以前发动机排量和功率较小的汽车，现在可能因为是高 OMV 汽车而需要支付更高的拥车证价格，反之亦然。

“这些变化应该会使中等收入家庭受益，因为对他们来说，价格是购车时最主要的考虑因素。”

khooyihang@asiaone.com