Singapore proposes COE system changes to differentiate car categories

The Land Transport Authority (LTA) has proposed changes to Singapore’s Certificate of Entitlement (COE) system to address the narrowing price gap between Category A and Category B vehicles. Currently, Category A (mass-market) and Category B (premium) premiums have converged, with both reaching approximately S$130,000 in recent tenders. This convergence is attributed to manufacturers tuning high-end electric models to meet Category A requirements.

The proposed reforms include merging the two categories and introducing an adjustment based on a vehicle’s Open Market Value (OMV). Under this plan, higher-value cars would incur a COE surcharge, while mass-market vehicles would receive a rebate. Middle-tier vehicles would see no adjustment. While industry observers suggest these changes will better differentiate vehicle types, they also warn that premiums may rise and could increase the take-up of private-hire vehicles.

LTA clarified that the review does not target COE prices directly; instead, prices will continue to be determined by market demand and available supply.