Singapore is reconsidering how it splits the right to own a car. On 8 October 2026 the Land Transport Authority (LTA) launched a public consultation on merging Certificate of Entitlement (COE) Categories A and B into a single passenger car category. A value-based "feebate" would then give cheaper cars a rebate and charge pricier cars a surcharge.

Why a COE matters

Singapore caps its vehicle population. Anyone who wants to register a new car must first win a COE at an LTA auction. According to the LTA consultation paper, "The final COE clearing price is set at the highest unsuccessful bid plus $1".

At the first October 2026 bidding exercise, which closed on 7 October, premiums were:

Category What it covers Quota Premium (S$)
A Smaller, lower-powered cars 1,232 130,001
B Larger or higher-powered cars 945 130,100
C Goods vehicles and buses 310 91,889
D Motorcycles 530 11,012
E Open (any vehicle except motorcycles) 253 137,000

The S$99 gap between Categories A and B is the problem LTA wants to fix.

Why the current split no longer works

Since May 2022, Category A has covered non-electric cars of up to 1,600cc and 97kW (130bhp), and fully electric cars of up to 110kW (147bhp), according to LTA's OneMotoring portal. Everything above those limits goes into Category B.

The consultation paper says manufacturers are "increasingly able to adjust their vehicle specifications to fit within Category A engine power thresholds". Category A prices exceeded Category B on three occasions between February and June 2026. Citing LTA's media briefing, The Online Citizen reported that the gap between the two categories had historically been about S$20,000 to S$30,000.

Walter Theseira, an associate professor of economics at the Singapore University of Social Sciences, told AsiaOne on 8 October: "The number of vehicle models which could fit into Cat A basically exploded overnight due to electrification."

LTA chief operating officer Lim Zhijian said in the 8 October release that "Singapore's COE system has served us well for more than three decades" but that "it is timely to review whether the current categorisation of cars remains fit-for-purpose".

How the feebate would work

All car buyers would bid in one pool and pay one COE price. LTA would then place each car model in a band based on its median Open Market Value (OMV), worked out from past registrations, the consultation paper says. Bands would be reviewed and published every year, and retailers could appeal.

LTA has put forward two options. The example models below are from LTA's tables, which use 2025 registration data.

Option A: three bands

OMV percentile Adjustment LTA example models
0–35th S$15,000 rebate Toyota Sienta, Honda Freed, Suzuki Swift
35th–50th None Audi A3, Honda Civic 1.5 Turbo, Toyota Corolla Altis
Above 50th S$15,000 surcharge Tesla Model Y RWD, Mercedes-Benz GLC, Toyota Alphard

Option B: five bands

OMV percentile Adjustment LTA example models
0–10th S$15,000 rebate Suzuki Swift, Honda Jazz, Mazda 3
10th–35th S$7,500 rebate Toyota Sienta, Honda Freed, Volvo EX30
35th–50th None Audi A3, Honda Civic 1.5 Turbo, Toyota Corolla Altis
50th–75th S$7,500 surcharge Audi Q3, Honda Odyssey, Tesla Model 3 RWD
Above 75th S$15,000 surcharge Tesla Model Y RWD, Mercedes-Benz GLC, Toyota Alphard

Under either option, the most and least valuable cars would be up to S$30,000 apart. The paper names historical price gaps between Categories A and B as one possible reference point for setting the amounts, without giving a figure. It says three bands "would be simpler to administer" but mean larger adjustments between adjacent bands, while five bands allow smaller adjustments at the cost of more administrative complexity. LTA is also asking whether the feebate should apply to COE renewals. The paper suggests it may not be needed, because "Category A and B prices have converged in recent years".

  • Prices are not the target. "The objective is not to influence overall COE prices," the paper states. Premiums would still be set by supply and demand.
  • Category E may change. In recent years Category E has been mostly used for Category B cars, the paper says. Some participants suggested removing it, but LTA says that would hurt urgent buyers. It puts forward keeping Category E for car registrations only and is asking for views.

Who could gain, and who might pay more

Timothy Wong, an associate professor of economics at the National University of Singapore, told AsiaOne: "There is a need to revise the system to better serve mass market buyers." AsiaOne reported that he expects the baseline price for Category A cars to rise and for Category B cars to fall as the two converge, with the feebate offsetting this.

Theseira told the same outlet that a value-based limit is harder to evade than technical limits because "you can't evade the dollar cost of the car", but that whether overall COE prices fall is "hard to predict".

Not everyone is convinced. In a column published before the consultation, guest columnist Say Kwee Neng argued on Motorist.sg on 4 September that "the COE prices for the combined one COE category can only rise." The Straits Times, republished by Tabla, reported that some motor dealers had hoped the review would keep luxury models out of Category A instead.

Ideas LTA has set aside

LTA also responded to ideas raised when it engaged more than 200 people, including through focus groups, in April and May 2026:

  • Pay-as-you-bid auctions: not recommended. "Changing how we bid does not change how many people want to buy cars, at each point in time," the paper says.
  • Surcharges on households with several cars: not adopted. LTA writes that "multiple-car owners are not a key driver of demand in today's COE market". About 66,000 households (13%) had more than one car in 2025, down from about 87,000 (19%) in 2012.
  • COEs allocated by family need: not suitable for now. Instead, LTA is working on a transport grant for families with three or more Singapore Citizen children, to help with taxi or public transport costs, Mothership reported. Details are still to come.

Key numbers

  • S$130,001 / S$130,100: Category A and B premiums in the first October 2026 exercise, closed 7 October (LTA OneMotoring)
  • 3: times Category A cost more than Category B between February and June 2026 (REACH)
  • S$15,000: maximum proposed rebate or surcharge, for a top-to-bottom spread of up to S$30,000 (LTA paper)
  • About 660,000: passenger cars across 1.5 million households (LTA paper)
  • About 52,000: new cars registered in 2025. The Straits Times (via Tabla) gives 52,381; The Online Citizen gives 52,678. The LTA paper does not give a total.
  • 2 November 2026: consultation closes at 11.59pm

What happens next

The public can respond at go.gov.sg/coe-pcd-feedback until 11.59pm on 2 November 2026. LTA expects to finish the review by the end of 2026 and to publish findings and recommendations in the first half of 2027. No implementation date has been set.

What to watch:

  • Bidding results later in October, and whether Category A again closes above Category B.
  • The November 2026 to January 2027 COE quota, which LTA has yet to announce.
  • The final design: whether LTA picks three or five bands and what it decides on Category E.
  • Details of the large-family transport grant.

For another regional take on the cost of motoring, see our explainer on Malaysia's RON95 and diesel subsidy reform.

This article was researched with AI assistance and reviewed by the NDNews editorial team. It is based on official data and media reports as of 10 October 2026.