LTA proposes merging COE categories A and B into one passenger car category
The Land Transport Authority (LTA) has proposed merging Certificate of Entitlement (COE) categories A and B into a single passenger car category, as well as introducing surcharges and rebates depending on the car’s open market value (OMV).
Under LTA’s proposed fee-and-rebate system, the maximum price difference between a higher-end car with a higher OMV and a mass-market car with a lower OMV would be S$30,000.
The proposed system would work by having all passenger cars bid from the same, newly merged COE pool, resulting in one prevailing COE price for passenger cars. There will then be a rebate or surcharge applied to the prevailing COE premium based on the OMV of each car.
Cars with lower OMVs will receive rebates while higher-value cars will have surcharges applied. The OMV of a certain car model as outlined by LTA involves arranging all OMVs from past registrations of the same car model within a set time period, then determining the median value. This figure will then be the OMV value tagged to that car model.
LTA’s proposal includes two options on how these “feebates” will be applied. Using that median OMV, cars will be separated into three or five bands based on the percentile into which that value falls. The proposal lists possible rebate and surcharge rates of up to S$15,000 for the lowest and highest percentile.
Banding results for each car model would be reviewed and published annually to keep buyers informed. Car retailers would also be able to appeal a band assignment for their vehicles.
| LTA's example of a three-band structure for the "feebate" system | |||
| Band | Quantum | OMV percentile based on 2025 registrations | Typical models (non-exhaustive) |
| 1 | $15,000 rebate | 0 - 35th | BYD Atto 3, Honda Freed, Honda Jazz, Hyundai Kona 1.6 HEV, Mazda 3, MG S5, Nissan Note, Suzuki Swift, Toyota Noah, Toyota Sienta, Volvo EX30 110kW |
| 2 | $0 (no adjustment) | 35 - 50th | Audi A3, BYD Sealion 7 Dynamic, Honda Civic 1.5 Turbo, Nissan Serena, Toyota Corolla Altis, Xpeng G6 RWD (Standard Range) |
| 3 | $15,000 surcharge | > 50th | Audi Q3, BMW 216, BMW iX2, BYD Sealion 7 Performance, Denza D9, Honda Civic Type R, Honda Odyssey, Mercedes-Benz A180, Mercedes-Benz GLC, Tesla Model 3 RWD 110, Tesla Model Y RWD, Toyota Alphard |
| LTA's example of a five-band structure for the "feebate" system | |||
| Band | Quantum | OMV percentile based on 2025 registrations | Typical models (non-exhaustive) |
| 1 | $15,000 rebate | 0 - 10th | Honda Jazz, Mazda 3, MG S5, Nissan Note, Suzuki Swift |
| 2 | $7,500 rebate | 10 - 35th | BYD Atto 3, Honda Freed, Hyundai Kona 1.6 HEV, Toyota Noah, Toyota Sienta, Volvo EX30 110kW |
| 3 | $0 (no adjustment) | 35 - 50th | Audi A3, BYD Sealion 7 Dynamic, Honda Civic 1.5 Turbo, Nissan Serena, Toyota Corolla Altis, Xpeng G6 RWD (Standard Range) |
| 4 | $7,500 surcharge | 50 - 75th | Audi Q3, BMW 216, BYD Sealion 7 Performance, Honda Odyssey, Mercedes-Benz A180, Tesla Model 3 RWD 110 |
| 5 | $15,000 surcharge | > 75th | BMW iX2, Denza D9, Honda Civic Type R, Mercedes-Benz GLC, Tesla Model Y RWD, Toyota Alphard |
LTA is also seeking feedback on how category E COEs should be adjusted if categories A and B were to merge.
The consultation paper also mentioned that LTA explored and addressed other COE suggestions that were raised in focus groups. These include giving families with young children more support with car ownership, introducing a surcharge for those who own more than one car, implementing a separate COE category for private-hire vehicles, and banning car dealers from bidding for COEs on behalf of buyers.
The window for public consultation and feedback for the proposal opened at 5pm on 8 October and will end at 11.59pm on 2 November. LTA will then share its findings and recommendations by the first half of 2027.
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