The Land Transport Authority (LTA) has proposed combining Certificate of Entitlement (COE) Categories A and B, with buyers receiving rebates or paying surcharges of up to S$15,000 depending on their car’s value.
Released for public consultation on 8 October 2026, the proposal would put buyers in one passenger-car bidding category, then adjust the COE amount they pay.
How The Rebates And Surcharges Would Work
LTA calls the proposed arrangement a “feebate”, combining fees and rebates.
It is seeking views on two options. The simpler, three-band version would give the lowest-value band a S$15,000 rebate, leave the middle band unchanged and add S$15,000 for the highest-value band.
The five-band alternative would work like this:
| Car-Value Band | Proposed COE Adjustment |
|---|---|
| 1, lowest | S$15,000 rebate |
| 2 | S$7,500 rebate |
| 3 | No adjustment |
| 4 | S$7,500 surcharge |
| 5, highest | S$15,000 surcharge |
Both options would produce a S$30,000 difference between the COE amounts paid by buyers receiving the maximum rebate and those paying the maximum surcharge in the same exercise.
The choice of structure matters. In LTA’s illustrations using 2025 registrations, the Toyota Sienta would receive a S$15,000 rebate under three bands, but S$7,500 under five. These examples are indicative.
LTA says five bands would make the jumps between similar-value cars smaller, although administering the system would be more complicated.
A Car Model’s Import Value Would Determine Its Band
LTA proposes using each model’s median Open Market Value (OMV), calculated from past registrations.
OMV is the vehicle’s assessed import value, including its purchase cost, freight, insurance and other relevant delivery charges. The median is the middle value when the figures are arranged in order.
LTA would review and publish each model’s band annually, allowing buyers to check its rebate or surcharge before choosing a car.
Why LTA Wants To Change The Categories
The existing split uses engine capacity and power to distinguish between cars, with electric vehicles classified by power output.
LTA says advances in vehicle technology have weakened that distinction. Manufacturers can adjust specifications so that higher-value models qualify for Category A, increasing competition there.
The price gap has consequently narrowed. Category A premiums overtook Category B three times between February and June 2026.
At the 7 October bidding exercise, Category A closed at S$130,001 and Category B at S$130,100, a difference of just S$99.
LTA says overall COE prices would still depend on demand and supply. The proposal aims to make buyers of higher-value cars pay more for their COEs than buyers of lower-value cars.
Renewals And Category E Are Also Under Review
LTA is seeking views on whether rebates and surcharges should extend to COE renewals. It could consider transitional arrangements for existing owners if the merger proceeds.
For Category E, the Open Category, the options include removing it or keeping it exclusively for cars. LTA says retaining it for cars would preserve an option for urgent buyers while protecting the COE supply for commercial vehicles.
The public can submit feedback at go.gov.sg/coe-pcd-feedback until 11:59pm on 2 November 2026.
LTA plans to complete its review by the end of 2026 and release its findings and recommendations in the first half of 2027.
