LTA proposes COE categories A and B merger under value-based system

It is also seeking views on how Category E should be adjusted if the merger proceeds.

The Land Transport Authority (LTA) has proposed merging Certificate of Entitlement (COE) Categories A and B into one passenger car category, with a value-based fee-and-rebate system.

The authority is also seeking views on how Category E should be adjusted if the proposed merger proceeds.

The proposal aims to distinguish between mass-market and higher-value cars whilst allowing COE prices to continue to be determined by market forces.

LTA said that the review comes as advances in vehicle technology, particularly electric vehicles, have made engine capacity and power less effective in distinguishing between the two car segments.

It further noted that manufacturers are increasingly able to adjust vehicle specifications to meet existing Category A thresholds, resulting in more buyers competing for Category A COEs.

“Between February 2026 and June 2026, Category A COE prices have exceeded Category B prices on three occasions,” LTA added.

Engine capacity and power have been used to distinguish between mass-market and higher-value cars since 2014.

The proposal follows consultations with more than 200 members of the public, academics and automotive industry representatives, including focus group discussions held in April and May.

Other suggestions received include creating a separate COE category for private hire cars, introducing surcharges on multiple-car ownership, and allowing individuals to bid directly for certificates.

The public consultation runs from 8 October to 2 November.

LTA expects to complete its review by the end of the year and release its findings and recommendations in the first half of 2027.

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