The Land Transport Authority (LTA) has less than two weeks left in its public consultation on merging Certificate of Entitlement (COE) Categories A and B into a single passenger-car pool, replacing engine-capacity splits with an open-market value (OMV) fee-and-rebate system that would still let market bidding set premiums. Households comparing loan packages for their next car should read the consultation now: comments close on 2 November, and LTA expects to finish its review by year-end with recommendations in the first half of 2027.
Why Cat A stopped behaving like “mass market”
Since 2014, Category A capped engine capacity at 1,600 cc and power at 130 brake horsepower, while Category B covered larger engines. Electric vehicles and turbocharging blurred those lines—manufacturers can tune models to squeeze under Cat A thresholds, pulling buyers who would once have bid in Cat B. LTA said Cat A premiums exceeded Cat B on three occasions between February and June 2026, a reversal that breaks the policy story that Cat A protects cheaper cars.
Feebate mechanics in plain dollars
Under the annex LTA published on 8 October, a merged category would charge surcharges on higher-OMV cars and rebates on lower-OMV models before bidding begins, aiming to keep luxury cars from crowding out mass-market entrants without maintaining two separate quotas. Marcus Goh’s household-money lens: your out-of-pocket is still premium plus registration fees plus excise duty—the consultation changes how many rivals sit in the same auction room, not whether auctions exist.
LTA also asked how Category E open COEs should adjust if A and B combine, and floated ideas raised in focus groups—separate pools for private-hire cars, surcharges on multi-car households, direct individual bidding—without adopting them yet. More than 200 members of the public, academics and industry representatives joined April and May sessions that informed the paper.
Financing and timing for buyers
If you are renewing a COE expiring in early 2027, today’s premiums remain governed by the current categories; merger implementation would require legislative and systems changes after the consultation. Banks’ hire-purchase quotes should still stress total debt servicing ratio limits from the Monetary Authority of Singapore; a merged pool could widen premium volatility if luxury and mass-market buyers bid against each other every fortnight.
What to submit
Feedback channels are listed on LTA’s consultation portal—use them if your family relies on Cat A rebates for a first car, or if you operate fleets that arbitraged category splits. LTA’s promise is market-set prices with fairer segmentation; the household test is whether your next loan estimate still fits after hypothetical feebates are applied to the models you actually price on dealer lots.