Why Cat A and B could merge under proposed changes to COE system
In recent years, the prices of Cat A and Cat B COEs have grown close, blurring the line between mass-market and luxury cars.
The Certificate of Entitlement (COE) system in Singapore, established in 1990, regulates the vehicle population through a quota system. COEs expire after either five or ten years and are valid for the purchase of a car. COE prices are auctioned twice a month, with the price determined by supply and demand. Passenger cars are categorized into A and B groups based on engine capacity and power output.
Category A cars have a cap of 1,600cc and 130bhp, while Category B allows larger or more powerful vehicles. The LTA (Land Transport Authority) is considering merging these two categories into a single pool for all passenger cars. If this proposal is implemented, it could result in a broader pool of COEs, potentially reducing price volatility.
However, it would also introduce the challenge of mass-market cars competing directly with luxury vehicles. To address this, the LTA is proposing a tiered system with rebates or surcharges based on the median open market value of the car. This means that mass-market cars with lower values would receive a discount, while luxury vehicles would incur a surcharge. The specific OMV bands and resulting costs under this modified COE system are yet to be determined.
Written by urgent.news from Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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