Singapore COE Review: Proposed Cat A/B Merger and Feebate Explained

This matters most to Singapore residents and long-term residents considering car ownership, not short-stay visitors. The proposal could change how passenger-car COEs are categorised in future, but today’s bidding categories and rules remain in force unless and until LTA announces a completed review and implementation plan.

The important distinction is between a consultation and a policy change. LTA is testing a preliminary model, asking the public how it should work and explicitly saying COE prices would continue to be determined by market forces.

01 · What LTA is actually proposing

At present, Singapore separates most passenger cars into Categories A and B using engine capacity and power thresholds. For current COEs, Category A covers non-fully-electric cars up to 1,600cc and 97kW, and fully electric cars up to 110kW. More powerful cars fall into Category B.

LTA’s preliminary proposal would remove that A/B split for passenger cars and create a single bidding category. A second mechanism — the “feebate” — would then adjust what a buyer pays according to the value of the car, so a lower-value mass-market model receives a rebate while a higher-value car attracts a surcharge.

The consultation also asks how the Open Category, Category E, should be handled if Categories A and B are merged. That is another reason not to treat the headline proposal as a finished system.

02 · Why the existing A/B line is under review

LTA says engine size and power have become less effective proxies for separating mass-market and higher-value cars as vehicle technology has changed, particularly with electric vehicles. Manufacturers can also adjust specifications so some models fit within Category A thresholds.

The practical result is that more buyers can end up competing in Category A and the price difference between A and B can become very small. LTA says Category A premiums actually exceeded Category B premiums three times between February and June 2026.

The latest completed tender illustrates how narrow the gap can be. In the 7 October 2026 bidding exercise, the official OneMotoring results were S$130,001 for Category A and S$130,100 for Category B — a difference of just S$99.

03 · What “feebate” means — and what it does not mean

A feebate combines a fee and a rebate. Under LTA’s consultation model, the combined passenger-car COE would still be auctioned. The buyer’s final COE-related amount would then be adjusted according to the car’s value, using bands linked to Open Market Value (OMV).

The consultation materials examine three-band and five-band approaches. Reporting on the LTA paper shows the examples are designed so lower-value cars receive a rebate and higher-value cars pay a surcharge, with the largest example spread reaching S$30,000 between the two ends. These are consultation examples, not current charges and not a guaranteed final design.

Most importantly, LTA says the objective is not to set or suppress the overall COE market price. Supply and demand would still determine the auction premium. That means buyers should not read “rebate” as a promise that owning a car will suddenly become cheaper.

04 · Nothing changes for car buyers today

If you are buying a car now, the current Category A, B and E framework still applies. There is no announced transition date, no approved merged category and no approved feebate schedule.

Likewise, the consultation should not be read as an immediate change to taxi, private-hire, rental-car or visitor transport rules. For a traveller using MRT, buses, taxis or Grab during a normal holiday, there is no new action to take because of this consultation.

For residents weighing a car purchase, the sensible approach is to separate what is known now from what might change later: use the live OneMotoring rules and current tender results for present decisions, and follow LTA’s review rather than relying on dealer speculation about a system that has not been finalised.

05 · Who can respond and what LTA wants feedback on

The consultation runs from 8 October 2026 at 5:00pm to 2 November 2026 at 11:59pm. LTA says members of the public, industry stakeholders and other interested parties can respond.

The central questions are whether Categories A and B should be combined, whether a value-based feebate is the right way to preserve a meaningful distinction between mass-market and higher-value cars, how the bands should be designed, and how Category E should change if the merger proceeds.

LTA says it had already engaged more than 200 members of the public, academics and automotive-industry representatives through earlier discussions. The wider consultation is the next stage, not a ratification vote on a fixed plan.

06 · Other COE ideas are not the same as this proposal

The consultation paper also records suggestions raised during the broader review, including support based on family needs, direct bidding by individuals, pay-as-you-bid pricing, a separate category for private-hire cars and surcharges on multiple-car ownership.

Those ideas should not be collapsed into the A/B merger headline. LTA’s 8 October release identifies the single passenger-car category plus value-based feebate as the preliminary proposal on which it is actively seeking views, while the other suggestions are summarised as part of the wider review.

07 · What happens next

LTA says feedback from this consultation will inform the review, which is expected to be completed by the end of 2026. Findings and recommendations are expected to be shared in the first half of 2027.

Until then, there are two useful dates to remember: 2 November 2026 for feedback, and the eventual LTA announcement that follows the completed review. Any actual implementation timing would need to come from that later official decision.

08 · Sources and verification

This article was checked on 9 October 2026 against the Land Transport Authority’s 8 October consultation release, the current OneMotoring COE guide, and the official 7 October bidding results. CNA and The Straits Times were used as secondary cross-checks for how the consultation examples are being explained.