COE category review 2026: what car owners should know

Singapore is reviewing how cars are divided between COE Categories A and B. The practical question for owners is how any new rules would affect the cost of their next car and demand for their current one.

In its 6 May 2026 update, MOT said the review was ongoing and expected to conclude by the end of 2026. That is a review target, not an implementation date. This article uses the published category rules; the possible outcomes below are scenarios. MOT’s review update.

Why the categories are being reviewed

Cat A is intended to separate smaller, less powerful cars from the rest of the market. But manufacturers can offer variants whose specifications fit just within a power limit, even when the underlying models span different price segments.

MOT raised this issue in March and said it would gather views on improvements, including a proposal for OMV-based discounts or surcharges. An OMV price boundary has not been established by that announcement. March 2026 Committee of Supply speech.

The published rules

Car type	Cat A	Cat B
Non-fully-electric cars, including hybrids	Engine capacity no more than 1,600 cc and maximum power no more than 97 kW	Exceeds either Cat A limit
Fully electric cars	Maximum power no more than 110 kW	Maximum power above 110 kW

These are inclusive limits: a fully electric car rated at exactly 110 kW can qualify for Cat A. Check the approved specifications of the exact variant. LTA’s COE guidance.

A lower power output does not necessarily mean a smaller car or a lower OMV. That is why an engine-and-power split can produce a different grouping from a price-based one.

Three possible approaches and their trade-offs

These are ways to think about a review, not a ranked prediction or an official shortlist.

Approach	What it could change	What would determine its effect
OMV-related categorisation or price adjustments	Changes the treatment of cars at different pre-tax values	Thresholds or adjustments, quota allocation and treatment of existing vehicles
Revised power limits or additional vehicle criteria	Moves some future registrations between categories	Which variants qualify and how manufacturers respond
A combined car bidding pool	Removes the A/B distinction for new bidding	Total quota and the mix of buyers competing

No approach automatically creates more COEs. Redistributing demand between categories can change premiums, but the outcome also depends on where supply is allocated.

OMV has trade-offs too: exchange rates, import costs and variant differences can move a model’s assessed value. It is not an unchangeable measure of a car’s retail price.

How existing owners could be affected

A buyer of your used car normally takes over its remaining COE tenure. They do not bid for a fresh COE merely because ownership changes. LTA’s ownership-transfer rules.

Any new category scheme would need published rules covering commencement and transition. Do not assume it will reclassify existing cars, change renewal terms or guarantee a transition period.

The more immediate connection is replacement cost. If a comparable new car becomes cheaper, buyers may expect a lower used price. If it becomes more expensive, your car may look more attractive. These are possible market responses, not fixed dollar adjustments.

The PARF change is separate

The confirmed PARF revision applies by COE cohort, beginning with the second February 2026 bidding exercise. It does not retrospectively reduce the rebate on a 2017 car.

For example, an eligible 2017 car with $18,000 net ARF, deregistered at above nine but not more than ten years old, retains a $9,000 PARF rebate under its earlier schedule. It does not drop to $900 under the 2026 revision.

The original version of this article incorrectly applied the new schedule to an older car. That example has been corrected. See LTA’s PARF announcement and the full PARF breakdown.

How to make a decision during the review

• Buying now: compare written quotations under the current rules. Check what the contract says if registration costs change.
• Selling now: use current comparables and actual offers. A possible policy change alone does not establish your car’s price.
• Approaching COE expiry: check your actual PQP, PARF and repair budget. Your expiry date matters more than an unannounced policy start date.
• Able to wait: watch for the final announcement and its transition terms, then recalculate.

Frequently Asked Questions

When do new categories take effect?

The cited MOT update targets completing the review by end-2026. It does not set a commencement date. Check official announcements before relying on any proposed change.

Will Cat A COE become cheaper?

That depends on both demand and quota under the final rules. Moving vehicles between categories does not guarantee lower premiums.

Will my used-car buyer need a Cat B COE?

An ordinary ownership transfer does not require a fresh COE bid. Any future effects on existing cars or renewal must come from the published transition rules.

Should I renew before the review finishes?

Compare the actual cost of renewal with selling or replacing your car. Our renew-or-sell guide shows the calculation.