History Of The COE, And How It Has Evolved Since 1990

The Certificate Of Entitlement, commonly known as COE, was introduced on 1 May 1990 to help manage the fast-growing car population in Singapore. Prior to the introduction of the COE system, the growth rate of the car population was as high as 12% per annum.

Over the years, the COE system has evolved to serve the needs of Singapore better. In this article, we explore some of the major changes made to the COE system over the past three decades.

1991: COE Can No Longer Be Transferred

When the COE system was first launched, for a short while, COEs could be transferred from one person/company to another. This led to speculators, who could bid for COEs with the aim of selling/transferring them at a higher price to another individual or company that needed them.

To stop people from making money through COE trading, since October 1991, COEs have mainly been non-transferable. Today, one can only transfer unused COEs in Categories C and E once if they were obtained through a bid made as an individual. COEs obtained under a company, business or organisation cannot be transferred. This restriction concerns the unused COE, rather than the subsequent sale of a vehicle with its COE.

1999: From 7 Categories To 5

When COE was first introduced, there were a total of 7 categories. The categories were as follows.

There was also Cat 8 for weekend cars, introduced in 1991. This separate category was removed when the Off-Peak Car scheme replaced the Weekend Car scheme in October 1994.

From May 1999 onwards, the categories were reclassified into the five categories that we are familiar with today:

• Cat A & Cat B are for cars.
• Cat C is for goods vehicles and buses.
• Cat D is for motorcycles.
• Cat E is the open category, which currently covers all vehicles except motorcycles.

2002: From Closed Bidding System To Open Bidding System

Previously, the COE bidding system was a closed bidding system. This meant bidders would not know how much others had bid. However, as one would imagine, the closed bidding system provides a less efficient outcome as bidders do not know what others have bid, or how many bidders there were.

From April 2002 onwards, the COE open bidding system fully replaced the closed bidding system. This is still the system we have today, with live bidding information shared by LTA on its website.

2010: The Revised Off-Peak Car (ROPC) Scheme

From 1 May 1991 to 30 September 1994, the Weekend Car (WEC) scheme was in place. Under the WEC scheme, new car buyers who opted for the scheme were given a rebate on the net Additional Registration Fee (ARF), import duty and COE, up to a maximum of $15,000. In addition, the road tax payable was 30% of the annual road tax of a normal car of the same capacity.

According to information shared by NLB, the loophole with the WEC was that certain car owners, especially those with larger-capacity cars, managed to enjoy substantial road tax savings and lower COE prices, then purchase a $20-per-day special licence to use their cars during restricted hours.

This was because the WEC did not cap the road tax savings that a driver could enjoy, only requiring new weekend car owners to pay 30% of the regular road tax.

Thus, the WEC scheme was changed to the Off-Peak Car (OPC) scheme. From 1 October 1994, the OPC scheme allowed car owners to receive an upfront rebate of $17,000 when purchasing their car, in addition to an $800 flat discount on annual road tax, subject to a minimum road tax payment of $50.

In return, OPC cars could be driven without a supplementary licence from 7pm to 7am on weekdays, after 3pm on Saturdays, and all day on Sundays and public holidays.

From 25 January 2010, the Revised Off-Peak Car (ROPC) scheme allowed more unrestricted time on the road, including all day on Saturdays and the eves of five major public holidays.

The upfront rebate of up to $17,000 remained available for new ROPCs. Regular car owners who converted to the ROPC scheme could instead receive cash rebates of up to $1,100 every six months until their cars reached 10 years of age. ROPCs also enjoyed an annual road tax discount of up to $500, subject to a minimum road tax payment of $70.

Read Also: How Much Can You Save When You Buy An Off-Peak Car (OPC)?

2012: Taxis No Longer Part Of The COE Bidding Process

Prior to August 2012, taxi operators could bid for a COE or pay the Category A prevailing quota premium (PQP) to register a taxi.

Since 6 August 2012, taxi operators no longer bid for COEs to register their taxis. Instead, they draw from the Category E quota and pay the Category A PQP.

Read Also: COE Prices Continue Increasing. But Should Anyone Really Be Surprised?

2014: Engine Power Becomes Part Of Car Categorisation

From the first COE bidding exercise in February 2014, cars had to meet both an engine capacity limit of 1,600cc and a maximum power output limit of 97kW to qualify for Category A.

Cars exceeding either limit fell under Category B. This added engine power as a criterion alongside engine capacity.

2018: Zero Vehicle Growth For Cars And Motorcycles

From February 2018, the annual vehicle growth rate for Categories A, B and D was reduced from 0.25% to zero. Category C, for goods vehicles and buses, retained an annual growth allowance of 0.25%.

A zero growth rate does not mean no COEs are issued. Replacement COEs continue to be released as vehicles are deregistered.

2022: Higher Category A Power Limit For Fully Electric Cars

From the first COE bidding exercise in May 2022, the Category A maximum power output limit for fully electric cars increased from 97kW to 110kW. This allowed more mass-market electric cars to qualify for Category A.

The limits for non-fully electric cars remained unchanged: engine capacity of up to 1,600cc and maximum power output of up to 97kW. Fully electric cars exceeding 110kW fall under Category B.

2023: Changes To COE Supply Calculations And Motorcycle COEs

From February 2023, LTA began calculating the replacement COE component using deregistrations over the preceding four quarters, rather than two quarters. This was intended to reduce quarter-on-quarter volatility in COE supply.

From the first bidding exercise in May 2023, the deposit for motorcycle COE bids increased from $800 to $1,500. The validity of unused motorcycle COEs was also shortened from three months to one month, allowing expired COEs to be returned for bidding sooner.

2025: Additional COEs Begin Entering The Market

From February 2025, LTA began progressively injecting up to about 20,000 additional COEs across vehicle categories over several years.

LTA attributed this to changes in vehicle usage trends and the improved capabilities of ERP 2.0. These additional COEs are separate from the regular replacement supply arising from vehicle deregistrations.

2026: Proposed Merger Of Categories A And B

On 8 October 2026, LTA launched a public consultation on merging Categories A and B into a single passenger car category, alongside a fee-and-rebate, or “feebate”, system based on a car’s value.

Under the proposal, lower-value cars would receive rebates while higher-value cars would attract surcharges. LTA is also seeking views on how Category E should be adjusted if the merger proceeds.

As at 17 October 2026, these remain proposed changes. Public feedback closes on 2 November 2026. LTA expects to complete its review by the end of 2026 and share its findings and recommendations in the first half of 2027.

Read Also: Why The Proposed Combination Of COE Categories Is Overdue But Unlikely To Solve Current COE Problems

Top photo by Moo Kar Ming, DollarsAndSense