Engine power criterion to be added in COE Category A cars

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According to a release, a new set of categorisation criteria to better delineate mass market from premium cars will be introduced. 

The new categorisation will retain the existing Cat A criterion that the engine capacity of the car should not exceed 1,600cc for Cat A, and add a new criterion that the engine power of the car should not exceed 97kW (equivalent to about 130 bhp).

Had this additional engine power criterion been applied to the 2012 vehicle registrations, almost 50% of cars in Cat A would have moved into Cat B.

LTA acknowledges that many who were consulted favoured cars to be categorised based on their Open Market Value (OMV).

However, it is not practical to use the OMV of a car model for categorisation as OMV can fluctuate quite significantly for different batches of the same car, due to variations in exchange rates and car model specifications.

This means that the same car model can end up in Cat A and Cat B at different times.

Engine capacity had been a good proxy for the value of a car until recent years. The new twin criteria of engine capacity and engine power will be an improvement as a proxy for the value of a car, compared to the single criterion, while giving buyers certainty over the COE category of the car model they are intending to purchase.

With the new criteria, more than 90% of the car models in Cat A will have an OMV of less than $20,000, which was the OMV threshold for Cat A/B most respondents preferred.