Number of less expensive cars in Category A surged on policy tweaks

To cater to the mass-market car buyers.

According to a release by the Land Transport Authority, car registration data in the first month since the re-categorisation of Category (Cat) A/B cars in February 2014 shows that there has been a significant decrease in the median Open Market Value (OMV) of cars registered in Cat A, and a greater number of cars with lower OMV registered in Cat A.

The objective of the re-categorisation was to ensure that Cat A better achieves its original social equity purpose of serving mass-market car buyers, in view of the rising proportion of higher-end cars appearing in Cat A in recent years.

The LTA noted that there were more cars with lower OMV registered in Cat A using COEs obtained after the re-categorisation, compared to those registered using COEs obtained in the six months prior to re-categorisation.

The percentage of cars with OMV at or below $15,000 has increased from 8% to 25% of all Cat A registrations; those with OMV at or below $20,000 has increased from 26% to 58%; and those with OMV at or below $25,000 has increased from 43% to 74%.

The median OMV of cars registered in February, using Cat A Certificates of Entitlement (COEs) obtained after re-categorisation, decreased by 28% to $18,845, compared with $26,147 for COEs obtained in the previous six months (August 2013 to January 2014).