SINGAPORE – It was business as usual for car showrooms on Oct 10, the first weekend since the Land Transport Authority (LTA) proposed a major overhaul of the certificate of entitlement (COE) system.
Rather than rush to buy or hold off amid uncertainty over the proposed changes to the 36-year-old framework, some car buyers told The Straits Times that their immediate concern was another deadline – the upcoming rollback of incentives for electric vehicle (EV) adoption from January 2027.
One of them was Bryan Koh, 39, who works in finance and is looking to buy his first car.
Having one would make it easier to ferry his elderly parents to and from medical appointments, and make family outings on weekends with his two-year-old son more convenient, he said.
While still undecided on a specific make and model, he said it would be remiss of him not to consider buying an EV now, when buyers can receive a combined rebate of up to $30,000 under the EV Early Adoption Incentive (EEAI) and Vehicular Emissions Scheme (VES).
The EEAI is valid until Dec 31, 2026, while the VES will be scaled down from Jan 1, 2027, meaning those purchasing EVs in 2027 will see their maximum rebate drop to $20,000.
The drive to secure these incentives comes as the LTA consults the public on proposed changes to the COE system. In a consultation paper published on Oct 8, it mooted the idea of merging categories A and B into a single category, and then applying a rebate or surcharge to the prevailing COE price based on the car’s value.
To determine the amounts, cars would be placed into different bands based on their median open market value, which is the price of a car before taxes.
LTA had suggested two options. One is a three-band system, in which cars in the lowest band get a rebate of $15,000, while those in the highest band incur a $15,000 surcharge.
Those in the middle band will pay the full COE price with no rebates or surcharges applied.
A second option is to have five bands, including two bands with smaller rebates or surcharges of $7,500, depending on the band a car is placed in.
The move aims to address the converging premiums of Category A and B COEs. At the most recent bidding exercise on Oct 7, the premiums stood at $130,001 and $130,100 respectively.
At these levels, the prices are far too high, especially for those who require a car for family needs, said retiree Steven Gao, 65, who was eyeing an electric BMW iX2 at Performance Motors’ BMW showroom in Alexandra Road.
The former general manager of a shipping company described six-figure COE prices as “crazy” and felt the proposed changes may complicate things further.
Motor dealers said the impending reduction in EV incentives has been prompting buyers to make decisions sooner, even as the proposed COE changes add uncertainty.
Raymond Yeo, the sales and product manager for Changan Singapore, said footfall at the Chinese carmaker’s showroom in Alexandra Road has been steady. He noted that policy announcements regarding cars often cause a “knee-jerk reaction” among some buyers.
Pointing to the Changan Nevo Q05, which was recently introduced, he said the compact electric sport utility vehicle will likely be placed in a lower band whenever the proposed COE refresh takes place.
“Assuming it gets the $15,000 rebate, customers will only end up shaving off $5,000 at the end of the day. You need to factor in the fact that the EV rebates are less.”
At a dealership that sells high-end cars, a saleswoman who declined to be named said she noticed that some buyers considering Category B cars were adopting a wait-and-see approach, having already factored in higher prices.
Those looking at Category A models, meanwhile, are seemingly more proactive, said the saleswoman who was not authorised to speak to the media.
A hybrid model that qualifies for a Category A COE currently costs about $275,000, she said.
An additional $7,500 surcharge imposed through the VES on non-electric models, on top of the proposed surcharge through the revised COE system, would push the car’s price to almost $300,000 in 2027.
“If it hits that price, then customers will just step away. The (hybrid) model was launched to chase the Category A market, but the proposed COE changes are not beneficial to luxury brands,” she said.