Certificate of Entitlement (COE) costs are expected to remain high in 2026 primarily due to strong and persistent demand for cars driven by electric vehicle (EV) adoption and private-hire car (PHC) fleets, which is outpacing a moderate increase in supply.
Key factors contributing to the high COE premiums for 2026 start with rising demand for new cars despite high selling prices. In Singapore right now the demand for cars remains robust. This is partly attributed to a growing number of wealthy households in Singapore with the financial means to purchase cars in the current price climate (percentage of households with monthly incomes exceeding S$20,000 has grown significantly by nearly 20 percent in 2024).
Interestingly, the market for new electric vehicles is expanding, with many new, often more affordable, Chinese brands like BYD, Aion, Zeekr and Xpeng entering the market and intensifying competition among dealers. This increased competition drives up demand for the limited pool of COEs.
Then there is the ‘Private-Hire Car’ companies who continue to replace their aged vehicles, contributing significantly to the sustained demand for COEs. This transforms car ownership from a personal cost to a potential income-generating asset for drivers, further boosting the demand pool.
There is also talk in the industry of changes to the Vehicular Emissions Scheme (VES) and EV Early Adoption Incentive (EEAI) which are taking effect from January 2026, which will reduce rebates for EVs (will be cut from SG40,000 to SG30,000. This has triggered a “panic buying” rush at the start of the year as buyers attempt to lock in higher subsidies) and remove them for some hybrids. This is creating a “pull forward” effect, with buyers rushing to purchase cars in late 2025 to lock in existing incentives, which in turn keeps current demand and prices high.
While the COE supply is expected to increase by approximately 20 percent for passenger cars in 2026 as more older vehicles are deregistered, the increase may not be enough to satisfy the high demand fully, preventing a significant price drop.
The Land Transport Authority might progressively increase up to 20,000 additional COEs across all categories through 2026.
The SG$100,000 COE benchmark for Category A (smaller cars) has become a reference point, with industry observers noting that buyers are becoming used to these high figures, which can sustain elevated price expectations in the market.
Ultimately, industry experts suggest that for premiums to fall significantly, the strong demand from both EV buyers and PHC fleets would need to ease considerably, which seems unlikely in the near term.
Recent Category Prices (December 2025)
As of the final bidding exercises of 2025, prices remain high as the market transitions into the new year:
- Category A (Mainstream cars): $109,501
- Category B (Larger/More powerful cars): $115,102
- Category E (Open): $119,000
