Mid-Year COE Review: H1 2026 in Numbers
With the first quarter complete and April's first bidding exercise behind us, Q1 2026 has been the most policy-driven quarter in recent COE history. Two Budget 2026 shocks — the PARF rebate overhaul and the EEAI cut — combined with a strong deregistration cycle to produce a quarter of surging premiums, category convergence, and an entirely new market structure. This data-driven review compiles the key metrics.
Year-to-Date Premium Summary
| Category | Jan R1 2026 | Apr R1 2026 | YTD Change ($) | YTD Change (%) |
|---|---|---|---|---|
| Cat A | $102,009 | $118,000 | +$15,991 | +15.7% |
| Cat B | $119,100 | $121,000 | +$1,900 | +1.6% |
| Cat C | $70,000 | $80,001 | +$10,001 | +14.3% |
| Cat D | $10,200 | $10,000 | -$200 | -2.0% |
| Cat E | $125,001 | $121,001 | -$4,000 | -3.2% |
The headline story is the dramatic Cat A surge — up nearly $16,000 or 15.7% in just three months. Cat A has gone from trading $17,000 below Cat B in January to just $3,000 below in April. Meanwhile, Cat E has actually declined, converging with Cat B as the A/B gap collapse reduces the arbitrage value of the Open category.
What Drove the Q1 Surge
Three factors combined to produce the sharpest Q1 premium increase in years:
- PARF rebate overhaul (effective Feb R2): Budget 2026 slashed PARF percentages by 45 percentage points (from 75/70/65/60/55/50% to 30/25/20/15/10/5%) and halved the cap from $60,000 to $30,000. This reduced the financial incentive to deregister, creating expectations of tighter future supply. Full analysis: PARF Before vs After.
- EEAI panic buying: The cut from $40,000 to $30,000 in EV rebates, effective January 2026, triggered a rush of EV purchases in Q1 as buyers who had been deliberating accelerated their timelines. This added significant demand to both Cat A and Cat B. See our Budget 2026 impact analysis.
- Three-week bidding gap + Good Friday: The April R1 exercise came after an unusual three-week gap (no exercise over Easter/Good Friday), during which dealer showroom visits surged. Pent-up demand from the gap contributed to Cat A being 101% oversubscribed.
Supply: Stronger Than Expected
Q1 2026 COE supply was approximately 18,824 certificates across all categories — roughly 20% above the Q1 2025 average. The increase was driven by a healthy deregistration cycle as 2016-cohort vehicles reached their 10-year expiry. However, the PARF cut may slow deregistrations in coming quarters as owners face reduced incentives to scrap, creating a supply headwind for Q3-Q4 quotas. Track the latest supply data on our deregistrations page.
The A/B Convergence Story
The most structurally significant development in Q1 2026 is the near-total convergence of Cat A and Cat B premiums. In January, the gap was approximately $17,000. By April, it had collapsed to just $3,000 ($118,000 vs $121,000). This convergence was a key factor in Acting Minister for Transport Jeffrey Siow's announcement on 4 March 2026 of a formal COE category review, with results expected by end of 2026.
H2 2026 Expectations (Revised)
Based on the Q1 trajectory and the structural changes from Budget 2026:
- Category A: $110,000-$125,000 range. The PARF shock and EV demand have established a new floor well above pre-Budget levels.
- Category B: $115,000-$130,000 range. Relatively stable, but the category review announcement creates uncertainty about future category boundaries.
- Category C: $75,000-$88,000 range. Commercial demand has been stronger than expected.
- Category D: $8,000-$12,000 range. Motorcycles have softened slightly, bucking the car trend.
- Overall: The market is in its most volatile phase since the 2023 all-time highs. Policy-driven demand shocks (PARF, EEAI) have overridden the usual supply-driven dynamics, and the pending category review adds a layer of uncertainty that will persist through year-end.
Frequently Asked Questions
Why did Cat A surge so much more than Cat B?Cat A absorbed the brunt of EEAI panic buying because most affordable EVs (BYD Atto 3, MG4, Tesla Model 3 Standard Range) fall into Cat A. The PARF shock also disproportionately affected Cat A sentiment, as Cat A buyers tend to be more price-sensitive and more affected by changes in the deregistration calculus. Cat B, with a wealthier buyer base, was less reactive to the policy changes.
Is the second half usually cheaper?Historically, H2 premiums are slightly lower than H1 in roughly 55% of years, with the softening typically concentrated in Q3. However, this is not a normal year — the PARF shock is a one-off structural change, not a seasonal factor. Any H2 softening may be limited to the $3,000-$8,000 range as the panic-buying wave subsides, but the elevated floor is likely permanent.
What would cause premiums to drop significantly?Three scenarios could bring premiums down materially: (1) the LTA category review creates a dedicated EV category, redistributing demand away from Cat A; (2) a macroeconomic shock reduces consumer confidence and purchasing power; or (3) deregistrations surge above expectations despite the PARF cut, boosting supply. Of these, the category review is the most likely near-term catalyst, but any changes would not take effect until 2027 at the earliest.