Quarterly COE Trend Report: Q1 2026
The first quarter of 2026 has been a consequential period for the COE market. From a surprise quota adjustment in January to a Chinese New Year demand surge in February and a stabilisation phase in March, each month brought distinct dynamics that shaped where premiums sit today. This quarterly report consolidates all the data, identifies the dominant trends, and frames expectations for the second quarter.
Q1 2026 at a Glance
| Category | Jan R1 Premium | Mar R2 Premium | Q1 Change ($) | Q1 Change (%) |
|---|---|---|---|---|
| Cat A | $102,009 | $111,890 | +$9,881 | +9.7% |
| Cat B | $119,100 | $115,568 | −$3,532 | −3.0% |
| Cat C | $73,500 | $77,119 | +$3,619 | +4.9% |
| Cat D | $9,200 | $10,389 | +$1,189 | +12.9% |
| Cat E | $122,001 | $118,119 | −$3,882 | −3.2% |
The most striking Q1 development was the divergence between Categories A and B. Category A surged nearly 10% from $102,009 to $111,890, while Category B actually declined 3% from $119,100 to $115,568. By quarter-end, the gap between the two car categories had narrowed dramatically — foreshadowing the near-parity seen in the April 2026 Round 1 results. Category D posted the largest percentage gain, rising nearly 13%, while Category C continued its steady climb.
Month-by-Month Narrative
January: A Higher Starting Point
Q1 2026 opened with Category A at $102,009 — already above the six-figure mark that had seemed like a ceiling just months earlier. The new quarterly quotas saw modest adjustments, but the bigger story was the demand environment. The VES and EEAI changes that took effect in January 2026 — cutting EV rebates from $40,000 to $30,000 and removing rebates for some hybrids — had triggered a wave of panic buying in late 2025 that continued to reverberate into the new year.
Category B opened at $119,100, maintaining a $17,000 gap over Category A. At this point, the traditional price hierarchy appeared intact. But the forces that would compress this gap were already building.
February: CNY Surge Meets PARF Shock
February delivered a double demand shock. First, the Chinese New Year demand surge drove elevated bidding activity as buyers rushed to take delivery of new cars for the lunar new year. Second, Budget 2026 — announced in February — dropped the bombshell PARF rebate slash: a 45-percentage-point cut to the formula and a halved cap of $30,000, effective from the second bidding exercise of February.
The PARF cut had an immediate psychological impact. Owners who had been planning to deregister vehicles now faced dramatically lower rebates, making many reconsider. The knock-on effect on future COE supply — fewer deregistrations means fewer replacement certificates — was not lost on the market. Category A premiums pushed past $108,000 in February, while Category B held around $117,000-$119,000.
March: Convergence Begins
March was the month the A/B convergence story crystallised. Category A continued climbing, closing the month at approximately $111,890, driven by sustained mass-market demand and tightening supply. Meanwhile, Category B actually eased to around $115,568, narrowing the gap to under $4,000.
On 4 March, Acting Minister for Transport Jeffrey Siow announced a formal review of the COE category system during parliamentary debate, explicitly citing the convergence of Categories A and B as a concern. The review is gathering views from motorists and industry, with conclusions expected by end of 2026.
Category D crossed the $10,000 mark during March, driven by persistent demand from delivery and private hire services. The motorcycle quota remains the most constrained of any category.
Supply-Side Analysis: Quotas and Deregistrations
The supply of COE certificates is determined by a formula that adds net deregistrations to a small growth allowance (currently near zero). Understanding the supply trajectory is essential for anticipating future price movements.
Q1 2026 Quota Allocations
Overall COE supply increased in Q1 2026, reflecting higher deregistrations in the trailing period and the government's ongoing injection of up to 20,000 additional COEs across all categories. The Feb-Apr 2026 quarterly total stood at 18,824 certificates, up approximately 20% year-on-year. Despite this meaningful supply boost, demand absorbed the additional certificates without producing price relief — underscoring how strong the underlying demand environment has become.
Deregistration Trends
The February PARF rebate slash introduced a new dynamic to the deregistration picture. With PARF rebates dramatically reduced (formula cut by 45 percentage points, cap halved to $30,000), the financial incentive to deregister vehicles within 10 years has weakened considerably. Owners who might previously have scrapped their cars to capture a generous PARF rebate now find COE renewal via PQP relatively more attractive.
If the PARF cut suppresses deregistrations as expected, it could partially offset the quota increase, tightening effective supply and supporting premiums in future quarters. This is a critical variable to monitor — it will determine whether the additional 20,000 COE injection translates into genuine price relief or is absorbed by reduced deregistrations. Track these numbers on our deregistration trends page.
Demand-Side Drivers
New Model Launches
Q1 2026 saw several significant model launches that stimulated demand. The refreshed Toyota Corolla Cross Hybrid, Singapore's best-selling car, entered its new model year with strong order books. In Category B, the launch of the BMW iX2 and the updated Mercedes-Benz GLC added fresh demand. Each major model launch creates a cohort of buyers who enter the COE bidding system, incrementally pushing up competition.
EV Momentum and Incentive Cuts
Electric vehicles accounted for an estimated 18% of new car registrations in Q1 2026, up from 14% in Q1 2025, despite the reduction in EEAI rebates from $40,000 to $30,000 effective January 2026. The VES changes also removed rebates for some hybrid models that previously qualified. These incentive cuts triggered a rush of pre-emptive purchases in late 2025 and early January, front-loading demand that contributed to elevated premiums at the start of the quarter. As the panic buying subsides, the question is whether EV adoption will maintain its pace at the reduced incentive level.
Interest Rate Environment
Car loan interest rates remained stable at approximately 2.78% per annum during Q1, following the Singapore Overnight Rate Average (SORA) trajectory. Stable borrowing costs support demand by keeping monthly repayments predictable. Any future rate changes — up or down — would affect affordability calculations and could shift demand at the margin. Use our Car Loan Calculator to model different rate scenarios.
Q2 2026 Outlook
Based on the data and trends from Q1, here is our outlook for each category in the second quarter:
- Category A ($110,000-$125,000 range): The Q1 surge to $111,890 was validated by the April R1 result of $118,000. Six-figure Cat A premiums are now structurally embedded. The PARF slash may further tighten supply by discouraging deregistrations. A sustained break below $110,000 would require a significant demand shock.
- Category B ($115,000-$125,000 range): The Q1 decline to $115,568 was reversed in April R1 ($121,000). Cat B now trades in near-parity with Cat A, a historically unusual dynamic. The outcome of the category review could inject uncertainty, but no changes are expected before mid-2027 at the earliest.
- Category C ($75,000-$85,000 range): Commercial vehicle premiums pushed to $80,001 in April R1. Robust logistics demand supports the current level. Any construction slowdown could provide modest relief, but a floor exists around $75,000.
- Category D ($9,000-$12,000 range): After crossing $10,000 in March, Cat D eased slightly in April. Supply-demand imbalance remains the most acute of any category, with delivery services maintaining persistent demand.
- Category E ($118,000-$125,000 range): Cat E at $121,001 is now essentially at parity with Cat B, having lost its traditional premium. This unusual alignment may persist as the A/B convergence reduces the need for the Open Category as a Category B fallback.
Strategic Considerations for Buyers
For buyers planning a purchase in Q2 2026, the data from Q1 offers several actionable insights:
- Budget for current levels: There is no evidence of an imminent collapse in premiums. Plan your finances around current price levels, not hoped-for declines.
- Monitor deregistrations: The single most important leading indicator for future supply is the deregistration rate. A sustained pickup in deregistrations would be the first signal of eventual supply relief.
- Consider timing carefully: Historical data shows that mid-quarter rounds (the second and third exercises of a quarter) sometimes see slightly lower premiums than the first exercise, when pent-up demand from the previous quarter spills over.
- Use our tools: The Bid Advisor incorporates the latest bid ratios and trend data to give you a real-time signal on whether conditions are favourable in your category.
Frequently Asked Questions
What drove the big Q1 price movements?Multiple factors converged: the VES/EEAI incentive cuts in January triggered panic buying that spilled into Q1; the Budget 2026 PARF slash in February changed the deregistration calculus and may be reducing future supply; and Chinese New Year demand compressed into early February. Category A rose nearly 10% while Category B actually declined 3% — a divergence driven by intense mass-market demand versus more stable luxury-segment dynamics. The result was a historic convergence between the two car categories.
How are quarterly quotas determined?LTA uses a formula based on net deregistrations over a trailing period, plus a small vehicle growth allowance. The quota for each quarter is announced before the first bidding exercise. The formula creates a natural feedback loop: more deregistrations lead to higher future quotas, and fewer deregistrations tighten future supply. Learn more in our quota formula explainer.
Is Q2 a good time to bid for COE?Q2 is historically a moderate period for COE demand — the Chinese New Year effect has faded, and the year-end rush has not yet begun. However, Q2 2026 faces the headwind of reduced quotas. There is no universally good or bad time; it depends on your category, budget, and flexibility. Our month-by-month analysis can help you identify historical patterns.
What would cause premiums to drop significantly?A meaningful decline in premiums would likely require one or more of: a sharp increase in deregistrations (boosting future supply), a policy change that adds certificates to the system, a recession that dampens demand, or interest rate hikes that make car loans less affordable. None of these appear imminent as of early Q2 2026, but conditions can change rapidly.