Critics warn that merging COE Categories A and B could hurt buyers of smaller, more affordable cars. Currently, Category A premiums are often lower, making car ownership accessible to middle-income families and first-time owners. Combining categories would expose these buyers to competition from luxury car purchasers, likely driving up prices.
Consumer groups have voiced concern that the change could widen inequality in car ownership. Some motor dealers argue that the current system reflects market segmentation, with different demand profiles for small and large cars. Eliminating that distinction may lead to lower overall affordability.
There is also uncertainty about how supply adjustments would work. If the COE supply for the merged category is not recalibrated properly, premiums could surge. LTA has not yet released detailed impact studies, leaving stakeholders in the dark. Until the full consequences are modelled, the proposal remains risky. Many industry players urge caution and further analysis before any decision.