We refer to Mr Tan Suan Jin’s letter “For simplicity's sake, use OMV to categorise cars’” (The Straits Times Online, 2 Aug 2014).

Open Market Value (OMV) is not used to categorise cars because the OMV for the same car model can fluctuate with exchange rates and different car fittings. This could result in a car model requiring a Category A Certificate of Entitlement (COE) one day, and a Category B COE the next. This would be confusing for car buyers. For example, the same model was registered with OMV ranging from about $19,000 to about $23,000 in 2013.

We have thus chosen to adopt a stable, technical proxy for the value of a car. In fact, it was this same reason that engine capacity – rather than OMV – was chosen when the car COE categories were first conceived. Like engine capacity, engine power is a relatively good proxy for the value of a car which does not fluctuate and can be measured accurately.

We thank Mr Tan for his feedback.

Helen Lim (Ms)
Director, Media Relations
Land Transport Authority