Car Ownership - How much pain can one take

Car Ownership – How Much Pain Can One Take?


Having walked on the moon, dived the deepest ocean and crossed the sound barrier, overcoming challenges is, quite clearly, a defining quality of the human race. When it comes to traffic management, therein, lies a cat and mouse struggle between city administrators and drivers. Aside from being a practical issue, it is also a tempestuous political issue that stirs up emotions on all sides.


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In the past decade, the island nation has seen unprecedented growth. The population grew from 4.59 million in 2007 to 5.61 million in 2017. In that same decade, median gross monthly income has increased 66% to $4,232. The vehicle population also grew to 612,256, up 19%, although this is due more to policy than household wealth, as evidenced from a drop between 2014 and mid 2016 as a result of loan curbs in force then. The car population then sharply reversed its decline in 2017 when those same loan curbs were relaxed. To fit all these cars, about 12% of Singapore’s land space is made up of roads, representing a growth of 8% in total road length to 9,300km, taking into consideration multiple lanes. This yields a ratio of road length to cars of 1:60 in 2007 and 1:66 in 2017. In a nutshell, against a backdrop of a prosperous, growing population the roads are becoming more congested despite a highly regulated system for controlling car ownership.


This array of measures designed to rein in car numbers have ranged from the decades old COE method of constraining supply and import duties (OMV), to increasing parking costs, making paid parking less avoidable, ditto for ERP, high petrol duty, and auto-loan restrictions. They have all been designed to make car ownership more difficult, more burdensome and ultimately more painful for those still staunchly holding out. There is no doubt that these measures have attained its intended effect but there is still no mass exodus towards a car-lite society our continued love affair with the automobile raises the question, how much pain can a car owner take before throwing in the towel? To answer that question, we have to take a look between the numbers, and tease out some explanations.


Image: SGfeed


Discretionary income levels undoubtedly form a basis for making decisions about vehicle ownership. It is intuitive that the more well off will be buying the more expensive cars, own more cars per household and be less affected by monetary disincentives to give up car ownership. As evidenced by studies by the National Statistical Office, The Department of Statistics, the more well off have been counting on their 4-wheeler as their primary form of transportation since 2000 through to 2015, when the last general household survey was carried out. Those staying in landed properties and use a car as their only mode of transportation to work had remained at a constant 50% – 55%, unchanged in spite of increasing COE prices and other measures aimed at inducing drivers to abandon car ownership. The time-worn adage that time (read: convenience) is money appears to hold true and those with the resources will avail themselves of it to buy more time for leisure, work and other pursuits.


However, with time being a finite resource and infinitely precious, many in lower income brackets are also willing to make sacrifices to enjoy the conveniences of owning a car. In households making up the top 20% income bracket, 61% own at least one car, but even in households amongst the bottom 20%, 16% choose to prioritise car ownership. Despite the socio-economic differences between the two groups, their rationale is the same – to save time and convenience – especially in families with children, the disabled or aged.


With the highest income earners practically unfazed and a good proportion of the lowest fighting tooth and nail to hang on to their cars, where does that leave the rest of us? Fortunately, a measure of respite has come with the arrival and steady growth of the ride-sharing industry in Singapore. Rental cars, which are heavily made up of those pressed into service for industry players such as Grab, rose by 6 times in the 10 years leading up to 2017, with the largest jumps during the 2014 through 2016, when loan curbs were in force. As the dominant player, Grab, has a pool of 100,000 vehicles under its various brands, like GrabHitch, GrabShare and GrabCar as of 2018. This surpasses the traditional taxi fleet by about 4 times and only looks set to grow with recent acquisitions and new entrants in this segment such as Ryde – a bane for cabbies but a golden opportunity for car owners to possess their own vehicle.



Taking higher auto-loans is the other sacrifice that most are willing to make to stay behind the wheel. The Credit Bureau Singapore reports more motorists taking up car loans in 2017. The number of car loans from 2012 till 2017 increased to 77,000 from 65,000. However, loan size has declined, meaning the loans are used to finance modest makes of cars rather than top end Ferraris. This indicates that the average Singaporean is likely to be taking loans to fund their vehicle purchase.


The other concessions that car owners are willing to make to stay behind the wheel, is to have access to a vehicle not actually own the car. Car leasing and car sharing clubs have risen in popularity. Amongst the top 3 car clubs, such as Car Club, Smove and WhizzCar, membership has hit 20,000. Late 2017 also saw the arrival of electric car sharing company, BlueSG.


Owning a car has become increasingly complex in a tightly regulated environment, and it seems that for a large proportion of us here, there is a dogged determination to bite the bullet and soldier through the pain of car ownership. This inelasticity of demand all comes down to the perception of worth or utility and critics of policy have decried everything from the perceived inadequacies of public transport, habit, convenience, laziness to prestige. A peculiar aspect of human nature is that we crave the unattainable. An item that is scarce, an unattainable goal become an object of desire and a status symbol for those who have it. It attracts attention from those around and the feeling of pride can be quite addictive.


Ironically, the successes of car lite policies also play some part in making driving seem like a good choice. Road congestion fairly light and a lot of work is done by city administrators to keep traffic moving smoothly. This makes driving relatively convenient as gridlock never really sets in as severely as it does in other major cities.


These serve to strengthen the resolve of car owners or aspiring car owners to own a car which, even in its absence, has already proven to have a respectably high threshold to tolerate anti-car policy pain, over more than 2 decades of strict controls.

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