Singapore is making cars a luxury commodity

After major funding for public transportation development, the city has introduced a new road tax, becoming the most expensive place in the world to buy a private vehicle.

The Singapore municipality has committed a huge amount of public investment to the development of public transport over the past decade, adding 1,000 buses and 200 trains, while building three new underground lines to ensure that 80 per cent of households are within a 10-minute walk of a station. All in all, the government said it plans to spend more than USD 60 billion on the railway network in this decade.

Marina Bay Sands, Singapore. Foto Swapnil Bapat via Unsplash

Coupled with this strategy, however, is tight control over the number of vehicles on the roads. In fact, the government controls traffic growth with a series of quotas and taxes that can increase the cost of a car on the road by up to five times the wholesale price of the product. The main cost is the Certificate of Entitlement, available on a bi-monthly auction basis, which gives the right to drive a vehicle for 10 years in Singapore. Once it expires, it is necessary to scrap or export the car, or buy another COE. Add to this the high interest rates on car loans, fuel prices and maintenance fees, and buying a new car is financially infeasible for most citizens.

Singapore’s model of making cars a luxury, balancing the spending of billions on a public transport system, although it has its countervailing senses and imbalances among citizens, could prove to be a useful tool towards reducing CO2 emissions. Even London, for example, asks motorists to pay £15 per day to enter the central zone during the week, while New York plans to adopt a similar system next year.

Opening image: Singapore. Foto Mike Enerio, via Unsplash

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