Singaporeans Bid for Right to Own Cars as City Imposes Limits to Ease Traffic Jams

Taxes already make cars more expensive than apartments, and now Singaporeans have to bid for the right to own one.

It’s all part of a government campaign to restrict private car ownership and ease traffic jams in prosperous Singapore, which still is one of the least congested major cities in Southeast Asia.

Because the government determines the number of new vehicles that will be allowed on the road, taking delivery is no longer just a matter of picking a model and arranging to pay for it.

Anyone who wants a car must bid for a “certificate of entitlement” at the monthly auction. For unsuccessful bidders, there is a flourishing black market in certificates.

The quota system was introduced in May because such standard remedies as one-way streets, special bus lanes and staggered office hours had provided only limited relief from traffic jams.

Something called Electronic Road Pricing probably will be the next big move to make motorists pay.

Government planners expect that by the mid-1990s each vehicle will have electronic number plates and a small black box on the undercarriage. Sensors will be embedded in street surfaces and car owners will be charged for using the roads just as if they were consuming water or electricity.

Each mile will be priced according to the day and hour, with prices increasing as the motorist approaches the heart of the city. Bills will be rendered monthly.

Weekday access to Singapore’s central business district now is restricted during rush hours. Buses and cars with at least four occupants are allowed free entry, but drivers of trucks, motorcycles and other cars must buy windshield stickers.

A 175% tax and other fees drive up the price of a good-quality Japanese sedan to between $34,000 and $40,000 U.S. About 80% of the city-state’s 2.7 million people own government-built housing, paying more than $28,000 for a three-room apartment.

By last year, 10% of all taxes collected came from duties on gasoline and motor vehicles. Critics said the government had both failed in its attempt to restrict the number of new cars and profited from that failure at the expense of motorists.

A parliamentary investigation reached the conclusion that huge taxes and other fees had not worked. During boom times, the report said, no financial hurdles are high enough to deny people with money their No. 1 status symbol.

Since the pricing policy didn’t work, officials decided to restrict the number of new vehicles.

Monthly bidding for seven types of certificate lets the public name its own surcharge for a new car. They cover small, medium-size, large and luxury cars, motorcycles and trucks, plus an open category for any type of vehicle.

Bidders pay the equivalent of 27 cents for an application form, only one to a customer each month. Successful bidders are notified several weeks later.

In the first auction in May, luxury car certificates went for the equivalent of $264 and later cost up to $3,000 on the black market. A bid of $1,511 won the right to buy a smaller car and the certificates brought $2,250 on the black market.

One recent auction attracted 14,888 bids for a total quota of 4,573 certificates.

Successful bidders, including many speculators, profit by reselling certificates at a premium. The government has resisted urgings that the documents be made non-transferable to stop the black market.

The Automobile Assn. estimates speculators will get a windfall of $2.5 million in the first year of the quota system, “which will not help build more roads or improve other traffic infrastructure. In the end, the motorists are the losers.”

Minister of State Mah Bow Tan said: “So long as the economy is sound, our land limited and our people want to own cars, the quota premiums are likely to go up.”