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  The Straits Times 3 Jul 06
Majority of cars here are under three years old
 Trend worries green groups, car workshops and even economists
By Senior Correspondent, Christopher Tan

CARS on the road here are less than three years old, fuelled by an early-scrapping trend that has not lost steam despite counter measures introduced in 2002.

Besides motor workshops and inspection centres which have been seeing a slowdown in business, the trend worries environmentalists. Singapore Environment Council executive director Howard Shaw said: 'It's yet another manifestation of our use-and-throw society. It's not something we'd encourage.'

According to estimates based on Land Transport Authority figures, 66 per cent of the 450,000 passenger cars here were less than three years old at end-June. About 85 per cent of them are less than five years old.

This makes Singapore possibly the country with the newest cars. Even in Japan, one of the top exporters of used vehicles, the average age of a car is six years. In America, the average age of a car is 10 years. In New Zealand, it is 12 years.

The dubious honour of having the youngest fleet comes at a price. Since 2000, Singapore has scrapped or exported more than half a million vehicles. This is because reduced taxes, lower COE prices and cheaper financing have brought down new car prices substantially, and diluted the resale value of existing ones. Hence, owners scrap or export their cars to recover the residual taxes. Often they are able to buy new, cheaper cars without having to pay higher monthly instalments.

Mr Shaw said: 'A huge amount of energy goes into making a car and shipping it here. We encourage people to keep their cars right up to the 10th year.'

Scrapping cars early has also been highlighted by economists as a drain on the country's foreign exchange earnings.

While new car salesmen and car owners have good reason to be cheerful, business continues to be slow for motor workshops and inspection centres. Workshop operator Bernard Low, 60, said: 'If I had not branched out to Johor Baru and Kuala Lumpur, I would have had to close shop.'

A spokesman for ComfortDelGro Corp, parent company of vehicle inspection firm Vicom, said: 'Demand for vehicle inspections has fallen. But we remain confident that there will be fewer deregistrations going forward.' She said this was because a change to the scrap rebate formula has resulted in much less residual tax values for cars registered from 2002.

But Mr Neo Nam Heng, a leading exporter of used vehicles, pointed out that an average of 9,500 vehicles were deregistered in the first five months - little changed from last year. 'We are seeing 2003 and 2004 cars in our yard now. But we would have to monitor over the next two months to see if the figures change.'
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