Uncertain economy, high fuel prices and poor resale market preventing many from going for new ones .
Assistant engineer Horace Soh has been thinking about selling his Nissan Sunny lately.
After all, he has had the car for five years and that is when owners here usually upgrade, downgrade or sell their wheels.
But with an uncertain economy, high petrol prices and little prospect of fetching a good resale price, the 37-year-old father of two is keeping his car for now.
"Job security is one thing to consider. And when you get a new car, it's a new liability as you'll have to stick with it for another three to five years. How will you get rid of it if the economy takes a turn for the worse?" he said.
Singapore's car population has been on the up and up. There were 539,540 passenger cars at the end of July, 8.1 per cent more than at the same time last year.
But it is not because more people are turning up at showrooms.
Rather, fewer cars are being taken off the roads.
This year's certificate of entitlement (COE) supply provides for 6,388 cars to be scrapped or re-exported a month.
But between January and July, an average of only 5,190 cars were deregistered each month - 12 per cent fewer than the same period last year.
Mr Tony Tan, marketing director at Borneo Motors which sells Toyota cars, said an uncertain economy, inflation and the higher cost of driving contribute to people driving less or keeping their cars longer.
"If people use less, they don't see much wear and tear and the mileage is lower. This will cause deregistration to decline and we can expect this for a while," he said.
Sales of new cars have also dropped: 58,777 were registered in the first seven months of this year, down from 65,973 during the same period last year.
"The psychological position of the consumers is, better hold on to the old car and save for a rainy day," said Mr Jacky Wong, director of Richburg Motors. He has changed tack to promote hybrid cars that are less fuel-thirsty.
Another reason is that there is little overseas demand for local cars as the Singapore dollar is stronger than many other currencies.
Cars are usually bound for Russia, Africa and Caribbean countries.
Hefty loans - up to 10 years - have also been a disincentive for drivers to switch cars. They have to fork out a sizeable lump sum in cash to redeem existing loans.
Despite more people retaining their old cars, motor workshops have not seen more business. Workshop owner Eric Tan said he receives fewer orders now at his Bukit Merah garage from car dealers to touch up used models for overseas markets.
He used to get eight to 10 such cars per month but has worked on only two in the past three months.
"There are many workshops and it's very competitive," he said.
The Government is hoping that its new policy - which kicked in on Sept 1 - of returning cash instead of handing out a paper rebate to offset taxes on a new car will encourage motorists to scrap or export their cars and switch to public transport.
But those in the industry doubt it will lure many to give up their wheels for cash.
"Cars are still very aspirational purchases. Owners are not likely to suddenly decide - in huge numbers - that they don't want to drive anymore, unless the economy takes a dive or if fuel prices skyrocket," said Borneo Motors' Mr Tan.
Mr Wong feels the move may nudge some people to scrap their cars, but not necessarily discourage them from buying another.
"You want to spend the cash and the most immediate desire is to buy a better car," he said.
This article was first published in The Sunday Times on Sept 21, 2008.
