FOR a decade now, cars here barely made it past their fourth birthday, but that trend appears to be coming to an end.

Between 1998 and last year, 630,000 cars were scrapped or re-exported, many of them before they turned four.

But according to the latest Land Transport Authority (LTA) data, motorists are keeping their cars longer or reselling them instead of scrapping them altogether, The Straits Times reported.

In the first quarter, 15,150 passenger cars were deregistered, 20 per cent fewer than the same period last year. At the same time, there were 7,661 transfers of ownership, 47 per cent more than during the same three-month period last year.

These are early signs that the practice of scrapping cars, rather than selling them second-hand, is losing
steam.

From the late-1990s, owners found it hard to sell their vehicles on the secondary market because buyers were flocking to new cars, whose prices were falling.

New car prices dived because vehicle taxes were cut, and anti-speculative measures introduced by the
Government in the mid-1990s sent certificate of entitlement (COE) premiums tumbling.

So, motorists who found themselves with cars bought when COE prices were as high as $110,000 (in 1994)
started 'scrapping' them - an industry term referring to either sending cars to the scrapyard or re-exporting
them. By scrapping, owners could recover the cars' residual taxes.

But industry observers believe the market is at a turning point now.

"Most of the cars which can be scrapped have already been scrapped," said Mr Raymond Tang, secretary of the Singapore Vehicle Traders Association, which represents used car traders.

Mr Tang also reckoned that many current owners are saddled with high car loans. Some loans exceed
the price of the car and are stretched over a 10-year period.

Also, the amount of tax recoverable from scrapping a car is less today - owing to a formula change in 2002
meant to discourage people from scrapping their fairly new cars.

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