Singapore's motor vehicle policy: Review of recent changes and a suggested alternative

Abstract

This paper reviews recent developments in motor vehicle policy in Singapore, viz. the motor vehicle quota and weekend car schemes as well as regulations on cars entering and leaving Singapore. The adoption of a vehicle quota system over and above tax restraints on car ownership has made the job of the planner easier but has resulted in a great deal of price uncertainty in the motor vehicle market. The attendant result of price uncertainty has been speculation or rent seeking, necessitating several adjustments to the rules for the vehicle quota scheme in an attempt to counter speculation. This paper proposes that the object of bidding should be changed from that of a right to purchase a new car to that of a car ownership right. This will eradicate the problem of speculation as well as problems faced by firms in the motor vehicle distribution industry arising from the implementation of the current quota system.