I refer to the appeal to ease car loan restrictions.
“It is proposing that used-car buyers be allowed to borrow up to 80 per cent of the purchase price and for the loan to be serviced over eight years, instead of 60 per cent and five years under current rules that took effect late February.”
On this occasion, I would say that the government is perhaps right to impose tighter car loan conditions.
The COE is nearing the highs of 1997 financial crisis. Buying a car at today’s price is highly risky. Home mortgages or rental easily sliced off 40 percent of household income. Car loan may cut off a further 20 percent. After CPF, what more is left for monthly expense?
While the government may have good intentions, it must also recognise that car ownership is both an aspiration and a necessity for the middle class. Private housing is already out of reach for many. The only ‘prize’ sadly remaining is the freedom to zip around without having to squeeze on the bus or trains.
Given the current state of the public transport system, it is understandable that owning a car still has its strong appeals.
One, car is convenience. You drive from point to point without interruption by weather. This is a key consideration especially if you need to ferry young, old and the sick and disabled. Try calling a taxis when it’s raining.
Two, car shortens traveling time. Unless the government has the political will to implement island wide bus lanes, travel by car is still faster and more efficient. This is a key consideration during the weekends where you can get more things done with a car.
It is certainly a difficult task for the government to balance the need to protect household from excessive debt and allowing individuals to have better mobility driving around.
In the longer term, only a sustainable expansion of the transport system, along with a controlled increased in population, can make commuting by public transport more appealing. Only then would the government have a stronger case to limit car ownership. However, going by the recent track records – train breakdowns, bus accidents, looming fare increase – government face an uphill task to convince the public that is able to solve the transport woes. Credibility is at stake.
In the near term, controlling the car population certainly helps to lessen congestion, but is the government prepared bear the brunt of the middle class who have been squeezed out of the private housing and now also the car market? Clearly there is no easy answer but the public expects the government to deliver miracles. The government should not underestimate the pent up frustration that is building up.
Chin Wei
* The author blogs at https://blogbuster88.wordpress.com.