'Significant rebates' needed to drive off-peak scheme

Rebates for off-peak cars have to be raised by nearly half to get more young people to opt for the scheme.

Of 501 people polled, only 22 per cent would consider a red-plated car over a normal car, based on the existing rebate of $17,000.

When the rebate was hypothetically raised to $20,000, only 22.8 per cent said they would opt for off-peak cars, which cannot go on the road between 7am and 7pm on weekdays.

This went up to 33 per cent when respondents were presented with a $25,000 figure.

"This would indicate that significant rebates have to be provided in excess of $17,000 before you see some real shift in demand," said Dr Jack Loo, chief methodologist of Nexus Link, which conducted a survey commissioned by The Sunday Times on young people's attitudes towards car ownership.

The rebate for off-peak cars can offset the certificate of entitlement (COE) price and registration fee in buying a new car. Owners also get a discounted road tax.

 

As of July this year, there were 25,816 off-peak cars on the roads here, or 4.6 per cent of the total car population of 561,595.

The rebate has been unchanged since 1994, when it was raised from $15,000 to its present amount.

National University of Singapore transport researcher Lee Der Horng said a $25,000 rebate is a more substantial offset against the cost of a car, given that COE car premiums currently exceed $50,000.

Some respondents said the limited driving hours deterred them from buying an off-peak car.

Ms Hui Qing, 32, a human resources executive, said she would not buy an off-peak car even if the rebate is raised. "If I buy a car, it would be for the convenience to get to where I need to go, when I need to."

Some experts said the scheme is outdated.

SIM University economist Walter Theseira believes it will eventually be phased out in favour of technological solutions such as the upcoming satellite-based ERP 2.0, which measures car use more accurately.

The current hours for off-peak cars do not necessarily correspond with periods when roads are less congested, he said. "It is a fairly crude way of measuring and controlling the demand for cars."

A version of this article appeared in the print edition of The Sunday Times on September 11, 2016, with the headline ''Significant rebates' needed to drive off-peak scheme'. Print Edition | Subscribe