The Straits Times
Published on Nov 17, 2012

Tightening tap on car financing is unfair


WHILE there is general agreement about the need to curb car growth, I am doubtful about the efficacy of Mr Tan Suan Jin's recommendation on how to do so ("Ways to reflect true cost of buying a car"; Wednesday).

First, buying a car is not like buying a house or private apartment. Many house buyers take a huge risk by buying high in the hope of getting even higher returns.

Therefore, we should limit financing for them so that property prices would not be driven higher by such speculative activities. Car buyers, however, do not buy cars for returns, nor do they bid high for certificates of entitlement (COEs) and sell them for a profit.

Second, limiting financing for potential buyers serves only to penalise the less well-off and those who have a genuine need for cars. As a business owner, I use my vehicle for work and making deliveries. The wealthy car buyer, however, may buy cars for fun and enjoyment, and would not be affected by any curb on car financing.

This recommendation is thus contrary to the need for fairness in allocating limited resources for Singaporeans.

I would suggest instead that car ownership be limited on the basis of per person or per entity, so that each is given the right to own only one vehicle.

In this way, car ownership will not be tied to one's financial status, and every citizen will have a fair chance of owning a car.

In addition, if it is impractical to limit ownership to one vehicle, the buyer can be required to pay twice the COE price for his second vehicle and so on, to discourage car purchases on the basis of desire rather than need.

Kendrik Hong