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A Singaporean Shares With Us The Cost Of Owning A Car In London, And How It Compares To Singapore

The high cost of car ownership may encourage people to increase their car usage.

One year ago, my family and I moved to London for my further studies.

Given the need to commute regularly to Oxford each week (about a 90 minute drive), I decided to purchase a second hand car for a grand total of 850 pounds (about S$1,700 back then).

It was an interesting experience buying a car overseas. In the morning I went online, searched, found something within my budget, and met up at the very same evening with the previous owner. After paying him the money in cash, I drove home the car, a 2003 Vauxhall with some 71,000 miles. Insurance was purchased separately.

uk-carVariable costs of owning the car include car tax (about 110 pounds every six months), petrol (about 30 pounds a week) and the parking permit (10 pounds a month). Up till date, I had no major problems with the car…hopefully it stays that way.

Owning A Car, But Leaving It At Home

The low cost of owning a car means that I have little qualms leaving the car at home whenever I travel to Central London – which is both prohibitively expensive to drive into, given the 10 pound congestion charge, and the extremely limited (and equally expensive) parking space (how does 4 pounds per half hour sounds?).

To be certain, the Tube (London version of the MRT) is not cheap either. A peak hour trip is about 3.90 pounds one way, but given the convenience of getting into Central London from the suburbs without driving through heavy traffic is certainly a bonus.

The usage of the car is limited to the weekly study trips to Oxford, weekend trip with the family, and family errands such as the weekly visits to the Oriental supermarket.

Since my wife is pregnant, having a car to ferry her (and the kids) to hospital for regular check ups certainly saves a lot of time. Given the age of the car, we have not used it for long distance trips that require more than a day. For these longer trips, we choose to rent a car instead.

So what has the past year taught me about how people choose to drive?

Lesson Number 1: Opportunity Cost Matters More Than Actual Economic Cost

We often think that the fundamental way to suppress demand is to increase prices.

While this is true to some extent, owning a car is slightly different, particularly if the cost of buying a car is high.

Folks who pay more for a car are likely to drive it regularly, even when it’s more convenient to take the public transport. The logic here is that having paid so much for the car, it would be a “waste” to just leave it at home for the day. For example, if you spend $100,000 for a car, and can only drive it for ten years, each day of the car life span would cost you $30, even before including other costs.

In my case over the past year, the car would cost me only 2 pounds a day (about $4) if I leave it at home. Hence, unless there is a compelling reason to drive out, it would make more sense for me not to drive. The inconvenience of being stuck in traffic far outweighs the benefits of driving. The question that I ask myself each time before deciding to drive is: would the drive be worth my time, energy and cost?  

Lesson No 2: Car As A “Necessity”, Rather Than A “Luxury”

In Singapore, we like to think of cars as luxury items, partially because of the cost of owning one, and also because of what the authorities sometime say.

The reality of the matter is that whether a car is a necessity or a luxury item is largely dependent upon the needs of the individual.

If one is single and have little family commitments, then having a car is not as important. However, if one has to run family errands, such as doing the morning school runs, or having to take family members to the hospital on a regular basis, not having a car is certainly very inconvenient. In the latter case, the car is viewed as a “necessity”.

Interestingly the hospitals we have visited here have far more disabled lots than the hospitals in Singapore, thus suggesting that the authorities take a far more sympathetic view to those who may be not so mobile while at the same time recognizing driving as a “need”, rather a luxury.

Lesson No. 3: Air Pollution

This is where I think a strong case can be made for limiting car usage (not necessarily ownership) in Singapore.

The air quality in Central London is known to be highly polluted and one reason is due to the fact that many cars are stuck in traffic with their engines purring away. Given that Singapore is far more limited in its land space than London, it would be terrible if our roads were chock-full of cars “smoking” away.

In this respect, it would make sense for our authorities to make it expensive to use a car so as to encourage public transport usage. However with newer technologies, the problem of gas-guzzling, smog-emitting vehicles may be a thing of the past, not to mention the possibility of car sharing, carpool options which further help to reduce amount of pollution.

Ultimately, between owning a car and taking public transport, our experience here remind us that people drive for various reasons. There is a world of difference between car ownership and car usage.

Levying a high cost on the former may not be the best option to resolve the latter. Singapore can find a more comprehensive approach between balancing the need for car ownership and car usage.

This article was contributed to by our reader. 

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