Car restraint policies and mileage in Singapore

•The research infers the mileage impact of two “hard” TDM policies targeting ownership and road usage in Singapore.•The extra cost pertaining to the TDM ownership restraint accounts for more than half the purchase price of a car.•The variable cost of ownership is inferred to have a more significant impact on mileage than the sunk cost portion.•For road usage charges, more ERP gantries is associated with higher mileage.•These findings suggest TDM policies need tweaking to reduce mileage.

Negative externalities often surface after policies are implemented. This paper analyses how two “hard” Travel Demand Management (TDM) policies implemented in Singapore to target vehicle ownership and road usage may contribute to a negative externality namely excessive mileage accumulation. This has implications on resource depletion such as petrol wastage, higher CO2 emission and losses in time and productivity. Vehicle ownership in Singapore is managed firstly via the requirement to bid for a Certificate of Entitlement (COE) which entitles the usage of local roads and secondly via the payment of an Additional Registration Fee (ARF) which is refundable between 75% and 50% to incentivise the de-registration of a vehicle before it is 10 years old. Such deregistered vehicles may also be eligible for a COE refund between 0% and 80% depending on age. The COE and ARF costs are significant as they typically account for more than half the purchase price of a vehicle. Furthermore, road usage is subject to Electronic Road Pricing (ERP) fees on busy segments. A sample of over 8700 used cars is analysed to infer the effects of the non-refundable (or “sunk”) and the “variable” portions of the combined cost of COE and ARF as well as the number of ERP gantries on mileage over and above traditional factors such as petrol price and engine size. The findings suggest tweaks to the TDM policies to reduce mileage and its negative implications.