Have an old car? Here’s why the average age of Singapore cars is rising. This is part 1 of a three-part series where Steer explores the aging car population in Singapore.
The Context: Aging Car Population
The average age of cars has stagnated for the past year, according to LTA data . The proportion of cars above 3 years old is now at 60%, rising from 58% at the start of the year.
The age of cars have a very significant impact on the car servicing industry, as 1) older cars tend to use independent workshops and, 2) older cars will need more frequent servicing.
There are a multitude of reasons to why cars are getting older, we cover the most significant ones below.
1) COE prices growing again
COE prices used to be nearly S$100k in 2013, this has fallen very significantly to $20-30k by the end of last year. Since then, COE prices have started to rise again, and are now at $30-40k.
When COE prices rise, the likelihood of a car owner scrapping his/her car at the 10-year mark falls, as a renewal fee (for 5 years) of only 50% of Prevailing Quota Premium1 needs to be paid2.
This is also means that the car owner forgoes buying a new car, resulting in the average age of cars rising.
2) Government slowing car supply
In October 2017, the Singapore government announced that it would be cutting its target Singapore vehicle growth to zero.
This means that there will be only be new cars for every car that is scrapped.
This results in fewer new cars and results in a higher average car age.
3) Private Hire Vehicles (PHV) stagnating
2015-18 was a time where ride-hailing companies expanded their fleet significantly.
To do this, rental companies had to expand their fleet to service the ride-hailing companies. This meant buying new cars to rent.
Since the Uber-Grab merger, fleet sizes have stagnated, resulting in less need to buy new cars and resulting in a higher average car age.
4) Better vehicles = longer lifespan
Manufacturers are getting better at making vehicles, which means a longer vehicle lifespan.
This results in an aging car population.
Own an old car? Service it regularly
Owning an old car is not easy. Servicing your car regularly can prolong the lifespan of your car.
You can search and book workshops on Steer, where the over 1,000 workshops can fix any problem you might have.
Chat with us if you’d like any recommendations.
1 Last 3 months average of COE prices.
2 Renewal for 10 years exists at 100% of PQP, but typically owners renew for 5 years.