Singapore slaps limit on the number of cars on its roads

Self-driving taxis hit the streets in Singapore
Self-driving taxis hit the streets in Singapore

It's about to get even harder to buy a new car in Singapore.

The Asian city-state says it won't allow any increase in the number of cars on its roads as it seeks to cut traffic on its congested streets.

Singapore is already an incredibly expensive place to own a car. Drivers need to buy a special certificate from the government -- which can cost as much as 50,000 Singapore dollars ($37,000) -- before they can hit the road. The certificates last 10 years, and authorities hold monthly auctions for them.

Vehicles are also subject to huge price markups because of various taxes and import duties, which means a small SUV can set you back more than 100,000 Singapore dollars ($74,000). And that doesn't include the cost of the certificate.

Related: Entering central London will now cost some drivers $28

Currently, the government only allows the number of private cars on the road to increase just 0.25% per year. But starting in February, it won't allow any increase. That means aspiring car owners will have to wait for other drivers to give up their certificates in order to get permission.

Singapore's Land Transport Authority said the decision was driven by traffic congestion and a shortage of space. The densely populated territory has a land area less than half the size of the city of Houston -- but more than twice as many people.

Singapore traffic
Densely populated Singapore is struggling with traffic congestion.

Related: 'Vending machine' in Singapore will serve you a Ferrari

The government wants to get more people out of their cars and onto public transit. It plans to spend 28 billion Singapore dollars ($21 billion) on building and upgrading rail and bus networks over the next five years.

While the city's rapid transit system is mostly modern and efficient, it has drawn criticism in recent years following a series of high-profile breakdowns.

The new freeze on vehicle numbers won't apply to trucks and buses for the time being. They will be allowed to continue to increase at 0.25% per year.

Related: These countries want to ditch gas and diesel cars

Singapore had about 600,000 private vehicles on the road at the end of last year. The city has a population of around 5.6 million.

The halt on car numbers might not be permanent, though. The government says it will review the decision in 2020.

Personal Finance

CNNMoney Sponsors