Fuel-efficient cars found to be worth their extra cost

A study by Singapore’s Ministry of Trade and Industry indicates that residents could save SG$536 (US$432) on fuel costs within five years, by switching to more fuel-efficient cars.
Despite their higher price tags (it is estimated that buyers spend 0.6% more for every 10% improvement in fuel efficiency), the government study shows that the higher costs can be recovered within five years.
Car buyers have a strong incentive to switch to more fuel-efficient models. In January, Singapore launched a new Carbon Emissions-based Vehicle Scheme (CEVS), which grants rebates of up to SG$20,000 (US$16,150) for cars that emit no more than 160g/km of carbon dioxide.
Using a statistical model that filters out various other attributes that might influence a vehicle’s price, the study found that the CEVS boosts the returns on investing in a fuel-efficient car by almost 10 times.
Car dealers said that while the CEVS has given buyers an incentive to purchase more fuel-efficient cars, the rebate works out to be less in reality because the tax cut translates to a smaller scrap value when the vehicle is finally deregistered. (February 26, 2013)