"Rising Maintenance Costs Burden... 'Ttubuk-i' Better in High Oil Price Era" Young People Giving Up on Owning Cars [Heo Midam's Youth Report]

Rising Fuel Prices Increase Maintenance Costs... Transportation Inflation Rate Hits 14.5%
'Carsharing' Services Also Gain Popularity

Commuters are hurrying on their way to work at Gwanghwamun Station on the Seoul subway./Photo by Hyunmin Kim kimhyun81@

Editor's NoteHow is your youth remembered? From teenagers to college students and office workers, we bring you the joys and sorrows unique to 'youth.'

[Asia Economy Reporter Heo Midam] # Jo, a 30-year-old office worker living in Seodaemun-gu, Seoul, recently gave up on the dream of 'owning a car.' The soaring fuel prices are burdensome, and he felt that driving a car in Seoul during rush hour, when roads are congested, is actually a disadvantage. He said, "When purchasing a car, you shouldn't just consider the price of the car itself, but also insurance fees, fuel costs, and maintenance expenses. With rising prices already causing economic strain, I don't have the capacity to buy a car. Commuting by public transportation is much faster."

The number of people in their 20s and 30s giving up on 'owning a car' after 'owning a home' is increasing. A few years ago, the term 'car poor' (people who buy expensive cars beyond their income level and live in poverty) emerged, reflecting young people's strong interest in cars, but now they are reconsidering car ownership due to soaring fuel costs and other expenses.

According to recent data analyzed by Kaizyu Data Research Institute from the Ministry of Land, Infrastructure and Transport's vehicle registration data, new car purchases by people in their 20s and 30s, which reached 405,760 units in 2012, decreased to 299,581 units last year.

The reason young people feel burdened by car ownership seems related to economic pressure. According to the Statistics Korea National Statistical Portal (KOSIS), the Consumer Price Index in May was 107.56 (2020=100), up 5.4% compared to the same period last year. Among 12 expenditure categories, the 'transportation' price increase rate was the highest at 14.5%.

Specifically, prices for car supplies (11.0%), car tires (9.8%), car wash fees (8.7%), engine oil replacement fees (8.4%), designated driver service fees (13.2%), and parking fees (4.7%) all rose. This means that vehicle owners' maintenance costs have increased significantly.

A car is parked in the parking lot of an apartment in Seoul. Photo by Jinhyung Kang aymsdream@

Kang, a 26-year-old office worker, also obtained his driver's license earlier this year but still commutes by bicycle. He said, "It takes about 40 minutes to walk from home to work. Sometimes I walk for exercise, but usually I ride a bike. I used to want to have my own car, but since I don't have much inconvenience in daily life right now, I don't plan to buy a car for the time being." He added, "There is also a lack of parking space, and the monthly maintenance costs are burdensome."

More people are using 'car-sharing' services instead of buying cars. Car-sharing services allow users to rent a vehicle from a car-sharing company for desired days and times and return it afterward. For example, the car-sharing company 'SoCar' reported that usage time increased by 31.7% and usage distance by 25.9% compared to the previous year.

Meanwhile, the government plans to expand the fuel tax reduction to 37% until the end of the year to respond to high oil prices and increase the public transportation credit card income deduction rate to 80% in the second half of the year.

On the 19th, Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho held an emergency economic ministers' meeting at the government Seoul office and said, "From July until the end of the year, we will expand the fuel tax reduction to the maximum legal limit of 37% to induce a reduction in petroleum product prices."

He added, "To promote public transportation use and reduce the burden on low-income earners due to high oil prices, we will double the public transportation credit card income deduction rate from the current 40% to 80% in the second half of the year."