The automatic road toll device is actually quite common in this part of the world now, and it's got less to do with car control than with ease of passage - the tolls long predated this device. Singapore's major thoroughfares and highest-congestion highways have toll booths that only operate at certain times (or constantly, but at different rates) in order to control traffic flow through social means. If you don't want to pay the toll (and it's priced high enough that it's a real decision, but not so high that it's completely prohibitive) then you'll take a different route. As Ismail points out, you also pay to enter certain high-congestion parts of town at certain times of day.
The auto reader simply allows drivers to pass through these tolls booths with minimal or no slow-down, thereby improving traffic flow. They are also used to pay for parking in ramps and lots etc.
Cars also have different types of licenses. For private owners, you can buy a all-time-use license, or a "weekender" license, which can only be used on nights and weekends. The former is very expensive and the latter is considered fairly affordable. "Classic" cars, which are any car over 10 years old, require the owner to pay for a more expensive license to keep using them. The higher price tag is usually more than enough to encourage the owner to just get a new car, unless it's actually a collectible.
I don't live in Singapore (I'm from neighbouring Malaysia) but I have relatives there and spend a fair amount of time there. While the price of the license is related to the price tag of the car, I'm not necessarily convinced that's what drives the purchase of Japanese cars per se. The argument is basically that if you can afford an expensive car, you can afford to pay more for a license: it's a tax. You generally would just factor in the price of the license in to the cost of the car, so people buy cheap cars for the same reason people buy cheap cars elsewhere (and the same for expensive cars).
And yes, Wojtek, the public transit system is very good and they put a lot of money and effort into keeping it that way. Singapore has always been good at that - civic planning (they don't have a lot of choice, admittedly), and throwing a hell of a lot of money at something when they've decided to do it, and they'll see it through. This holds whether it's the transit system, the new arts sector or turning a political prison into a resort and theme park so that everyone forgets the terrible things that happened there and the people and ideas who dared stand in Lee Kuan Yew's way.
Malaysia has a similar device but it's not mandatory and so toll booths have cash and stored-value card options as well. That's about where the similarity ends.
Cheers, -Wu Chen
On Wed, Oct 3, 2012 at 9:48 PM, Ismail Lagardien <ilagardien at yahoo.com>wrote:
> Wojtek
>
> They have a bidding process for cars. You submit a bid, which, according
> to a friend, could cost up to $90 000. It is essentially an application to
> own a car. One outcome is that people buy cheap Japanese cars, for which
> the application could be as low as 10 or 20 000 Singapore dollars. You may
> buy the car only once you have received "permission". It gets no easier
> after that. Every car has to be fitted with an automatic toll road device.
> You insert a "cash card" and money is deducted each time you enter business
> districts.
>
> Ismail
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