Small Payments Can Help Take Cars Off the Road Cost-Effectively

This study investigates the effectiveness of monetary incentives to encourage individuals to give up car ownership. In a survey experiment among 1,143 car owners from a representative sample in Germany, participants received hypothetical offers for an annual payment scheme requiring them to give up all privately owned cars, with the option to reassess each year. Depending on the payment amount of € 300, € 1,500, or € 3,000, 6 % to 19 % expressed a willingness to forgo their car, while about half would retain it regardless of the amount offered. A cost-benefit analysis suggests that the lowest payment would be cost-effective due to reductions in externalities arising from car usage, even if low-mileage vehicles were given up. Considering the added value of freeing parking space, cost-effectiveness could extend to higher payments. The study also presents a real-world case from Marburg, Germany, where a large pilot has been implemented, offering practical insight into implementation.