The economy in Taiwan grew rapidly in the last decade. This steep increase strongly affects its transportation system: the number of cars in the urban areas increased dramatically. Some studies forecasted that the number of car in Taiwan urban areas in 2000 will be three times of that in 1984. However, those studies did not consider the feedbacks from the traffic and parking conditions to the car ownership. In addition, some of the possible changes in the system environment are also not being considered, such as the increasing life expectancy of the car, the shortening car renewal period and more and more attractive car purchasing loans policies. This study is an attempt to apply system dynamics methodology to analyze the trend with inclusion of feedback and the above mentioned system environment changes. The results show that due to feedbacks from the limited capacity of roadway and parking and the influence from the system environment, the number of cars in urban areas will only be doubled in the year of 2000. Although the data for this research were very limited, by using the system dynamics methodology we are able to have a better picture of the future trend of car ownership in Taiwan.