Abstract: To analyze the factors that affect the household car ownership and its mechanism, the system and system structures were analyzed by using the method of system dynamics (SD). The causal chains between various factors and household car ownership were distinguished. The SD modal was built based on the data obtained from SP on-line survey. The factors that have influences on household car ownership were classified according to family characteristics, economy, transport mode, urban form, policy and culture. These factors were classified into positive and negative sets. Two negative feedback loops that explain why the car ownership is at a low level in high-density metropolitan areas, were identified. One is the negative feedback loop between road traffic congestion and household car ownership demand, and the other is between parking supply and household car ownership. Model test results show that the parking fee has not reached the equilibrium level in China's big cities, and the demand for purchasing or holding cars will be suppressed when the parking fee increases.