Channel NewsAsia
Updated: 05/03/2013 00:11 | By Channel NewsAsia

43% of used cars qualifying for full loans sold at halfway mark

43% of used cars qualifying for full loans sold at halfway mark

43% of used cars qualifying for full loans sold at halfway mark

SINGAPORE: Of the 7,000 used cars which qualified for a temporary lift on the current curbs on bank loans, some 43 per cent of them have been sold since 6 April.

Current restrictions on car loans for the purchase of used cars were temporarily lifted from 6 April for 60 days. 

Under new curbs announced in February, loans for cars were capped at a maximum of 60 per cent of the purchase price.

Used car dealers have been putting up signs on cars to tell potential buyers which ones qualify for full loans.

But such options are quickly disappearing as the halfway point in the 60-day break from loan curbs approaches.

The reprieve was aimed at helping used car dealers sell old stock acquired before the new borrowing restrictions came into place, on 25 February 2013.

Managing director of CarTimes Automobile, Eddie Loo, said this has greatly helped sales.

"We have about 37 units of those ex-stocks. We have cleared (most of them), left with two units only. So it has turned out to be not only good, it's fantastic."

When borrowing restrictions revert next month, the Singapore Vehicle Traders Association expects times to be tougher.

It said used car dealers are likely to be more careful about stockpiling second-hand vehicles.

The association also noted that some dealers have reduced office space in anticipation of slower business.

The association's honorary secretary, Raymond Tang, said: "There is still business. Business will carry on. And I think dealers might have, you see, less costs, in the way that they won't be carrying so many stocks... so it might be a bit safer for the dealers to do their business."

The association is appealing to authorities to restructure loan packages for used cars.

It is proposing that borrowing limits be raised from 60 to 80 per cent, and for loan tenures to be extended from five to eight years. - CNA/ck

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