SINGAPORE: Car dealers on Tuesday said middle and lower—income groups may find it difficult to own a vehicle with the new rules in place.
The government on Monday announced a slew of measures, tightening the noose on car loans and registration fees.
This has prompted strong reactions from the industry and prospective buyers.
Under the Monetary Authority of Singapore (MAS) car loan curbs, buyers have a maximum of five years to service their car loans.
They also have to foot a downpayment of 40 per cent or more for a new vehicle.
To top it off, Additional Registration Fee increases will apply to more expensive cars.
This has sent buyers and the market reeling.
Carway Enterprise, which helps buyers borrow to buy cars, said loan applications dropped by 30 to 40 per cent a day after the measures were unveiled.
Other car dealers said more time is needed to see what the real effects are.
Eddie Loo, managing director of CarTimes Automobile, said: "We have a mixture of customers —— those who come and buy (with) cash, but there are definitely people who want a hundred percent loan.
"So it’s almost like 50—50 kind of market that people come into. So to penalise those who need a car and have to fork out 50 per cent of the loan amount, I think, the timing is not very correct."
Prospective car buyers are also feeling the pinch.
John Molina, a prospective car buyer, said: "I want to buy a car, but because of this, I mean it’s impossible for me, or it’s almost near—impossible."
Another prospective car buyer, Mark Lim, said: "For those people who are really very rich, to them there’s no effect —— today I want to buy a Ferrari, for example, I don’t even care about how much is the downpayment."
Still, others have suggestions on how to ease the pinch.
Singapore Vehicle Traders Association’s honorary secretary Raymond Tang said: "The government should consider looking into the aspect of weighing these loan curbs —— should not be bringing it into the used car market."
He said the used car market is for people whose "budget is very constrained".
Questions which prospective buyers will be asking in the months ahead are: "To buy or not to buy, and which model? Can I even afford a car?"
Eyes will also be keenly watching how the Budget measures will affect the prices of Certificates of Entitlement (COEs) for cars. This will in turn determine just how expensive owning a set of wheels in Singapore will be.
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