50% OMV Car Loan Cap for Singapore - Impossible To Buy New Car?

Singapore Car Loan Cap Now 50% of OMV: How Has It Affected You?

For many hard working Singaporeans, the only way of owning a car is to first obtain a car loan. But new government loan caps and repayment period restrictions have made this once-useful option available to far fewer people.

50% Car Loan Cap

Singapore car loan capped to 50%

Car loans are now capped at 50% of the OMV (open market value) for cars worth more than S$20,000, and 60% for cars with an OMV of less than S$20,000. The vast majority of would-be car buyers will be affected by the 50% cap.

5 Year Maximum Car Loan Period

But as well only being able to get 50% or 60% of the finance for a new car, any loan taken out must be repaid within 5 years. For many families, this would increase monthly outgoings to a much higher level than under the old rules.

While the new loan restrictions make it tougher for many working Singaporeans to meet repayments, for those who have additional costs to meet – such as paying medical bills for an illness – the new limits may make owning car almost impossible. The situation may be worsened if such a person depends on having car in order to carry out their day-to-day business – such as taking their children to school if they themselves are too ill to do so by walking/public transport.

Fuel Efficient Cars And Affordable Insurance

As in so many costly areas of life, technology and other innovations have helped to ease the rising cost of motoring. With petrol prices having increased much faster than inflation, the car manufacturing industry has responded by producing extremely fuel efficient cars. The latest Volkswagen BlueMotion (diesel), for example, delivers an incredible 3.14 L/100 km; (89.8 mpg – imperial) – although the BlueMotion is not yet available in Singapore.

In car insurance, too, great leaps forward have been made. DirectAsia.com is leading the way in delivering affordable motor insurance to all Singaporean drivers – chiefly by cutting out the middleman, who may add a commission at average 15% of the entire premium. This, in unison with excellent customer service and a hassle-free claims process, have shown that there is indeed a much cheaper way to deal with your insurance needs – while still getting world class cover.

How Have The New Car Loan Restrictions Affected You?

The new loan rules from the Monetary Authority of Singapore (MAS) represent a big change for car buyers in Singapore. How will the changes affect you? Feel free to tell us your stories in the comments section below.

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5 comments

  • I see no reasons and don’t understand why MAS has to come out with new car loan policy. Before the new car loan policy came into effective, one of the member of parliament said, government is aware of every Singaporean wanting a car, and government will made it happen, but suddenly the new policy step in and ruined the dream to own a car. Perhaps, government should remember the word the minster has said on 2013, and the word the government said is like an Imperial edict once said cannot be changed, but I am very sad with the new policy as many are unable to buy a car due to lack of money.

  • In that case, maybe they should also consider limiting the housing loans to curb the sharp increase in property prices. The property prices has rose by at 70-80% over the past few years.

    In the first place, the government is the one who cuts the COE quota and thus causing the COE to shoot up. This is a straight forward supply and demand thing. If the government is looking at using financial methodology to resolve such increase, they should use it on the housing market.

    There are many people in Singapore that are not able to have roof over their heads due to the high property prices and the regulations set by HDB on concession and allocation of the HDB flats.

    As a Singaporean, we should be entitled to a HDB flat and concession loan irregardless of the income cap especially in the case of SINGLES above 35 years old. Allowing singles to buy a 2 room flat direct from HDB is just an indirect way of tell the singles to go resale market to get their flat.

  • Yes both comments really can be argue but let’s just follow what’s changing. But now if you want to purchase a brand new car from those “classy” showroom like BMW, Audi or others. You wouldn’t be able to do so unless you’re rich or you own a existing car.

    Therefore our team and I cam out with SGcarSale. SGcarSale is targeted to bring in quality but yet affordable used cars to people in singapore. Actually to be honest, a car in singapore is essential. We need to be here and there, therefore having a car is really essential. Yes, you may argue there’s many MRT or buses in singapore, that’s right.

    Unless your single, yes public transport could be one transportation to take. With the population in Singapore, you’ll have to squeeze in there… Do you wish to do so? Yes maybe you would argue again. Maybe you’re thinking that public transport will be alright if you need to spent much lesser. I agree.

    Now forward it to the next two, five or even ten, by now you’ll be unable to argue. You’ll have family. Your children will need to be transported everywhere. Tuition, shopping mall, home, EVERYWHERE…

  • The present way the Gov is treating and regulating the car population in Singapore, will led to problems coming back and bite them back even HARDER. Using MAS to control the demand is NOT going to solve traffic jams and over-crowding in Singapore in the first place! You are literally forcing Singaporeans up the wall! And you (the Gov) to think all the people will support and keep taking public transport?! Fat hope….If you want most Singaporeans to take up public transport instead of driving, then you jolly well make sure public transport here is REALLY WORLD-CLASS standards, mind you!

    As of now, we have to squeeze in crowded buses, get caught in jams even though we set off early for work, and that the buses and MRT DO NOT come timely!!!

    Please, please give thoughtful solutions instead of harsh-and-make-NO-sense kind of car control policies. This is deployable and discouraging. Do you ever think locals would want to retire here anymore, huh?

    • We’re hearing a lot of growing frustrations on transportation in Singapore. Not just car prices (everyone’s always complained here) but also public transpo now too.