Out of reach

Under the new financing restrictions imposed by the MAS recently, the maximum motor vehicle loan amount will be 50 or 60 percent, depending on the Open Market Value (OMV) of the motor vehicle purchased.

Yes, you heard it right, buying a car now seems harder than it seemed. 

I, for one, was saving hard for a car of my own. Based on the new restrictions on current car prices, I would easily have to fork out $50,000 for a new car, which is a substantial 40 to 50 percent of the purchase price. 

A small figure to some it may be, but it's massive to a white-collared salaried guy like me. It seems unfair that the rich will not be faced with a huge problem buying a car, while the middle and lower income groups have to suffer more to get a car - which is something they may need.

It may seem that having new loan regulations or a new tiered ARF structure will solve the problem of having an overpopulation of cars on our roads but I doubt so. The root of the problem has not been solved. For starters, families with elderly, disabled members or even with babies are having problems getting around and it is because of the unsatisfactory public transport system. 

Just look at the trains. They are constantly jam packed like sardine cans. And don't even get me started on the frequent break downs we have been reading about. Buses are always not arriving on time due to the lack of frequency and taxis are nowhere to be seen when you need one. Even if you see a vacant taxi, they're probably on call. Talk about how convenient our public transportation is!

While some may reckon it's a good idea to hurt us via our pockets, it could be a better idea if the Government considered a more viable option such as improving our public transportation system. I mean if our public transportation system was so damn fantastic, there'll be a lot more of us who wouldn't even think about buying a car.
Just in time

Yes, I share the same thoughts with Regan. The new rules virtually wiped out our tiny hopes of getting our own rides. But it could have done more good than bad.

Unfortunately, a car is a huge monetary commitment in Singapore. And nothing more can support the fact that it's a bad time to get your own ride now. Yes, reality is hard to swallow at times, especially if you are just another motoring nut like us. 

So far, banks have been bridging our motoring dreams, allowing up to 90 percent or more of the car price for loan, and spreading the repayment over ten years. This made the tough bullet a little easier to bite.

However, it puts many of us in debts, coming out with a punitive upfront payment and leaving the main bulk for future repayments. This is a spending culture that we should never have got acquainted with. To put it simply, most of the cars that we drive on the roads don't even belong to us - we run a huge debt maintaining them. 

For the well-heeled, the new scheme will also have them ponder if a car is really necessary, or just a want. Especially if they are looking at something more prestigious than the usual Korean or Japanese makes, the new tiered ARF will knock a second time on their doors. 

Take for instance a BMW 520i - with an Open Market Value (OMV) of around $41,000, the sleek machine will attract an additional $8,400 of tax, not to mention that one will now need to put down 50% of the purchase price as downpayment - equivalent to parting with $125,000 cold hard cash. Compared to previously, when a good $20,000 to $30,000 upfront will suffice, the huge gap will certainly be something to think about.

So why the need for such extreme measures? Clearly, the massive increment in car population has been too much for the nation to bear. Expressways are no longer 'express' - even during off peak hours, they are packed with cars. Not only does it reduce productivity, it makes commuting a less joyful event than ever, and to some extent, less patient and more prone to road rage.

On that point, the new rules are just in time - better late than never.