Diminishing number of first-time vehicle buyers

It appears that the first-time car buyer is becoming a rare species in Singapore, saved from extinction only by wealthy parents, reported The Business Times.

According to some motor distributors here, the number of first-time buyers has dropped sharply from six months ago when the Monetary Authority of Singapore (MAS) introduced vehicle financing restrictions.

"If you are young and have just joined the workforce, it is unlikely that you have $50,000 in spare cash," said a Kia spokesman. As a result, the number of first-time buyers of the Korean brand is now 5 percent or less, compared with 30-40 percent six months ago.

"It has come down drastically because of the loan curbs. These days, our customers are mainly replacement car buyers or multiple-car owners," he added.

As first-time customers of entry-level cars are priced out of the market, it seems that at least one luxury brand is enjoying the opposite effect, if only because of an expanded model range.

At Mercedes-Benz, the number of first-time car buyers is 'traditionally a very small percentage because you have to have rich parents'. "It is very unlikely that you yourself are rich because you don't accumulate that kind of money at a young age," said a senior executive.

But what is happening as the brand with the three-pointed star introduces new and trendier models is that there are more first-time car owners, as opposed to first-time car buyers. "We are seeing more kids bringing their parents to the showroom to book a CLA-Class or A-Class," he added. The Mercedes-Benz lineup starts with the A200 from $156,000.