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Used car dealers sell most of stock as reprieve ends

05 Jun 2013|5,379 views

As the loan reprieve for used cars ended yesterday, most of the stock that could be sold with full loans had been snapped up.

While most traders were relieved to have sold their remaining stock, they are also bracing themselves for a slump as they are struggling to buy used vehicles

A Land Transport Authority (LTA) spokesman said about 5,200 of the 7,000 used cars that dealers had acquired before the loan restrictions kicked in had been sold as of yesterday.

This tally may go up as it takes a few days to finalise sales documents.

Apex Trading Managing Director Thomas Lim said that while he is happy to have sold the 20 cars in his fleet in the last two months, he is projecting business to slow or plunge.

His business has already fallen by 40 percent in the last month because he does not have enough cars to sell. "No one is interested in selling their old cars as they can't afford to replace them," he said.

As Mr Lim rides out the downturn, he is looking to cut the monthly $60,000 overheads cost for rental, utilities and salaries at his Turf City dealership.

Bigger dealerships, however, are hunkering down and looking to restructure their business.

Mr Eddie Loo, managing director of CarTimes, is leasing out his fleet and also focusing on parallel imports in the coming months. "We have to double our efforts and sell as many cars as possible... If the smaller dealerships close down, we may even be able to maintain or even increase our market share," he said.

The Singapore Vehicle Traders Association (SVTA) said it is still in talks with authorities about easing loan restrictions for used cars.

Mr Raymond Tang, its secretary, said it is also looking beyond Singapore, in places such as Thailand or Japan, to source for more used cars. The association wants authorities to waive the $10,000 surcharge to import used cars. "It may still be too early to gauge what happens, but we expect the ride will be quite bumpy," Mr Tang said.

Nearly three quarters of the used cars that could be sold with full loans had been snapped up by the end of the Government's 60-day loan reprieve yesterday. From now on, anyone buying a used car will not be able to take a loan of more than 60 percent of its purchase price. The tenure must also be no more than five years.

A Land Transport Authority (LTA) spokesman said about 5,200 of the 7,000 used cars that dealers had acquired before the loan restrictions kicked in had been sold as of yesterday.

This tally may go up as it takes a few days to finalise sales documents.

Apex Trading Managing Director Thomas Lim said that while he is happy to have sold the 20 cars in his fleet in the last two months, he is projecting business to slow or plunge.

His business has already fallen by 40 percent in the last month because he does not have enough cars to sell. "No one is interested in selling their old cars as they can't afford to replace them," he said.

As Mr Lim rides out the downturn, he is looking to cut the monthly $60,000 overheads cost for rental, utilities and salaries at his Turf City dealership.

Bigger dealerships, however, are hunkering down and looking to restructure their business.

Mr Eddie Loo, managing director of CarTimes, is leasing out his fleet and also focusing on parallel imports in the coming months. "We have to double our efforts and sell as many cars as possible... If the smaller dealerships close down, we may even be able to maintain or even increase our market share," he said.

The Singapore Vehicle Traders Association (SVTA) said it is still in talks with authorities about easing loan restrictions for used cars.

Mr Raymond Tang, its secretary, said it is also looking beyond Singapore, in places such as Thailand or Japan, to source for more used cars. The association wants authorities to waive the $10,000 surcharge to import used cars. "It may still be too early to gauge what happens, but we expect the ride will be quite bumpy," Mr Tang said.