The current car loan restrictions will be lifted by the Monetary Authority of Singapore (MAS) for a period of 60 days for the purchase of used cars that were part of car dealers' inventory before the 26th February 2013. Used cars registered as of 4th March 2013 will also be eligible for this concession as dealers have up to seven days to register used cars under the LTA's Temporary Transfer Scheme (TTS).
The lifting of the financing restrictions under the TTS as of 4th March takes into account the distinct conditions in the used car market currently. The inventory of used cars acquired by dealers at relatively high in-built Certificate of Entitlement (COE) values has made it particularly challenging to adjust to the new market conditions. Demand has also fallen more sharply in the used car market compared to that for new cars.
Thus MAS has therefore decided to temporarily lift the restrictions for the limited pool of used cars - comprising less than 7,000 cars. This concession takes effect from 6th April 2013 and will be in place for a period of 60 days, after which, the financing restrictions will apply.
Also, the previously announced loan restrictions has been extended to all entities that finance car purchases - including those not regulated by MAS.
The Ministry of Trade and Industry has issued new regulations today, that are pursuant to the Hire Purchase Act to ensure the changes apply to non-MAS regulated entities, while the Ministry of Law has also requested licensed moneylenders to comply with MAS' financing restrictions from today.
MAS also announced it will continue to monitor developments in the car market and COE premiums, and will recalibrate the financing restrictions for new and used cars when appropriate.
