Relief at last for second-hand car dealers.
The Monetary Authority of Singapore (MAS) will lift current restrictions on car loans for a period of 60 days for used cars that were part of car dealers’ inventory before the new curbs were introduced on 25 February.
As dealers have up to seven days to register used cars under the Land Transport Authority’s (LTA) Temporary Transfer Scheme (TTS), used cars registered as of 4 March will be eligible for this concession. MAS estimates this pool comprises less than 7,000 cars.
In a statement on Friday, MAS says the move takes into account the distinct conditions in the used car market currently.
It says that the inventory of used cars acquired by dealers at relatively high in-built Certificate of Entitlement (COE) values before the introduction of the financing restrictions has made it particularly challenging for them to adjust to the new market conditions.
MAS adds that demand has also fallen more sharply in the used car market compared to that for new cars and many second-hand car dealers have borne the brunt of the new rulings, particularly those who were holding on to a large supply of used cars when the new rules were announced.
The Ministry of Trade and Industry (MTI) also issued on Friday new regulations to ensure that MAS’ financing curbs on the purchase of cars apply to all entities that finance car purchases, including those that are not regulated by MAS.
MAS says it will continue to monitor developments in the car market COE premiums and will recalibrate the financing restrictions for new and used cars when appropriate.
The new car loan restrictions is expected to be hotly debated when Parliament convenes next Monday.