Private hire car buyers face tighter loan limits

Commercial vehicles and motorcycles stay exempt as do vehicles owned by businesses.

Individuals buying private hire cars (PHCs) will be subject to the same motor vehicle financing restrictions as private car buyers from 30 October.

The changes were announced by the Monetary Authority of Singapore, the Ministry of Transport, the Ministry of Trade and Industry, and the Ministry of Law.

Individual buyers of vehicles with an open market value (OMV) of $20,000 or less can borrow up to 70% of the purchase price, including applicable taxes and the Certificate of Entitlement (COE), where applicable.

For vehicles with an OMV of more than $20,000, the maximum loan-to-value (LTV) ratio will be capped at 60%.

All motor vehicle financing arrangements will also be subject to a maximum tenure of seven years.

The restrictions will apply to individuals obtaining vehicle loans from financial institutions and licensed or exempt moneylenders, as well as those entering into hire purchase or conditional sale agreements.

They will cover individual-owned PHCs with sales agreements signed on or after 30 October. Where no sales agreement is signed, the rules will apply to vehicles with COEs obtained on or after that date.

Commercial vehicles, business-owned PHCs and motorcycles will remain exempt.

The groups said the changes aim to prevent individuals from using the PHC classification to circumvent financing restrictions imposed on private car buyers.

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