Get tough on those bypassing car loan curbs

The report on some people's blatant disregard for the law when it comes to vehicle loans is shocking ("Lenders bypassing car loan curbs"; Sept 23).

With effect from April 6, 2013, motor vehicle loans were reduced to 60 per cent of the purchase price, with a repayment period of up to five years.

The loan curbs are applicable to banks, finance companies and non-Monetary Authority of Singapore regulated financial entities, which include credit/leasing companies.

So, how come outright breaches of these curbs occur? 

Undoubtedly, this has put pressure on the demand for certificates of entitlement (COEs) - in spite of the significant supply of new COEs this year - and has led to COE prices remaining high.

If enforcement of the loan curbs is not rigorously exercised, it makes a mockery of the law.

With the economic outlook remaining grim, and with challenging employment prospects and rising interest rates, the last thing our country wants is to see its citizens saddled with more debts for consumer luxuries, such as cars, which they cannot afford.

I urge the authorities to step up vigilance and enforcement of the 2013 regulations on vehicle loans.

This would make for a more level playing field for bona fide consumers and car sellers.

Raymond Koh Bock Swi

A version of this article appeared in the print edition of The Straits Times on October 22, 2015, with the headline 'Get tough on those bypassing car loan curbs'. Print Edition | Subscribe