All quiet before used car loan reprieve ends

Fewer deals done after 'panic buying' on first weekend after extension

There were many more dealers than buyers yesterday at used car shops, as the final weekend before loan restrictions kick in ended with a whisper.

About 15 second-hand car dealers told The Straits Times that this was how it had been for several weeks, after the "panic buying" that came right after the Government's 60-day loan reprieve on certain used cars began on April 6.

"There was a frenzy the first weekend after the extension was announced," said Mr Jeremy Teo, 42, a car salesman at Henly Enterprises in Ubi. He said his dealership sold almost all of its 80 eligible used cars within two weeks.

The reprieve, which ends tomorrow, was granted by the Monetary Authority of Singapore after an outcry from used car dealers. It applied only to roughly 7,000 used cars acquired before the curbs kicked in on Feb 26.

The curbs limit loans for cars to no more than 60 per cent of the purchase price. Previously, car buyers could take 100 per cent loans and, in some cases, pay no down payment.

The repayment period was also cut from a maximum 10 years to five years.

The Land Transport Authority said that as of May 27, more than 4,800 used cars, or about 69 per cent of those affected, had been sold.

Mr Richard Lee, sales manager of Village Credit at Turf City, said: "The 20 eligible cars we had were all snapped up within a month by buyers worried that there would be no more supply."

When The Straits Times visited showrooms at Turf City and Ubi yesterday, the few cars that were eligible for full loans were highlighted with flashy signs.

But even then, there were few takers for these cars, which were mostly higher-end models such as the Lexus IS250.

Mr Deependra Singh, 39, who works in the shipping industry, was at Turf City yesterday in search of an affordable second-hand car. He said: "The cars left are too expensive, even considering the 100 per cent loans, while the smaller cars (which were subject to the curbs) now require a hefty down payment."

Mr Hamzah Bardan was at the Automobile Megamart in Ubi with his family of four in search of a second-hand Proton Gen-2.

The 51-year-old fumigator said that they made the decision to buy a used car only that week. But he did not manage to find one.

He said: "We don't want to pay more than $5,000 for the down payment and the new rules would make that impossible."

The Singapore Vehicle Traders Association is proposing that used car buyers be allowed to take an 80 per cent loan with a tenure of eight years. It is in talks with the authorities.