Government to study effect of car loan curbs over time before making any adjustments

The Government will have to study how the Certificate of Entitlement (COE) premiums adjust to recent car loan curbs over a period of time before it decides whether to make any changes.

Speaking in Parliament on Monday, Acting Minister for Culture, Community and Youth Lawrence Wong said this in Parliament on Monday in response to a question by Member of Parliament (Mountbatten) Lim Biow Chuan about the effect of the recent car loan curbs. Mr Wong noted that there is only a month's worth of data available since the restrictions were put in place on Feb 26.

"We will continue to monitor developments in the COE market and we will recalibrate our financing restrictions for all cars new and old in response to market conditions in particular if there is a sustained moderation in COE prices," he said.

He added that the temporary lifting of restrictions for some used cars would not be extended beyond the 60-day window, as the authorities believe that period is sufficient for used car traders to clear most of their current inventory. The Monetary Authority of Singapore's recent curbs limited car loans to 50 or 60 per cent of the purchase price, and capped the loan tenure to five years. Prior to that, car buyers could take loans of up to 100 per cent and over 10 years.