Restrictions on used-car loans lifted for 60 days

The Monetary Authority of Singapore (MAS) will lift the current restrictions on car loans for a period of 60 days for the purchase of used cars that were part of car dealers' inventory before the restrictions were introduced on Feb 25.

As dealers have up to seven days to register used cars under the Land Transport Authority's Temporary Transfer Scheme (TTS), used cars registered as of 4 March 2013 will be eligible for this concession.

MAS said in a statement that it had also earlier indicated that the scope of the financing restrictions will be extended to all entities that finance car purchases, including those that are not regulated by MAS. This will now come into effect.

The Ministry of Trade and Industry on Friday issued new regulations pursuant to the Hire Purchase Act to ensure that MAS' financing restrictions on the purchase of cars apply to these non-MAS regulated entities as well. The Ministry of Law has also on Friday required licensed moneylenders to comply with MAS' financing restrictions.

The lifting of the financing restrictions on purchases of used cars under the TTS as of March 4 takes into account the distinct conditions in the used car market currently. The inventory of used cars acquired by dealers at relatively high inbuilt 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. Demand has also fallen more sharply in the used car market compared to that for new cars.