NEARLY three-quarters of the used cars that could be sold with full loans had been snapped up by the end of the Government's 60-day loan reprieve yesterday.
While most traders were relieved to have sold their remaining stock, they were also bracing themselves for a slump as they are struggling to buy used vehicles.
Many drivers are refusing to let go of their wheels after the drastic car loan curbs were imposed in February.
Buyers are holding off their purchases as they wait to see how the market fares.
A Land Transport Authority spokesman said about 5,200 of the 7,000 used cars that dealers had acquired before the loan restrictions kicked in had been sold as of yesterday.
This tally may go up as it takes a few days to finalise sales documents.
Dealers managed to move their stocks after the Monetary Authority of Singapore lifted loan curbs on these vehicles for 60 days in April after responding to repeated appeals from used-car dealers.
This reprieve ended yesterday. From now on, anyone buying a used car will not be able to take a loan of more than 60 per cent of its purchase price.
The tenure must also be no more than five years.
These rules - for both new and used cars - took effect on Feb 26.
Previously, buyers could borrow up to 100 per cent of the purchase price and repay the loan over 10 years.
Apex Trading managing director Thomas Lim said that while he is happy to have sold the 20 cars in his fleet in the last two months, he is projecting business to slow or plunge.
His business has already fallen by 40 per cent in the last month because he does not have enough cars to sell.
"No one is interested in selling their old cars as they can't afford to replace them," he said.
As he rides out the downturn, he is looking to cut the monthly $60,000 overheads cost for rental, utilities and salaries at his Turf City dealership.
Bigger dealerships, however, are hunkering down and looking to restructure their business.
Mr Eddie Loo, managing director of CarTimes, is leasing out his fleet and also focusing on parallel imports in the coming months.
"We have to double our efforts and sell as many cars as possible... If the smaller dealerships close down, we may even be able to maintain or even increase our market share," he said.
The Singapore Vehicle Traders Association said it is still in talks with authorities about easing loan restrictions for used cars.
Mr Raymond Tang, its secretary, said it is also looking beyond Singapore, in places such as Thailand or Japan, to source for more used cars. The association wants authorities to waive the $10,000 surcharge to import used cars.
He said: "It may still be too early to gauge what happens, but we expect the ride will be quite bumpy."
This story was first published in The Straits Times on June 5, 2013
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