Ailing used car traders will get a temporary reprieve, as the Monetary Authority of Singapore (MAS) announced Friday that car loan curbs on used cars will be lifted for 60 days. This comes after the Singapore Vehicle Traders Association appealed against the restrictions, which it said was hurting the used car trade badly.
Mr Eugene Chng, managing director of Cosmos Automobiles, said: "Whether sixty days is long enough for us to clear our stock, we really wouldn't know. But any sort of help is good for now."
The MAS said used cars registered as on or before March 4 this year will be eligible for this temporary concession, which takes effect from April 6. This pool comprises less than 7,000 cars, it added.
Separately, the Government has also closed off loopholes that allowed car buyers circumvent the MAS loan curbs by turning to credit companies and moneylenders for financing.
The MAS had capped car loans at 50 or 60 per cent of a car's purchase price from Feb 26, and limited the loan tenure to five years. Dealers have up to seven days to register used cars under the Land Transport Authority's Temporary Transfer Scheme.
Explaining its decision to temporarily lift the loan curbs for used cars, the MAS said: "The inventory of used cars acquired by dealers at relatively high inbuilt Certificate of Entitlement 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."
It said this will help the industry adjust to the new conditions, and expects that much of the 7,000 cars can be cleared within the two-month period.