On May 26th 2016, the Monetary Authority of Singapore (MAS), unprecedentedly, announced the easing of car loan guidelines. Getting excited? We did too! So let us, explain to you what it means:
The guideline changes were made a mere 3 years after the introduction of the guidelines themselves. These changes were attributed to the cooling of the market for cars and thus reducing inflationary pressures.
For cars with an open market value (OMV) of $20,000 and below, you can borrow up to 70% of the purchase price, while previously they could only borrow 60%.
While you could only borrow 50% previously for cars with an OMV of above $20,000, now you can borrow up to 60% of the purchase price.
On top of that, the loan tenure, which was previously only for 5 years, has now been increased to 7 years, which means lower monthly instalments for you on your car!
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But don’t get too excited! Industry experts did not expect the guideline changes to impact COE premiums, but it posted double-digit increases on 8th June 2016. The COE premium for cars up to 1,600cc increased to $53,694 and for cars above 1,600cc, to $56000, which are both a 6 month-high. Premium for open COE climbed to a 5-month high of $55,100.
Don’t be too put off by the increase in COE premiums though. The easing of car loan guidelines should still mean you could get your dream car at a more affordable rate.
Written by: Merryl