MAS Imposes Financing Restrictions on Motor Vehicle Loans
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Red_Bean_Bun
Well-Known Member
Re: MAS Imposes Financing Restrictions on Motor Vehicle Loans
Bank math is the best.......
Bank math is the best.......
CMJJ;960360 said:
Re: MAS Imposes Financing Restrictions on Motor Vehicle Loans
What if the car companies "buy and lease" to the drivers. We are currently owning cars via the 10 year lease (COE). The car sales structure changes to reflect a different owner in trust with the new buyer servicing the loan in a different format ie borrowing. Rent from the car companies.
50% down payment required? No
5 year tenor? No
Cos I am not the one "owning" the car.
What if the car companies "buy and lease" to the drivers. We are currently owning cars via the 10 year lease (COE). The car sales structure changes to reflect a different owner in trust with the new buyer servicing the loan in a different format ie borrowing. Rent from the car companies.
50% down payment required? No
5 year tenor? No
Cos I am not the one "owning" the car.
yellowhandman
Well-Known Member
Re: MAS Imposes Financing Restrictions on Motor Vehicle Loans
Such a scheme is definitely workable, but would mean a major change in business model for car dealers. Can't be set up overnight.
Such a scheme is definitely workable, but would mean a major change in business model for car dealers. Can't be set up overnight.
yellowhandman
Well-Known Member
Re: MAS Imposes Financing Restrictions on Motor Vehicle Loans
Both. There's no doubt that car prices - including COE prices - will go down because all the measures introduced are aimed at reducing demand. But the question is whether, in practical terms, the lower prices really make cars more "affordable". The higher downpayments required will, as many have already pointed out here, will be a barrier to entry for the non-cashrich, although at the lower end of the market that effect may be lessened because 40% of a low price may still be "low enough" for them to afford the downpayment.
I think it may end up being a positive rationalisation of the market - the incentive will no longer be there to buy the biggest car you can afford, because the gap between 'cheap' and 'expensive' will be widened. And those who can afford multiple cars won't be interested in the 'cheap' cars. My main concern is that COE for below 1,600cc will still be competed for between people buying 'cheap' small cars and 'more expensive' luxury cars with smaller engines, so those COE prices may actually be less affected.
naan1974;960397 said:
Both. There's no doubt that car prices - including COE prices - will go down because all the measures introduced are aimed at reducing demand. But the question is whether, in practical terms, the lower prices really make cars more "affordable". The higher downpayments required will, as many have already pointed out here, will be a barrier to entry for the non-cashrich, although at the lower end of the market that effect may be lessened because 40% of a low price may still be "low enough" for them to afford the downpayment.
I think it may end up being a positive rationalisation of the market - the incentive will no longer be there to buy the biggest car you can afford, because the gap between 'cheap' and 'expensive' will be widened. And those who can afford multiple cars won't be interested in the 'cheap' cars. My main concern is that COE for below 1,600cc will still be competed for between people buying 'cheap' small cars and 'more expensive' luxury cars with smaller engines, so those COE prices may actually be less affected.
Re: MAS Imposes Financing Restrictions on Motor Vehicle Loans
I think car prices will drop significantly. Singaporeans are cash rich but the ones who are cash rich are usually the savy ones that would rather invest the 100k than pump into a depreciating assets. So I think this will reduce the number of ppl buying cars.. It's a tough bullet but its needed. I think the govt is foreseeing a bleak future, so they are forcing ppl to slow down... On the other hand I think cars more than 5 yrs will be in demand n those who bgt cars in the last 2-3 yrs will find it tough to sell.
I think car prices will drop significantly. Singaporeans are cash rich but the ones who are cash rich are usually the savy ones that would rather invest the 100k than pump into a depreciating assets. So I think this will reduce the number of ppl buying cars.. It's a tough bullet but its needed. I think the govt is foreseeing a bleak future, so they are forcing ppl to slow down... On the other hand I think cars more than 5 yrs will be in demand n those who bgt cars in the last 2-3 yrs will find it tough to sell.
yellowhandman
Well-Known Member
Re: MAS Imposes Financing Restrictions on Motor Vehicle Loans
Agreed. Our car market is irrational...people all buy the biggest car possible at a high price, but change cars after 3-5 years. It's wasteful and inefficient. Better that we pay less for cars and drive them for much longer.
diablo_728;960403 said:
Agreed. Our car market is irrational...people all buy the biggest car possible at a high price, but change cars after 3-5 years. It's wasteful and inefficient. Better that we pay less for cars and drive them for much longer.
Re: MAS Imposes Financing Restrictions on Motor Vehicle Loans
I know someone in late 20's who drives a car with 7-8k loan mthly, he earns abt 20-25 n is single. In today's context he wouldn't be able to afford that.
I know someone in late 20's who drives a car with 7-8k loan mthly, he earns abt 20-25 n is single. In today's context he wouldn't be able to afford that.
Re: MAS Imposes Financing Restrictions on Motor Vehicle Loans
De-leverage is not a bad thing.
Combine this measure with the complaints on congested roads and high COEs - what better measures than to curb leveraged-demand?
Knowing that car prices and/or COEs will be trading lower, it is a definite good news for those owners (or owners-to-be) with some cash savings. As with many policies, it does not kill ultra-rich with both the additional ARF or the 50% cash-upfront.
Do note that you can still afford a car even if you have only $50K cash for upfront payment, or $30K or $20K. Though it kills the dreams of many owning a continental car. But there is an easier access to cars, now that car prices dropped. In this aspect, many prospective buyers should be happy. Having cash means you are better off than before on lower prices. Not having enuff cash means you get to drive but have to content with a smaller badge. Prudence.
If you do not have any cash saving, government is sending the message that you should save up before committing.
Comparing this method against curbing COEs (supply side, sorry to those gurus who projected a $100K COE), I think these measures make sense.
So how is this bad if one should not have too much leverage to begin with?
De-leverage is not a bad thing.
Combine this measure with the complaints on congested roads and high COEs - what better measures than to curb leveraged-demand?
Knowing that car prices and/or COEs will be trading lower, it is a definite good news for those owners (or owners-to-be) with some cash savings. As with many policies, it does not kill ultra-rich with both the additional ARF or the 50% cash-upfront.
Do note that you can still afford a car even if you have only $50K cash for upfront payment, or $30K or $20K. Though it kills the dreams of many owning a continental car. But there is an easier access to cars, now that car prices dropped. In this aspect, many prospective buyers should be happy. Having cash means you are better off than before on lower prices. Not having enuff cash means you get to drive but have to content with a smaller badge. Prudence.
If you do not have any cash saving, government is sending the message that you should save up before committing.
Comparing this method against curbing COEs (supply side, sorry to those gurus who projected a $100K COE), I think these measures make sense.
So how is this bad if one should not have too much leverage to begin with?
silencer162
Well-Known Member
Re: MAS Imposes Financing Restrictions on Motor Vehicle Loans
Time to wait for the COE to drop and renew so I can drive for another 10 years... hahahah Huat ah!
Time to wait for the COE to drop and renew so I can drive for another 10 years... hahahah Huat ah!
wt_know
Well-Known Member
Re: MAS Imposes Financing Restrictions on Motor Vehicle Loans
if mazda3, altis and civic fall back to price range of $70K-ish
$35K down-payment is alright for many buyers?
kia forte and hyundai i45 will also be good choice
sushi and kimchi had been suffer in cold storage for sometime liao ... huat ah!!!
if mazda3, altis and civic fall back to price range of $70K-ish
$35K down-payment is alright for many buyers?
kia forte and hyundai i45 will also be good choice
sushi and kimchi had been suffer in cold storage for sometime liao ... huat ah!!!
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Re: MAS Imposes Financing Restrictions on Motor Vehicle Loans
Do bear in mind that leverage was one of the major reason why car ownership was so affordable.
~ Leverage in the form of low downpayment. It was akin to a call option with 5-10 times effective gearing.
~ Leverage in the form of a finance-able COE, perpetuated by the control in the hands of new car dealers.
Without curbing demand via TRUE affordability, there is no other way to stop the prices from spiralling up.
Do bear in mind that leverage was one of the major reason why car ownership was so affordable.
~ Leverage in the form of low downpayment. It was akin to a call option with 5-10 times effective gearing.
~ Leverage in the form of a finance-able COE, perpetuated by the control in the hands of new car dealers.
Without curbing demand via TRUE affordability, there is no other way to stop the prices from spiralling up.
