By Terry Xu

Monetary Authority of Singapore (MAS) has announced that the car loan restriction will be lifted for purchase of second hand vehicles from today, 6th April till 4th June, 60 days from now. This means that interested car buyers of the second hand vehicles can purchase the vehicles with the previous loan arrangement prior to the implement of the loan restriction during this period of time.

The restriction on car loan was introduced in Feb 2013 to push down the growing COE prices back a few months ago, new car buyers from then onwards would have to finance the loan within a span of 5 years and come up with a downpayment of 40-50% for the vehicle (This excludes commerical vehicles).

This lift on the restriction is set to relieve the struggling pains by second hand dealers on the stock of cars piled in their shops with no buyers in sight, detered by the recent curbs in car loans introduced during the budget 2013.

Many second car dealers have voiced their predicament with the government and have had their stories covered extensively by local news agencies. MPs such as  Dr Lee Bee Wah had also conveyed this issue on behalf of the dealers in the parliament (source)

What the government is trying to achieve here is to basically give the second hand car dealers some breathing gap so as to get the existing cars off their hand while in the meantime,  give them time to think on whether or not they should pack up and close shop as the second hand dealers will eventually face the same situation 60 days later.

That saying, even though a 60 days allowance is now handed out for consumers to buy second hand vehicles without the loan restriction  , but there should be no mad rush to buy a second hand car unless there is a real need for transportation. Just like how you don’t need to buy two pots just because the price for two is 10% cheaper than buying two alone. Consumers should always buy what they need and not what seems to be a “bargain buy”.

And besides this lift of restriction applies only to the 7,000 over used vehicles registered under the Land Transport Authority’s Temporary Transfer Scheme (TTS) as of 4 March 2013.

Apart from the 60 days grace period given by the government, an adjustment has been made to the existing regulation on car loans to be extended to cover licensed moneylenders such as credit companies and other loan facilities.

Just over a month ago, while some were stumbled by the new measures right after it was introduced,  some glee in delight as private credit companies and in house credit loan were not subjected to the 40-50% down payment requirement. This would mean clients would have glady opt for a car loan from these loan facilities even though it had a higher interest rate than what the banks would offer so as to skip the downpayment portion of the car purchase. A loophole that was present at the time with the implemention of the loan restriction on merely bank loans.

While the new measure does effectively cover this aspect of the initial car loan curbing measures. But this poses a question to some members of the public. Did the government think through their policies in great depth before their introduction and implementation or is it a game of trial and error at the expenses of stake holders?

Earlier last month, in response to the complain that those who are disabled as well as their care givers and car dealers are severly affected by the new measures, the government had expressed that the new curbs on motor vehicle loans will not apply to those who are physically disabled as well as their caregivers for one car (link). Apart from that, car dealers were given an extension for owning used cars from nine months to a year. (link)

Even though Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam had reiterated that the restriction on loans were temporary, the government could have considered sitting down to speak with all stake holders first before implementing policies that would affect them to avoid ad-hoc amendments to policies passed in parliament and also reduce the disturbance in the “peaceful” life of normal citizens.

Perhaps in view of the out of control COE price, it might seem that desperate situation calls for desperate measures. But how good would a “temporary” measure be?

 

You May Also Like

Professor Tambyah’s candidacy to give SDP a boost

Professor Paul Anantharajah Tambyah is set to join the Singapore Democratic Party (SDP).…

Law Minister K Shanmugam says authorities will look into the investigation errors made in Parti Liyani’s case

Following the acquittal of former Indonesian domestic worker of Changi Airport Group…

印尼也失守! 总统佐科维亲自证实两起确诊病例

从武汉冠状病毒(COVID-19)爆发至今,一直都未传出有人感染的印尼,今日(2日)经该国总统佐科维亲自证实,该国出现首两起确诊病例。 根据《雅加达邮报》报导,两名当地人,64岁和31岁的印尼母女,曾与一名日本游客有近接触,该名日籍人士到过印尼,在上月27日,在马来西亚确诊。 佐科维表示,当局在得知有关日籍人士确诊后,便立即追踪曾与病患杰出人士,并证实有两人经测试对武汉冠病呈阳性反应。 不过,佐科维也表示,印尼方面有上百家医院都有具良好隔离标准的隔离病房,器材也符合国际标准。 而该国卫生部长普特兰托表示,有关妇女住在西爪哇的德波(Depok),目前已在雅加达的 Sulianti Saroso传染病医院接受治疗。 此前印尼一直未传出确诊病例,令各国人士质疑其检测程序,不过该国卫生部长还强调该国的病毒检测程序没有问题,国内没有确诊病例,都是“上苍的护佑”。

Tudung issue: SDP’s Damanhuri Abas urges govt to consider how hijab ban in public nursing sector contributes to loss of local talent

The ban on tudung for Muslim women working in uniformed sectors such…