PHV Bank Loan Help for my Dad!

[Atrecord]

MAS is just a regulator, They don't give out loans, they only tell you (the banks) "oi you all cannot charge above 5% ah, if not i come find you lim kopi"

 

Bank is different, You want loan ? can. all the T&C come out liao. As long they don't breach MAS regulations.

 

Yup, understand this.

 

But TS said the agent said got difference in interest rate betw normal car vs PHV.

 

I was thinking can check with MAS on whether there is any guidelines by MAS to say (whether banks) can or cannot do this.

[cmcex]

But the so called risk should be at the insurer side rather than the banks.

 

This has nothing to do with liquidity or your ability to service the loan.

 

Insurance simple, either you bang pay or you bang cannot pay, nothing affects them much

 

Finance side, too much wear and tear, car break down cannot afford to repair therefore the car let it rot and wait for repo, when finance repo back, car condition is too bad for auction. Not saying PERSONAL USE wont have this issue but lesser chance for personal use.

[cmcex]

Previously need to register company and take the loan under the company name. Now no need. So the agent actually did not keep herself updated on this.

 

This is previously.. Now no need already.. Just convert to z10 and change to commerical insurance can already.

 

yes and no

 

1. now no need company name to do PHV, but whether existing financier allows the vehicle to be used for PHV, of cos if no finance obligation then just change insurance will do

 

2. if car has finance obligation, make sure financier knows and agrees to the Z10/Z11 conversion, else do not convert anyhow, when financier finds out can deem you loan null and void and whole sum becomes due and payable immediately 

 

My 2 cents :)

[Yewheng]

yes and no

 

1. now no need company name to do PHV, but whether existing financier allows the vehicle to be used for PHV, of cos if no finance obligation then just change insurance will do

 

2. if car has finance obligation, make sure financier knows and agrees to the Z10/Z11 conversion, else do not convert anyhow, when financier finds out can deem you loan null and void and whole sum becomes due and payable immediately

 

My 2 cents :)

Oh thanks.. Didn't know about this..

[Wildfaye29]

sorry to ask,  is this the most accurate info with regards to convert a car to PHV?

 

actually i dont know the loan part - car loan or HP loan

 

i buy the car full cash one - no loan

 

so guys who need to loan may need to chk further on the finance part - pls keep us posted

[Verve]

Thanks all for the advice.

 

I feel that the agent is honest because she is willing to give up the sales if I insist on the 2.4% interest rate.

 

But I am asking because I feel that she may be misinform. Because I called up Grab as well and they themselves is unsure of the circumstances, what more an agent.

In any case, I called up the AD and spoke to another agent who gave me the same reply.

 

So Im assuming either the top management is misinform and hence the whole AD.

Or the bank is indeed setting such a term.

The polarising outcome can have dire consequences.

 

In any case, a LTA officer just called me back and confirm that there is NO NEED to take a loan with the higher interest rate because of the new regulation where PHV can be the direct owner of the vehicle. I am requesting an email reply from them just to cover myself.

 

Ive also inform the Sales Agent but she have once again refuted what I say and say that it is per the Bank's terms. Which again put me in a spot.

 

As for bros who advice me to get my Dad to drive a rental car first or buy 2nd hand, thanks alot for the kind advice.

He have been driving for a few years now and Ive been helping to finance his car but having to change the car every year is time consuming and some of them break down every now and then which convert to income loss.

 

Especially thanks to @Wildfaye29 for the clear direction. :)

Feel for u to trust her.

 

You are going to be disappointed

 

Reality is that the profit margin for your sale may not be in the car but in the interest for the loan

 

Go take a calculator and work out 1% flat a year is how much.

 

If she sells you the car without the higher interest loan then she basically makes almost nothing

 

Don’t shake hands and walk away find someone who is transparent with you.

 

End of the day your dad is going to pay blood sweat and tears to clock those ride miles just to pay for the additional interest

[Zxcvb]

actually i dont know the loan part - car loan or HP loan

 

i buy the car full cash one - no loan

 

so guys who need to loan may need to chk further on the finance part - pls keep us posted

 

MCF standard of buying car = FULL CASH!!!!

 

No wonder no AD nor PI like to entertain us. 

[Vratenza]

And recently got enlightened......buying second hand cars full cash from " Consignment" dealers also a no no.

 

What ever you want to offer, despite it being in the seller's favour, your offer will get blocked at the dealer side simply because you are not taking any loan.

 

So those looking to sell their cars, please, don't ever put it up for consignment.

 

MCF standard of buying car = FULL CASH!!!!

 

No wonder no AD nor PI like to entertain us. 

 

[Jusnel]

Just to contribute to my story.

 

 

My car was financed by Maybank. I called up them and check with them whether can i convert my car (private owned) to Z10 (Private Hire). They staff told me it is not possible and told me to either full settle or refinance the car loan with third party finance company.

 

I told them as per Lta system, we can anytime convert to Z10 thru one motoring website without any issue. The bank staff told me, if you converted your car to Z10, the system will will notify the bank and the bank will do what the necessary but they did not specify what they would do.

 

I called up few finance company and the interest to refinance the loan is 3.5% to 4.28 %. But some company will need to get the car transfer to them or transfer to your own company which incur transfer count +1 which might affect your resales price in the future. Hence I just full settle the loan and waiting for my car insurance to expire before i convert to PHV.

Yes, your story speaks the truth

 

From my understanding also, that if drive PHV, converting from private car, the car owner needs to pay up the loan or refinance.

 

Think of it. The car loan is hire purchase. The bank owns the car and dictates the terms of the loan.

 

Normal personal use and commercial use is different.

 

To TS, what yr car agent said is true. There will be higher interest for PHV car.

[dnumde]

Hi all.

Thanks alot for all the advice.

I have been reading up on the guidance given and doing some research on my own.

 

So apparently, LTA have confirm that there is NO such regulation.

Called up multiple agent from different dealer and they all gave they same statement as my Agent which disagrees with LTA's statement.

Called up the CSO of UOB, they say that my Dad CAN drive for PH and pay for the 2.48% interest rate under personal loan as long as the vehicle remains under my Dad's name instead of under a registered business.

Request to speak to a Banker and he advise otherwise saying that this is not possible, relaying the same message as my agent.

 

To surmise, everyone say it's fine with the personal loan BUT the bank and agents (who got the information from the bank) disagree.

 

But after reading up on all the comments on the forum, I have to agree that LTA does not have much say in this matter as they are not the one dispersing the loan.

I suppose their "We allow personal loan vehicle to convert to Private Hire" simply implies that "they do not have a say in this matter".

And I suppose the onus is up to the bank which is the one dispersing the loan.

Hence, I went to take the loan contract from my Agent and read up on the terms.

I'm just a layman. But base on what I read, there is strictly NO TERMS saying that the vehicle cannot be converted to private hire.

But like all big organisation's contract, the clauses are always phrased in such a grey area to cover themselves.

Although there is no terms stating explicitly that we cannot use it for private hire, but base on my layman understanding, the clauses can be twisted to such a way that I cannot alter the vehicle in any way without the bank's consent and knowledge. Otherwise, I will will have to repay the loan in full.

 

Afterwhich, I thought to take the personal finance first. Thereafter if I cannot convert it to PH, I will refinance it to private hire loan.

But there are 3 possible scenerio.

One being the bank will exercise it's rights and terminate the loan and request I repay the loan with interest in full.

Two being UOB may grant me a loan with interest rate much higher than the one being offered currently offered by the AD.

Three being a third party creditor will help me refinance the loan. But that will come at a heavy price of 0.5% charges on the current outstanding loan, a revised interest rate to 4% on the new loan amount and a $350 admin fee.

The above scenerios were suggested by UOB Banker, different AD sales rep and the third party financial institution which I contacted.

 

Therefore, to save all the hassle and risk involve, I have no choice but to take up the commercial loan, and increase the downpayment to offset the higher interest charges involve.

 

Once again, thanks alot of all the guidance.

I hope this discussion can help fellow Singaporean to have a better sense on what is happening on the ground.

 

My personal thoughts is that the bank has every right to do so.

But having such rights doesnt imply it is is morally right.

But again business is business.

At the end of the day, it is fellow retirees like my Dad who end up being a sucker.

 

Whether or not my Dad should drive PH or buy the car is a discussion for another day. :)

[Galantspeedz]

just send an email to UOB and keep it as evidence in the case of a dispute lor

[Mockngbrd]

And recently got enlightened......buying second hand cars full cash from " Consignment" dealers also a no no.

 

What ever you want to offer, despite it being in the seller's favour, your offer will get blocked at the dealer side simply because you are not taking any loan.

 

So those looking to sell their cars, please, don't ever put it up for consignment.

Nowadays got sgcarmart, no need for consignment unless you just don't care about your selling price and want to let other ppl do all the work.

[Mkl22]

Nowadays got sgcarmart, no need for consignment unless you just don't care about your selling price and want to let other ppl do all the work.

 

or let others use your car as the lunch transport.

[Adrianli]

Why not just buy a 8 year old car and take as little loan to do PHV?

[Kusje]

Why not just buy a 8 year old car and take as little loan to do PHV?

 

old car.... drive already lose face 

[Yymail22]

I am looking for my next ride (resale) because current car due for COE-expiry.

 

In the midst of it, I found the higher interest rate when cars for converted to Z10 use, as what this thread was all about.

 

HL Finance offers loan for Z10 use but they will only deal direct with car dealers. Maybank and of course DBS don't offer. Have not heard from UOB but I think they go through dealers too.

 

While I continue to search for other sources, I thought I ask herein does anyone know which banks provide loan to car owners directly?

 

Thanks for your input.

[Soya]

And recently got enlightened......buying second hand cars full cash from " Consignment" dealers also a no no.

 

What ever you want to offer, despite it being in the seller's favour, your offer will get blocked at the dealer side simply because you are not taking any loan.

 

So those looking to sell their cars, please, don't ever put it up for consignment.

 

 

Agreed. Tried consignment twice. Really a waste of time. Bad experience as a seller. What u described was probably the reason why those cars I put on consignment didn't receive any offers despite setting a reasonable reserve price.

[kschan]

The agent is not lying.  Because Z10 is a money earning tool, interest rate will be higher.

 

1) If z10 and private vehicle gets the same interest, then what is the benefit of being a private vehicle? u see all phv vehicles instead?

2) The time spent on the road is a lot more, naturally the risk is higher and increases a lot, and bank won't offer the same type of interest rate.

3) even your car insurance for z10 is a lot more expensive.