Voodooman Supersonic February 1, 2013 Share February 1, 2013 (edited) Will there be some panic buying? First cooling measure is usually not very effective, we need at least 7 or 8. CM 1, 70% financing for max 7 years tenure, CM 2, pay as you bid, CM 3, restriction on bidding by dealers, CM 4, cash for COE, CM 5, cash for clunkers, CM 6, 5 more COE per month, CM 7, $50 per ERP gantry, Akan datang.... PUBLISHED FEBRUARY 02, 2013 Loan curbs to slam brakes on car demand? Authorities said to be looking at doing away with 100% loans; may also cut repayment period BY SAMUEL EE SPECULATION is rife in the motor industry that the government may re-introduce restrictions on vehicle financing to cool strong demand for cars amid surging COE premiums. The talk has been circulating since late last year but grew stronger this month when the authorities apparently asked some banks to submit their loan data. "I'm told they want to look at the debt portfolio for not only vehicles but property too because the same people may be taking both types of loans," said the general manager of a mid-sized dealership. "I suppose I can understand the rationale because it makes no sense to limit property loans, and then allow someone to borrow money for a car, which is also a big-ticket item." Earlier speculation had centred on whether the government may be planning to limit car loans to 80 per cent of the purchase price with a loan repayment period of not more than eight years. If these conditions are introduced, it would mean a return to an earlier period when COE premiums were equally high and the 70 per cent and seven years rule was imposed in 1995. This condition was dropped in 2003, when the Monetary Authority of Singapore liberalised the industry and financial institutions began offering 100 per cent loans with 10-year repayment periods. "Our salespeople were informed by some bank representatives that such 'cooling measures' may be in the pipeline but so far, they have not heard anything about their implementation," said the general manager. He added that for the last couple of months, one new criterion for an auto loan has been proof of income. "Nowadays, documents like income tax returns have to be submitted with the loan application. Previously, only a declaration of income or a letter from the employer was required," he explained. But some motor distributors see the benefit of such tightening. "Theoretically, a 100 per cent loan doesn't make sense because once you drive the car out the showroom, its value has already depreciated. It is prudent to limit the loan amount so that buyers are not overstretched," said the sales manager of a Japanese dealership. But even if such measures are enforced, they may not necessarily benefit the ordinary car buyer eyeing a mainstream model, according to the head of a luxury franchise, who reiterated that the root problem remains the small size of the COE quota. "When COE premiums are very high, most of the buyers are wealthy and cash-rich. If you limit the loan amount, demand may soften slightly and premiums don't fall that much," he said. "So cars will still be expensive for the less wealthy who now find it harder to get a loan, but they will become cheaper for the rich." There are no industry statistics but going by anecdotal evidence, at least 70 to 80 per cent of car buyers take some form of financing. More interestingly, it appears that those who buy bigger and more expensive models seek less financing than those who buy entry-level alternatives. The head of the luxury dealership said: "Whether COE is high or low, smaller car buyers take bigger loans." Edited February 1, 2013 by Voodooman ↡ Advertisement Link to post Share on other sites More sharing options...
Rubbishman 1st Gear February 2, 2013 Share February 2, 2013 Will there be some panic buying? First cooling measure is usually not very effective, we need at least 7 or 8. Cooling measures for COE is definitely welcome! But i hope its not something similar to the housing Additional Buyer's and Seller's Stamp duty. Link to post Share on other sites More sharing options...
Forte3737 5th Gear February 2, 2013 Share February 2, 2013 Maybe can consider imposing additonal 10% premium for PR buyers? Link to post Share on other sites More sharing options...
Canarywharfgooner 1st Gear February 2, 2013 Share February 2, 2013 The measure depends on the intention. Is the reason for high COE due to cheap/max loans or overwhelming demand. We have seen from the last few CM for property that tightening the loan flow has not really curbed rising prices. Consumers may be taking max loans cos its cheaper and the alternative use of their cash can be better utilised elsewhere. If supply remains largely the same ie limited, having a similar LTV approach for cars may not bring about the desired effects in driving COE prices lower. Link to post Share on other sites More sharing options...
BluBlur 1st Gear February 2, 2013 Share February 2, 2013 MOT should rework how they classify Cat A, B, etc. Definitely not by engine cc anymore. Rich people need little or no loan to buy their cars. Link to post Share on other sites More sharing options...
macrosszero Turbocharged February 2, 2013 Share February 2, 2013 MOT should rework how they classify Cat A, B, etc. Definitely not by engine cc anymore. Rich people need little or no loan to buy their cars. Rich people have more buying power so what's wrong with that? No matter what cooling measures are put in place - they will be able to buy their cars. If you cannot afford it, don't whine and bleat and demand to own a car... go public. A car is a luxury not an entitlement. Link to post Share on other sites More sharing options...
TheRationalVoice 1st Gear February 2, 2013 Share February 2, 2013 Rich people have more buying power so what's wrong with that? No matter what cooling measures are put in place - they will be able to buy their cars. If you cannot afford it, don't whine and bleat and demand to own a car... go public. A car is a luxury not an entitlement. Well said! Link to post Share on other sites More sharing options...
Simplecar 4th Gear February 2, 2013 Share February 2, 2013 Rich people have more buying power so what's wrong with that? No matter what cooling measures are put in place - they will be able to buy their cars. If you cannot afford it, don't whine and bleat and demand to own a car... go public. A car is a luxury not an entitlement. Hmm. LTA require us to bid for a COEntitlement. Kind of a joke from them. Link to post Share on other sites More sharing options...
Kspchew 2nd Gear February 2, 2013 Share February 2, 2013 Rich people have more buying power so what's wrong with that? No matter what cooling measures are put in place - they will be able to buy their cars. If you cannot afford it, don't whine and bleat and demand to own a car... go public. A car is a luxury not an entitlement. +1. to add, there are always 2nd hand car available. bottomline, Link to post Share on other sites More sharing options...
Chucky2007 Turbocharged February 2, 2013 Share February 2, 2013 Good news. I got friend's nephew who bought a 140k car and took 140k loan yet earn $3k a month... These 100% loan thingy are making the GenY poorer in the long run bec they are thinking only of current material comfort.. the parents are the screwed ones bec still have to help their children maintain their life style Link to post Share on other sites More sharing options...
Voodooman Supersonic February 2, 2013 Author Share February 2, 2013 (edited) Cooling measures for COE is definitely welcome! But i hope its not something similar to the housing Additional Buyer's and Seller's Stamp duty. More taxes and monies for national coffers? The premium should already be reflected in the COE prices, I would think next will be higher ERP as high COE of more than 100k may not be politically tenable in the long run as everyone now attributes it to Plan 69 (ever rising demand and inelastic supply). CM1 is probably to help the middle class by curtailing demand but I doubt it will work. To curtail financing further by lowering LTV may not be welcomed as well, I personally like it as I don't buy sofa on 7 years instalment plan as well. I think the middle class, especially those with kids, should be able to afford/own a car but due to good public transport network, opt to take the train/bus to work daily as it is cheaper and faster, like my friends in HK. We will see COE at more reasonable level then. Edited February 2, 2013 by Voodooman Link to post Share on other sites More sharing options...
Voodooman Supersonic February 2, 2013 Author Share February 2, 2013 Maybe can consider imposing additonal 10% premium for PR buyers? Cat F for FT? The last time I jokingly proposed this, about 2 years ago, I kanna whacked, you better watch out for Tiger Link to post Share on other sites More sharing options...
Wson 1st Gear February 2, 2013 Share February 2, 2013 Rich people have more buying power so what's wrong with that? No matter what cooling measures are put in place - they will be able to buy their cars. If you cannot afford it, don't whine and bleat and demand to own a car... go public. A car is a luxury not an entitlement. Cars r actually quite affordable for the masses, definitely not some hard to attain luxury item only meant for rich. But coe is a luxury item for the rich Link to post Share on other sites More sharing options...
Voodooman Supersonic February 2, 2013 Author Share February 2, 2013 Good news. I got friend's nephew who bought a 140k car and took 140k loan yet earn $3k a month... These 100% loan thingy are making the GenY poorer in the long run bec they are thinking only of current material comfort.. the parents are the screwed ones bec still have to help their children maintain their life style 3k can take 140k loan? Need guarantor? Link to post Share on other sites More sharing options...
Zniper 2nd Gear February 2, 2013 Share February 2, 2013 Good news. I got friend's nephew who bought a 140k car and took 140k loan yet earn $3k a month... These 100% loan thingy are making the GenY poorer in the long run bec they are thinking only of current material comfort.. the parents are the screwed ones bec still have to help their children maintain their life style siao lor... based on last time 1.88% interest... aft some calculations, ur fren's nephew needs to pay more dan 1/2 of his take home salary on his car installment alone... muz be out of his mind... Link to post Share on other sites More sharing options...
Treesmaker Clutched February 2, 2013 Share February 2, 2013 (edited) Well said, cannot afford a car, use public transport. Edited February 2, 2013 by Treesmaker Link to post Share on other sites More sharing options...
Enye Hypersonic February 3, 2013 Share February 3, 2013 "When COE premiums are very high, most of the buyers are wealthy and cash-rich. If you limit the loan amount, demand may soften slightly and premiums don't fall that much," he said. "So cars will still be expensive for the less wealthy who now find it harder to get a loan, but they will become cheaper for the rich." There are no industry statistics but going by anecdotal evidence, at least 70 to 80 per cent of car buyers take some form of financing. More interestingly, it appears that those who buy bigger and more expensive models seek less financing than those who buy entry-level alternatives. The head of the luxury dealership said: "Whether COE is high or low, smaller car buyers take bigger loans." the above sums it up best great to be elite in Singapore Link to post Share on other sites More sharing options...
Voodooman Supersonic February 3, 2013 Author Share February 3, 2013 the above sums it up best great to be elite in Singapore Great to be elite EVERYWHERE. ↡ Advertisement Link to post Share on other sites More sharing options...
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