The updated regulations require individual buyers of private-hire cars to adhere to a maximum seven-year loan tenure, identical to rules governing private car buyers. Borrowing limits are now capped at 70 percent of the purchase price for vehicles with an open market value up to $20,000, and 60 percent for those exceeding that threshold. Government agencies opted for this targeted financing tightening after determining that establishing a separate certificate of entitlement category would raise operational costs for drivers and trigger higher ride fares for passengers.
Key points
Borrowers purchasing private-hire vehicles will now be restricted to a maximum loan tenur…: Borrowers purchasing private-hire vehicles will now be restricted to a maximum loan tenure of seven years to match private car buyers.
Regulators explicitly avoided creating a separate certificate of entitlement category to…: Regulators explicitly avoided creating a separate certificate of entitlement category to prevent raising rental rates for drivers and travel costs for commuters.
The policy change addresses a prior loophole where individuals leveraged commercial class…: The policy change addresses a prior loophole where individuals leveraged commercial classification exemptions to access larger vehicle loans over extended repayment periods.
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SINGAPORE - Car loan curbs will be extended to individuals who buy cars for private-hire from Oct 30, in a move to ensure such purchases cannot be used to circumvent financing restrictions.
This group of buyers will face the same curbs as other private car buyers, including a loan tenure of up to seven years.
For cars with an open market value (OMV) of $20,000 or less, buyers can borrow up to 70% of the purchase price. The maximum loan is reduced to 60% for cars with OMVs of more than $20,000.
The OMV is the base cost of the car before taxes.
In a joint release on Oct 29, the Ministry of Transport, Monetary Authority of Singapore, Ministry of Energy, Trade and Industry and Ministry of Law said there have been more instances of individuals registering private-hire cars with no intention of using them for ride-hailing services.
A recent surge of around 500 such registrations a month suggests that some may be doing so primarily to circumvent the loan restrictions, the authorities said.
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