The Monetary Authority of Singapore (MAS) is now increasing the amount of money you can borrow when purchasing a car. Car Loans for buyers of vehicles with an Open Market Value (OMV) of $20,000 or less will now be eligible for a loan of up to 70%, instead of the previous 60% of the car’s price. Buyers of Cars with an OMV of more than $20,000 will now be eligible for a loan of up to 60% instead of the previous 50% of the car’s price. In both cases, the maximum loan tenure will now be 7 years, raised from the previous level of 5 years.
MAS has introduced this following “moderation in Certificate of Entitlement (COE) premiums and in resulting inflationary pressures over the last three years.” The new rulings will take effect starting tomorrow (27th May 2016), Friday. Although car owners may rejoice at MAS’s ruling, COE prices are still relatively high, resting above $45,000. With COE for Cat A (Above 1600cc) cars going at $47,020 and Cat B (Above 1600cc) cars just under $50,000 at $49,156.
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The deputy managing director of MAS, Mr Ong Chong Tee, said: “In 2013, when we introduced the measures, our immediate aim was to help restrain escalating COE premiums and consequent inflationary pressures. Since then, demand conditions have moderated and it is timely to ease the measures. MAS will, however, continue to have the LTV and loan tenure framework in place for the long term to promote financial prudence and help support the promotion of a car-lite society.”