Lenders bypassing car loan curbs

[Damienic]

Its been more than a year now, and the loopholes still exist.

Why bother with implementing unless all loopholes are anticipated and stamped out.

 

Aiyoh...

 

which loophole?

[Voodooman]

 

which loophole?

 

Loophole plugged by MAS already.

 

Some companies offer in house loans higher than the 60% or 50% by over-declaring the price of the car, thus increasing the loan amount. But the increase isn't that much anyway.

 

 

It is happening everyday. MAS should really close the loophole as the selling price can suka suka whack one. Like the below example.

 

http://www.sgcarmart...o.php?ID=396076

 

Buyer probably found as asking price just went up from 180k to 248k for a 2 years old F10, PML is selling a brand new one with lots of freebies for around 230k, IIRC Additional loan of 34k secured, making it a circa 70% financing.

[sam138]

Hi Bros,

 

anyone of you got any car loans from Speed Credit Pte Ltd before ?

any review on this company ?

 

Thanks

[Blackyv]

Hi Bros,

 

anyone of you got any car loans from Speed Credit Pte Ltd before ?

any review on this company ?

 

Thanks

Sounds like a newly registered loan shark coy... Hehehe

[Wishxsr]

Its been more than a year now, and the loopholes still exist.

Why bother with implementing unless all loopholes are anticipated and stamped out.

 

Aiyoh...

 

 

But why u bother if there is still loop hole? Will this loop hole affect u?

[Throttle2]

 

 

But why u bother if there is still loop hole? Will this loop hole affect u?

Yes, becos it affects every tax paying person. Not to mentione every car owner in Singapore.

And we do not want policies implemented to be ineffective.

If so why waste time and money implementing it.

Edited May 31, 2014 by Throttle2

[Penknife]

those who go into high interest loan should jolly well know what they r getting into.

 

every economist will say that the future in uncertain. it's a matter of time the economic cycle takes a reset. as long as the reset is after the instalment cycle, they'll be fine

[Simpleonly]

Yes, becos it affects every tax paying person. Not to mentione every car owner in Singapore.

And we do not want policies implemented to be ineffective.

If so why waste time and money implementing it.

Agreed, waste all the resources and effort to implement this policy.

[Solar]

those who go into high interest loan should jolly well know what they r getting into.

 

every economist will say that the future in uncertain. it's a matter of time the economic cycle takes a reset. as long as the reset is after the instalment cycle, they'll be fine

On the car loan.. I thought rate is already fixed after the dotted line was signed?

The rate should not float like some housing loans.

But still.. One should minimise the loan he takes when he purchase the car to avoid paying the bank unnecessarily

[SuPerBoRed]

 

It is happening everyday. MAS should really close the loophole as the selling price can suka suka whack one. Like the below example.

 

Buyer probably found as asking price just went up from 180k to 248k for a 2 years old F10, PML is selling a brand new one with lots of freebies for around 230k, IIRC Additional loan of 34k secured, making it a circa 70% financing.

The said bank who issued the loan should then be censured for not doing due diligence...

No respect... Issue ruling don't put in effort to enforce.. Might as well don't talk so much

[Voodooman]

The said bank who issued the loan should then be censured for not doing due diligence...

No respect... Issue ruling don't put in effort to enforce.. Might as well don't talk so much

I,think probably financed by smaller finance ah long houses, they just want to make money. 70% financing and secured by a F10 bao jia one.

 

MAS wants to regulate, MAS better enforce it across the board.

[SuPerBoRed]

I,think probably financed by smaller finance ah long houses, they just want to make money. 70% financing and secured by a F10 bao jia one.

 

MAS wants to regulate, MAS better enforce it across the board.

Wa... If that's the case.. Instead of ensuring financial prudence.. They end up tok up a law the don't want to enforce to plunge those people they claim to want to help into even higher costs!!

 

Ingenious mas...

[Cyberian]

They are such an A.. hole. Maybe they can set example by taking public transport instead of driving.

[Enye]

I heard a BMW ad on the radio today

 

apparently we can buy a 520i at 0% downpayment from Performance motors

 

50% cash downpayment is an urban legend

 

Edited June 12, 2014 by Enye

[13177]

Lol, you believe the ad?

[Showster]

Looks wrong to me... Imagine lenders also bypass property curbs - what use are the curbs then?

What do you think?

Lenders bypassing car loan curbs

PUBLISHED

3 HOURS AGO

 

Buyers who cannot fork out down payment drawn to schemes that offer hefty financing

Christopher Tan

Senior Transport Correspondent

The motor industry has found ways to get around car loan curbs - a development that is keeping vehicle demand and certificate of entitlement prices buoyant.

 

Checks revealed that used car dealers, parallel importers and credit companies offer financing that is effectively 80 per cent to 90 per cent of a car's purchase price, with repayment of up to 10 years.

 

This exceeds the Monetary Authority of Singapore's (MAS) 2013 curb, which restricts loan quantums to not more than 60 per cent of the purchase price and a repayment period of up to five years.

 

The curb is breached by offering one or more of the following:

 

• Overtrade - a practice of offering a buyer substantially more for his trade-in vehicle. This is practised mostly by authorised agents.

 

• Disguised leases - in a lease agreement, the car is registered under the lessor's name, and the monthly rental is substantially higher than instalments in a hire-purchase. But dealers are readily offering "leases" that allow the car to be registered under the end-user's name and with relatively low monthly payments via a buyback offset.

 

• Invoice inflation - if a car costs $170,000, the seller will inflate it to, say, $270,000, so as to secure an 80 per cent loan from the bank.

 

• Balloon scheme - a seller subtracts the car's scrap value from the instalment calculation, resulting in lower monthly payments. At the fifth year, the consumer "scraps" the car to settle the outstanding amount, or refinances the car.

 

All the schemes come with higher interest rates, but consumers who cannot afford to fork out a hefty down payment under the MAS ruling have been snapping them up.

 

An MAS spokesman said: "As part of MAS' supervision of financial institutions (FIs), we check on their compliance with the rules. If an FI breaches the rules, MAS will not hesitate to take regulatory action."

 

The MAS, however, would not say if any lender has actually been taken to task for any of these schemes. It added that it expects lenders "to take reasonable steps to ascertain the veracity of the purchase prices of cars quoted in loan applications".

 

Mr Ron Lim, general manager of Nissan agent Tan Chong Motor, said the various schemes that bypass the loan curb show that "there is a lot of grey areas".

 

"We hope MAS can enforce it better," he added. "Then we can have a more level playing field."

 

A businessman who bought a used Bentley Flying Spur recently told The Straits Times that the invoice for the car - which was selling for $400,000 - was inflated to $700,000. Mr Y.Z. Liu, 66, said: "It was blatant cheating.

 

If the car was indeed $700,000, then the first owner should be compensated."

 

Mr Michael Lim, president of the Singapore Vehicle Traders Association, said the association of used car dealers and parallel importers has been appealing to the Finance Ministry for the loan limit to be raised.

 

He played down the high financing deals and said: "Most of these are rental and leasing packages."

 

However, classified ads in The Straits Times and car portal sgCarMart are rife with offers of "low down payment", "80 per cent loan" and repayment over 10 years.

 

One credit company, Century Tokyo Leasing, has been advertising a balloon scheme that promises a monthly instalment of about $800 for a Honda Vezel - nearly 40 per cent lower than the $1,250 required for a normal hire-purchase deal.

 

Mr Anthony Lim, a veteran car financier, said: "These companies are flush with foreign funds and they are eager to do business here. But... if a loan contract is in breach of the law, it is not binding. So the lender may have no recourse if the borrower decides to stop paying."

 

Edited September 23, 2015 by Seohster

[Forte3737]

That's why we are seeing more people buying new cars. Seems that the loophole very big

[Heman75]

a quote from the article:

 

"loopholes should be closed to ensure the loan restrictions get the desired results - a cooling of the car market."

 

so all the talk of prudence is sort of like bs ya?

 

sorry ah ot here.

 

I dont think LTA is stupid not to know the loop hole .. they just close one eye .. they need to do balance game ..