MAS Imposes Financing Restrictions on Motor Vehicle Loans

[Icebrush79]

I like your analysis. Very clear.

 

We have to wait at least another 2 rounds because there's backlogs to clear. COE will remain high this month, or at least in the next bidding.

 

My thoughts are summarized here: http://www.tzlee.com/blog/?p=1681

 

Quote:

 

Here

[Versatile]

Dun even have 10K..... serious??? OMG how can that be???

 

You mean so many ppl overspend beyond their means huh?? so scary

 

This is the latest trend. Younger generation are overspending by using credits instead of debit.

 

If you noticed, many shoppers including car buyers are opting for zero dollar drive away instead of putting down payment for early break even.

 

IMO, the new regulation is good and bad. Good thing is it stabilize the current car pricing market and the COE and the bad point is for middle income earners who wished to own a car will have difficultly now. Talking about producing babies but without a car, i guess they wouldn't want to squeeze in the MRT during peak.

[I-love-xl]

6. I like it that unproductive used-car dealers who add no value will be forced to liquidate.

 

like this sentence.

[Detach8]

Basically the government is telling you... COE $20K is not for you to go and buy Ferrari.

 

And the government is also telling you, if your bank got only $5-10K don't go and buy a car.

 

Which I think is totally correct.

[SGCMniceguy]

If you got the money,NO ISSUE! All these are just a way to stop middle class and below from buying car. I believe only those can afford car the next few years will be super rich family. Good government with greater intervention to ease the traffic on the road. Bravo!

[Relagsingh]

like this sentence.

 

unproductive, useless, and BS car salesmen with these dealers should burn in hell too.

[Nzy]

This just means a car is a luxury in Sg. No money then don't buy.

[Felipe]

In short, i admit we don't have the best policymakers. But what to do? When only one party talks, things can only get worse.

[Taipan49]

Wonder how many people are going to take up cycling commuting due to the costs of getting a car and the perpetually crowded public transport? There are some areas in Singapore where it is relatively safe. One is using the East Coast Park and then Marina Barrage to the CBD. For my 20km trip only 4km is on roads with traffic, and that traffic is either jammed up (Fort Rd to Tanjong Rhu/Dunman High area) so I just ride past heaps of cars moving nowhere, or very light due to traffic light timings (Marina South to Shenton Way).

[Felipe]

If you got the money,NO ISSUE! All these are just a way to stop middle class and below from buying car. I believe only those can afford car the next few years will be super rich family. Good government with greater intervention to ease the traffic on the road. Bravo!

Good govt? This could have been prevented years ago. They shd not hve lifted the 7 yr loan then

[Detach8]

You need to fully understand the concept of return, which incorporate risks.

 

While they may give you a dividend return of x%, you need to understand that equity prices risk capital depreciation. When the market tanks tomorrow like what happen in 09, a blue chip will then give you a dividend as a proportion of the prevailing price. Also your capital gain will be -30% that will take a long time to breakeven.

 

Agreed, I just posted this on my blog too.

 

Quote:

I

Edited February 26, 2013 by Detach8

[Icebrush79]

This is the latest trend. Younger generation are overspending by using credits instead of debit.

 

If you noticed, many shoppers including car buyers are opting for zero dollar drive away instead of putting down payment for early break even.

 

IMO, the new regulation is good and bad. Good thing is it stabilize the current car pricing market and the COE and the bad point is for middle income earners who wished to own a car will have difficultly now. Talking about producing babies but without a car, i guess they wouldn't want to squeeze in the MRT during peak.

 

I feel the younger generation doesn't really value the virtues of being frugal. That's the result of parents being overly protective and excessive pampering.

 

Many of this young prince and princesses are not even from a rich family, most stay in HDB flats, comes from at most middle income families but they love going out to society painting an aura of success around them.

 

Many have the impression of being high-class boils down to their ability to appreciate "fine arts", western films, music and well... food.

 

Its true that money cannot buy class, but class differs from "self delusional" class and in this case, doesn't buy them status.

 

Time for the younger generation to wake up....

Edited February 26, 2013 by Icebrush79

[FocusWagon]

I do not buy this. My view is that MAS is failing to admit the mistake it made some 10 years ago when it liberalised the car credit market. It was a mistake because the liberalization engendered a plethora of problems. This new policy is really a correcting factor. To throw blame on to buyers is really a poor attempt at pulling wool over our eyes.

 

Do u really think singaporeans can only survive in a nanny state? If simple thing like this need garmen to control, then seriously all the complains from foreign bosses that singaporeans cannot tink appear to be true. Dun flame me, i also born and bred sinkie who done ns. But sometimes look at singaporean, i really shake head.

[FocusWagon]

Do you mind if I ask why are you so excited in putting down so much down payment for a car? Other than it looking satki and garnering you bragging rights in MCF, do you not have any investments that can yield more than 2% at all assuming car loan interest rate is at 1.88%?

 

Sacrificing so much cash on a depreciating asset makes no sense to me at all. And I wonder how do those scholars came up with the magical 50% maximum loan amount. I know optimal debt equity ratio is 50% but I did not know they take it literally for a DEPRECIATING asset that makes zero return.

 

Sorry car loan at 1.88 is actually effective int rate of 3.6.

[Icedbs]

I feel the younger generation doesn't really value the virtues of being frugal. That's the result of parents being overly protective and excessive pampering.

 

Many of this young prince and princesses are not even from a rich family, most stay in HDB flats, comes from at most middle income families but they love going out to society painting an aura of success around them.

 

Many have the impression of being high-class boils down to their ability to appreciate "fine arts", western films, music and well... food.

 

Its true that money cannot buy class, but class differs from "self delusional" class and in this case, doesn't buy them status.

 

Time for the younger generation to wake up....

 

I just bought my first LCD TV ever, 1 month ago. Yes, I agree it is much sharper than my 20 years old CRT TV.

 

No wonder I am not from the young generation.

 

 

[Mockngbrd]

Western food nice la... the kopitiam one... sibeh shiok and high class at kopitiam

[Trol]

Their signal is clear:

 

"Dont get caught without a chair when music is stopped"

[FocusWagon]

The liberalization of auto loan and tenure in 2003 was due to extremely soft market after SARS. COE was at $1-$5000. It made no sense to keep the measure in place as the gov need to jump start the economy, especially the car market.

 

It's always easy to criticize on hindsight.

 

Agree. To jump start the mkt, plus also incr lta revenue. Hee hee.. But it is a fact that they reacted too late, could have stepped in earlier by one year or so. Possibly punggol east made them rethink.