Used-car dealers urge MAS to review loan curb

[Voodooman]

do not under estimate the pent up demand and increased of population

 

Heard from a friend in the industry they are seeing slowing demand due to the CM and all these "pent up" demand may taper off by late this year. Are showrooms quiet these days?

 

PUBLISHED AUGUST 24, 2013

First-time car buyers disappearing fast

After financing restrictions kicked in, not many can afford the hefty downpayment

BYSAMUEL EE

 

IT APPEARS the first-time car buyer is becoming a rare species in Singapore, saved from extinction only by wealthy parents - PHOTO: ST

Singapore

 

IT APPEARS the first-time car buyer is becoming a rare species in Singapore, saved from extinction only by wealthy parents.

 

According to some motor distributors here, the number of first-time buyers has dropped sharply from six months ago when the Monetary Authority of Singapore (MAS) introduced vehicle financing restrictions. Since Feb 25, a 40 per cent cash downpayment is required if the OMV or open market value of the car being bought is below $20,000, and 50 per cent if the OMV is above $20,000.

 

So if the average entry-level car costs $120,000, then the 40 per cent downpayment would come up to $48,000.

 

"If you are young and have just joined the workforce, it is unlikely that you have $50,000 in spare cash," said a Kia spokesman. As a result, the number of first-time buyers of the Korean brand is now "5 per cent or less, compared with 30-40 per cent six months ago".

 

"It has come down drastically because of the loan curbs," he said. "These days, our customers are mainly replacement car buyers or multiple-car owners."

 

When it was possible to borrow 100 per cent of the car price to be repaid over 10 years, a buyer could drive out the showroom in a new Kia for as little as $500, or what the monthly instalment amounted to.

 

Over at Mazda, it is the same story, with this particular segment of buyers slipping from 30 per cent half a year ago to less than 10 per cent today.

 

"Our buyers are mostly repeat customers; first-time buyers cannot afford the downpayment," said a source.

 

One interesting development, however, has been the jump in the number of customers paying the full amount in cash.

 

"Before the current MAS regulations, about 10-20 per cent paid in cash. After the MAS regulations, 40-50 per cent pay in cash!" His explanation? "Nowadays, only those who are cash-rich can buy cars."

 

But one observer noted that the trend is brand-specific - not all volume makes are experiencing a similar plunge in first-time buyers. This is because some budget brands were already hurt by rising certificate of entitlement (COE) premiums even before the loan curbs came into effect earlier this year. COE premiums began skyrocketing more than two years ago when the COE quota contracted sharply.

[Wt_know]

just these 3 groups of car buyers is more than enough to consume all the coe quota ...

 

Heard from a friend in the industry they are seeing slowing demand due to the CM and all these "pent up" demand may taper off by late this year. Are showrooms quiet these days?

 

PUBLISHED AUGUST 24, 2013

First-time car buyers disappearing fast

After financing restrictions kicked in, not many can afford the hefty downpayment

BYSAMUEL EE

 

IT APPEARS the first-time car buyer is becoming a rare species in Singapore, saved from extinction only by wealthy parents - PHOTO: ST

Singapore

 

IT APPEARS the first-time car buyer is becoming a rare species in Singapore, saved from extinction only by wealthy parents.

 

According to some motor distributors here, the number of first-time buyers has dropped sharply from six months ago when the Monetary Authority of Singapore (MAS) introduced vehicle financing restrictions. Since Feb 25, a 40 per cent cash downpayment is required if the OMV or open market value of the car being bought is below $20,000, and 50 per cent if the OMV is above $20,000.

 

So if the average entry-level car costs $120,000, then the 40 per cent downpayment would come up to $48,000.

 

"If you are young and have just joined the workforce, it is unlikely that you have $50,000 in spare cash," said a Kia spokesman. As a result, the number of first-time buyers of the Korean brand is now "5 per cent or less, compared with 30-40 per cent six months ago".

 

"It has come down drastically because of the loan curbs," he said. "These days, our customers are mainly replacement car buyers or multiple-car owners."

 

When it was possible to borrow 100 per cent of the car price to be repaid over 10 years, a buyer could drive out the showroom in a new Kia for as little as $500, or what the monthly instalment amounted to.

 

Over at Mazda, it is the same story, with this particular segment of buyers slipping from 30 per cent half a year ago to less than 10 per cent today.

 

"Our buyers are mostly repeat customers; first-time buyers cannot afford the downpayment," said a source.

 

One interesting development, however, has been the jump in the number of customers paying the full amount in cash.

 

"Before the current MAS regulations, about 10-20 per cent paid in cash. After the MAS regulations, 40-50 per cent pay in cash!" His explanation? "Nowadays, only those who are cash-rich can buy cars."

 

But one observer noted that the trend is brand-specific - not all volume makes are experiencing a similar plunge in first-time buyers. This is because some budget brands were already hurt by rising certificate of entitlement (COE) premiums even before the loan curbs came into effect earlier this year. COE premiums began skyrocketing more than two years ago when the COE quota contracted sharply.

 

[Throttle2]

full cash

full cash

full cash

muayhhahahahahahahha

 

yeah

[Voodooman]

just these 3 groups of car buyers is more than enough to consume all the coe quota ...

 

All COE will be taken, of course, it is just a matter of price.

[13177]

You should reread my first post. I am not expecting population to double or to grow by double digits (if Pinky is to be taken seriously), COE quota will however increased considerably from current low base... It won't crash but it should weaken if supply is increased by say, 2 folds (it is supposed to grow 4x based on deregistration numbers). So I am betting it will drop by 2015 in time for GE2016. LOL... I might be wrong but I based my forecast on available data point and realpolitik.

If Coe will to drop in 2015, don't know whether it is due to high number of cars deregistered or near GE2016? But the last GE, there is no drop in coe.

Edited August 24, 2013 by 13177

[Kangadrool]

If Coe will to drop in 2015, don't know whether it is due to high number of cars deregistered or near GE2016? But the last GE, there is no drop in coe.

 

The last straw they will do is, to implement only car buyer bid for COE, no dealers allowed. But then, rules will again be relaxed after the big event.

[Forte3737]

YES

 

 

and pretty cheap too

.....

 

well,we all know that your watches are quite cheap

[Ronleo]

YES

 

 

and pretty cheap too

.....

 

Yeah... I went to the Sanrio shop at Parkway parade and they say they

dun carry this hello kitty model...

 

Pls get a better imitation in future!!!