Singapore Extends Car Loan Curbs to Individual Private-Hire Car Buyers
Singapore authorities are extending motor vehicle financing restrictions to individuals who buy cars for private-hire use, closing a regulatory loophole that allowed some buyers to bypass standard borrowing caps, The Straits Times reported. Under the updated rules, individual private-hire car buyers face the same loan-to-value limits and repayment caps as regular car owners.
Stricter Borrowing Limits Reduce Vehicle Loan Caps
The revised financing curbs apply strict borrowing limits depending on a vehicle’s open market value, which is the base cost before taxes. For cars with an OMV of $20,000 or less, buyers can borrow up to 70 per cent of the purchase price, including relevant taxes and the Certificate of Entitlement. For vehicles with an OMV exceeding $20,000, the maximum loan is reduced to 60 per cent, according to government disclosures reported by AsiaOne. Financing tenures are capped at a maximum of seven years.
Surge in Self-Drive Registrations Prompts Regulatory Action
Government agencies intervened following a recent surge of approximately 500 individual-owned self-drive private-hire car registrations each month. Authorities noted that this trend suggested some buyers registered vehicles under commercial categories primarily to access more permissive financing terms rather than to operate ride-hailing services. Previously, vehicles registered as private-hire cars were exempted from standard loan curbs because they were designated for commercial use, allowing larger loans over extended periods.
Timeline and Exemptions for Commercial Fleets
The financing restrictions apply to loans issued by financial institutions and licensed or exempt moneylenders, as well as hire purchase and conditional sale agreements. The rules cover purchases where sales agreements are signed on or after Oct. 30, or where the COE is obtained on or after that date if no sales agreement exists. Commercial vehicles, motorcycles, and private-hire cars owned directly by businesses remain exempt from the tightened loan curbs.
Government Rejects Separate Certificate Category
The Government considered creating a separate COE category for private-hire and car-leasing companies but rejected the idea, Channel NewsAsia reported. The Land Transport Authority explained that a dedicated category would not increase overall COE supply and could drive up rental rates for drivers and fares for commuters. Meanwhile, data secured by The Straits Times indicates that household vehicle debt in Singapore reached roughly S$12.4 billion by late 2025, marking a 12-year peak.
Frequently Asked Questions About Singapore Loan Curbs
Do the new loan curbs affect existing private-hire car loans?
No. NTUC assistant secretary-general Yeo Wan Ling clarified that drivers with existing loans will not be affected by the policy update, according to reporting by The Business Times.
Are business-owned private-hire fleets subject to the new restrictions?
No. Commercial vehicles, motorcycles, and private-hire cars owned directly by corporate entities remain exempt from the financing restrictions.
What were the previous rules for individual private-hire car purchases?
Individual buyers registering vehicles as private-hire cars were previously exempted from standard motor vehicle financing restrictions because the vehicles were designated for commercial use, enabling larger loans and longer repayment periods.
How does the Open Market Value determine the loan cap?
Vehicles with an OMV of $20,000 or less are eligible for a maximum loan-to-value ratio of 70 per cent, while cars with an OMV above $20,000 are capped at a 60 per cent loan limit.
Related reading