69% of used cars eligible for full loans sold

[Musicwhiz]

The new loan curbs are good to prevent people from over-leveraging and burdening themselves with hefty interest payments over long periods.

Channel News Asia
69% of used cars eligible for full loans sold
By Dylan Loh
POSTED: 02 Jun 2013 9:36 PM

URL: http://www.channelnewsasia.com/news/sing...95540.html

About 69 per cent of used cars eligible for full loans have been sold as of 27 May since authorities lifted borrowing limits for buying those cars for 60 days.

SINGAPORE: About 69 per cent of used cars eligible for full loans have been sold as of 27 May since authorities lifted borrowing limits for buying those cars for 60 days.

This concession will last till Tuesday.

Motor firms are bracing for uncertainty thereafter.

Dealers whom Channel NewsAsia spoke with expect the market to be even quieter, with car loan curbs in full force.

To help used car dealers clear old stock acquired before new borrowing restrictions were introduced, a two-month concession was given. This meant that buyers could continue taking up to 100 per cent loan for vehicle purchases.

The concession applied to some 7,000 used cars. Over 4,800 have been sold so far.

Classic Credit had around 180 vehicles from old stock. About 170 have been sold, but customers remain cautious.

Andy Ong, sales consultant at Classic Credit, said: "It all depends, you see, on the customer preference - what they want. Because mostly for used cars, they are going for those budget cars. Talking about high-end, they should rather go for the new cars right? Because those people are those well-to-do families."

Prospective car buyer Clarence Pang said: "Actually, I'm just checking out the cars, just looking at the value… maybe if the price is good, (I will) get it, or if not, just hold on."

Freddie Yap, also a prospective car buyer, said: "I will never, ever sign any papers to buy a vehicle over S$100,000."

Dealers are not expecting things to get any better, especially when car loan curbs for used cars kick in.

Companies have been downsizing operations or have moved out entirely, due to slowing business. Yet, others will see opportunity.

Taking up empty spaces are commercial vehicle sellers as they are unaffected by loan curbs.

Kenson Goh, sales executive at Car Design, said: "Most car dealerships will actually shrink. From maybe about four fronts to maybe about one or two fronts only. So definitely, a lot of people are cutting costs."

To ease the situation, the Singapore Vehicle Traders Association hopes authorities can raise borrowing limits from 60 to 80 per cent. It said this will reduce downpayment obstacles preventing some from buying a car.
- CNA/xq