Budget 2013

[Dora1]

hquek:

Because can take more loan?


But thought once the car is out of showroom, price already drop. Like that I also cant tell if can make money.

If MAS allows unlimited loan for 2nd hand car, I'm sure there will be enterprising 2nd hand car dealer who is able to match ppl who wants to buy new cars but can't pay the 50% down, but can take 100% loan, with ppl with cash. The person with enuf cash just plonks down the 50% down, drive the car out to the 2nd hand car dealer direct. The other guy takes 100% loan for the now 2nd hand car, and pays the 1st car a few hundred dollars and a few hundred dollars to the dealer. Win win situation.

That's why MAS is right to extend the loan restriction to 2nd hand car, if not the above scenerio can happen.

[janet88]

Taking full loan to pay for the car is really expensive. So this new ruling does make sense. If cannot afford, sorry to say, don’t think of it…I know it is selfish but monthly payments are no joke.

[Coolkidsrock2]

There are people who rely on leverage in order to afford consmption goods. The tightening of credit is a step in the right direction to prevent financial suicide. We do not know how long or how deep the global slowdown will be or how affected we will be and it will be prudent to live below one’s means.


This tightening of the car loan may not seem to be popular but if jobs should be lost duly, it should be able to prevent some cars from being tolled away.

[KSP]

so gov is going to make cars to be an even more luxury item in SG…


but think again if lesser ppl (minus off those who can’t fork out 50% cash) bid for coe the price will drop, the car price will drop too and this will only benefit those who are cash rich… perhaps this is one way gov wants to please the middle class (or maybe upper class)…

[pirate]

These people should watch the Can I Afford It segment on The Suze Orman Show. In the words of Suze Orman,

\"Are you crazy? You are so denied!\"

[Coolkidsrock2]

They need to balance the dual objectives of economic stability and meeting people’s aspirations and they have always been advising financial prudency. I do know some people who are living beyond their means through leverage with no savings at all. Their concept of cost is the amount they need to pay at each instalment, not the aggregate indebtedness.


We were very much spared during the 2008 crisis and it was followed by loose credit. But MNCs have done most of their cuts in Europe and America, not much left to cut. Am playing devils’ advocate that they will need to cut in Asia if market conditions do not improve duly.

Perhaps, in a few years time, with the benefit of hindsight, we may be grateful for a more restrictive credit regulations?

[KSP]

11 things to note if you are buying a car


Christopher Tan | The Straits Times | Friday, Mar 1, 2013

From whether you should sell your car now to the merits of taking a bridging loan, Christopher Tan compiles an FAQ for buyers in the light of dramatic changes to the taxes and financing rules.

My car is nine years old. Do you think certificate of entitlement (COE) prices will fall within the next 12 months?

There is more than a fair chance that premiums will fall within the next six months. After that, the market should get used to the new measures and prices might start stabilising. However, COE supply is likely to start expanding from next year.

Do you think resale prices will be affected?

Dealers are likely to offer lower prices for mid to lower-end models in the near term because of a foreseeable drop in COE prices and hence new car prices. Premium to high-end models should fetch higher trade-in prices as their new sticker prices will soar with the heftier taxes.

My car is approaching four years of age and it is starting to need major part replacements. I am thinking of selling but I took a 100 per cent loan over 10 years. Should I sell?

If you sell now, you are likely to be in a negative equity situation, which means the value of your car is less than the loan outstanding. It is not prudent to max out on your car loan.

I have just started a family, and I need a car, but I cannot afford the new down payment as my wife and I have just bought a flat. What are my options?

You can join a car-sharing scheme or you can lease. The latter best replicates the benefits of car ownership although the monthly instalments are higher. For instance, a Mazda3 in today's COE prices will cost $2,000 or so a month versus $1,300 if you bought it through hire purchase.

I will be retiring soon, and I am thinking of keeping my eight-year-old car. What do you think of extending its lifespan?

Revalidating your car's COE is a viable option, especially when premiums are expected to slide in the coming months. Many credit companies offer COE revalidation loans. The interest rate is around 2.88 per cent, versus 1.88 for a new car loan.

Will there be a surge in COE revalidation, and therefore fewer deregistrations and fresh COEs?

This could happen in the initial years. But the market will get used to the \"new normal\" over time and with growing affluence, the demand for new cars will rise, overcoming the high taxes.

Are banks likely to raise interest rates to shore up a drop in business because of the curbs?

The car loans sector is highly competitive. In a slow business environment, the bank that raises rates risks an even bigger loss of business. Should rates change, it would be because of macroeconomic reasons.

Should I start bidding for a COE myself, in case premiums crash?

There is no harm in doing so. You can bid via any DBS ATM, Citibank Internet banking portal, or use phone banking facilities by UOB and OCBC. You have to have $10,000 in your account for the bidding deposit and there is a small administrative fee. Car agents will sell you a car if you walk in with your own COE but they might charge you more. Alternatively, you might want to strike a deal with one before you place your bid.

I understand some car dealers are still taking orders based on the old terms. They will just backdate the purchase agreement to Feb 25. Should I go for it?

Aside from the risk of breaking the law, you should not rush into any deal when the prospect of a COE correction is looming large.

Should I buy a used car now?

If it is an old car - say something above seven years, or a car with a revalidated COE - yes. This is because their prices are unlikely to change much, even when new car prices fluctuate. For newer models, it is better to wait and see.

Someone said I could get a bridging loan from a licensed moneylender. What do you think?

This is not allowed. The bank that disburses you the car loan is expected to ensure your entire borrowing - including other sources of financing - does not breach the regulated quantum.

[Harlequin]

Coolkidsrock2:

There are people who rely on leverage in order to afford consmption goods. The tightening of credit is a step in the right direction to prevent financial suicide. We do not know how long or how deep the global slowdown will be or how affected we will be and it will be prudent to live below one's means.


This tightening of the car loan may not seem to be popular but if jobs should be lost duly, it should be able to prevent some cars from being tolled away.

:goodpost:

Coolkidsrock2:

They need to balance the dual objectives of economic stability and meeting people's aspirations and they have always been advising financial prudency. I do know some people who are living beyond their means through leverage with no savings at all. Their concept of cost is the amount they need to pay at each instalment, not the aggregate indebtedness.

We were very much spared during the 2008 crisis and it was followed by loose credit. But MNCs have done most of their cuts in Europe and America, not much left to cut. Am playing devils' advocate that they will need to cut in Asia if market conditions do not improve duly.

Perhaps, in a few years time, with the benefit of hindsight, we may be grateful for a more restrictive credit regulations?

:goodpost:

[cfan]

Got a question about cars, COEs or car loans? Get expert tips in ST's live blog special


Cars. Car loans. COEs.

Is it time to buy a car or sell it? Should you get a second-hand vehicle? How much loan should you take?

If you have a question about recent policy changes to the car market, get expert advice on Monday, March 4, between 12.30pm and 1.30pm.

The Straits Times' senior transport correspondent Christopher Tan will be giving his views in a live blogging session on The Straits Times' website here.

He will be joined by Motor Traders Association president Cheah Kim Teck, who is also chief executive of Cycle & Carriage's automotive business, and Mr Leong Sze Hian, past president of the Society of Financial Service Professionals.

You can send your car-related questions from today till 1pm on Monday. Please

* E-mail [email protected] or

* Tweet to #stcarblog or

* Leave them on The Straits Times' Facebook page

Car buyers were hit by a double whammy on Monday.

The Monetary Authority of Singapore said that they must now place down payments of at least 40 per cent of the purchase price and also settle car loans within five years. Before this, the market was unregulated for a decade.

Meanwhile, during the release of Singapore Budget 2013, the Government announced a tiered Additional Registration Fee (ARF) which can add $100,000 or more to the sticker price of a top-end car.

In the tiered scheme, a car with an open market value (OMV, which is the approximate cost price) of up to $20,000 will be taxed at the current rate of 100 per cent. The next $30,000 will be taxed at 140 per cent, and any OMV above $50,000 at 180 per cent.

[Oppsgal]

Don't seems to have much to do with me. SAHM without car, as no money for that... No business, not working. So nothing much is covered for me I think.


:sad: