Physically disabled, caregivers will be exempted from car loan curbs - 07Mar2013. SINGAPORE: Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam has said that the physically disabled or their caregivers will be exempted from the new loan restrictions for one car.
He made the announcement in Parliament on Thursday, following feedback that the new loan limits will adversely impact those truly in need of a vehicle.
MPs have raised the plight of families with young children, the elderly and disabled.
Under new rules imposed last month, prospective car buyers can take up loans of only up to 60 per cent of the price of a car, depending on its Open Market Value (OMV).
That means buyers have to fork out a cash downpayment of at least 40 per cent.
At the same time, the loan tenure has been shortened to five years.
Mr Tharman said the exemption will take reference from the criteria in existing assistance schemes for the physically disabled.
The Monetary Authority of Singapore (MAS) will provide details of this exemption soon.
Mr Tharman said the central bank cannot liberalise further at this point without undermining one of the important reasons for the new loan rules - that is, to cool demand and the skyrocketing Certificate of Entitlement (COE) prices.
The minister said COE prices have gone up by between 40 per cent and 60 per cent over the past two years.
The rise in COE prices, he added, has also been a major contributor of inflation in Singapore.
Separately, for used car dealers, Mr Tharman said the Land Transport Authority (LTA) will give them more time to find buyers for their cars.
It will do so by extending the temporary transfer scheme for used car dealers from the current nine months to a full year.
"MAS has met with the Singapore Vehicle Traders Association to listen to their feedback and also explain the rationale for the measures," said Mr Tharman.
Mr Tharman added the MAS is also studying how the depreciation in the value of a used car can be taken into account in determining the OMV for the purpose of applying the appropriate tier for the new loan rules.
The new loan rules have a 50 per cent or 60 per cent loan-to-value ratio, depending on the OMV.
Mr Tharman stressed that the new loan rules are not permanent. They will be reviewed, depending on market circumstances.
Tags: Physically disabled, caregivers will be exempted from car loan curbs - 07Mar2013, Singapore, news, Ch5, 154media, 154thmedia, 154thmedia2012, budget 2013, car loan, cooling measure