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Stricter Enforcement of Vehicle Loan Regulations to Prevent 100% Financing Packages
15 Oct 2025In Parliament
Written Reply to Parliamentary Question
Mr Yip Hon Weng asked the Acting Minister for Transport whether the Ministry will review and more strictly enforce motor vehicle loan regulations to curb practices of some car dealers offering 100% motor vehicle financing packages which circumvent existing MAS loan rules.
Reply by Acting Minister for Transport Jeffrey Siow:
1. Motor vehicle loans granted by financial institutions (FIs) must abide by the Monetary Authority of Singapore’s motor vehicle financing restrictions. Under these restrictions, the maximum loan-to-value (LTV) limit is based on the vehicle’s Open Market Value (OMV), with those above $20,000 OMV capped at 60% and those below or equal to $20,000 capped at 70%.
2. However, alternative financing arrangements extended by car dealers are not regulated by the MAS. These include leasing arrangements, or lease-to-own schemes that are not structured as hire-purchase arrangements. Buyers are strongly advised to obtain loans through regulated arrangements instead of unregulated ones, as they will have no protection if there are problems with the loan arrangements.
