Singapore closes car loan loophole by extending financing curbs to individually owned private-hire cars

For vehicles with an OMV exceeding S$20,000, the maximum loan-to-value ratio will be 60 per cent.

The purchase price includes relevant taxes and the cost of the certificate of entitlement (COE), where applicable.

Loan tenures will also be capped at seven years.

These restrictions already apply to ordinary private car purchases but have not applied to PHCs, which were previously exempted on the basis that they were used for commercial purposes.

The exemption was originally intended to recognise the commercial use of PHCs, which, unlike taxis, are private cars that can also be used to provide private-hire services.

However, the authorities noted that the PHC industry had evolved over the years, with the fleet having grown and stabilised.

“More recently, there have been more instances of individual buyers of private cars using this exemption who have no intent to offer PHC services,” the authorities said.

“To ensure that PHC purchases cannot be used to circumvent financing restrictions that apply to private car buyers, individual buyers of PHCs will now be subject to the same financing restrictions as private car buyers,” they added.

“This will also ensure that new PHC drivers exercise the same financial prudence as other private car buyers.”