Monetary Authority of Singapore Annual Report 2012/2013
Anchor of Economy

MACROPRUDENTIAL POLICIES

Financing Restrictions on Motor Vehicle Loans

In February 2013, MAS introduced financing restrictions on motor vehicle loans granted by financial institutions. The tenure of motor vehicle loans was capped at five years while the loan-to-value was limited to a maximum of 50% or 60% depending on the open market value of the motor vehicle. The restrictions were put in place to encourage financial prudence among consumers and moderate demand for motor vehicles. In consideration of feedback from industry participants and members of the public, an exemption was made for the physically disabled and their caregivers. A 60-day exemption was also granted to motor vehicles that were part of the used car industry’s inventory and that were acquired prior to the introduction of financing restrictions.