Car Loan
Financing a Car in Singapore: Everything You Need to Know
From COE to loan limits, here's a complete guide to understanding car financing in Singapore before you sign anything.
Lendela Team ·
The true cost of owning a car in Singapore
Before considering a car loan, account for: COE premium, OMV-based ARF, GST, insurance, road tax, petrol, ERP, parking, and maintenance. The monthly instalment is often the smallest component.
LTV limits
MAS caps car loan quantum based on the vehicle’s Open Market Value (OMV):
- OMV ≤ S$20,000: Up to 70% financing
- OMV > S$20,000: Up to 60% financing
The maximum loan tenure is 7 years.
Hire Purchase vs bank loan
Most car loans in Singapore are structured as hire purchase agreements — the lender retains ownership until the final payment. Bank direct loans are also available and sometimes offer more flexibility.
Tips for getting the best rate
- Get quotes from at least three lenders.
- A higher down payment reduces your interest cost significantly.
- Consider the full tenure cost, not just monthly instalment.