Private-hire car buyers face 60% or 70% loan cap as Government extends financing curbs

Those looking to purchase vehicles registered as private-hire cars (PHCs) will soon be subject to loan-to-value (LTV) limits of up to 70 per cent and a financing tenure cap of seven years, the Government said on Thursday (Oct 29).

Under the new rules, motor vehicles that have an open market value (OMV) of $20,000 and below will have a maximum LTV of 70 per cent of the purchase price including taxes and the Certificate of Entitlement (COE).

Motor vehicles with an OMV of more than $20,000 will have a maximum LTV of 60 per cent, and the tenure of motor vehicle financing arrangements will also be capped at seven years.

The statement, released by the Ministry of Transport, Monetary Authority of Singapore, Ministry of Energy, Trade and Industry and Ministry of Law, explained that individual buyers of PHCs will now be subject to the same motor vehicle financing restrictions that apply to private car buyers.

The restrictions will apply to individuals obtaining motor vehicle loans from financial institutions and licensed or exempt moneylenders for the purchase of a PHC. They will also apply where financing takes the form of hire purchase or conditional sale agreements.

These restrictions will come into effect for purchases of individual-owned PHCs, where the sales agreements are signed on or after Friday (Oct 30), the ministries said.

"Where there is no sales agreement, the financing restrictions will apply if the COE is obtained on or after Oct 30, 2026," the statement added.

"Commercial vehicles, business-owned PHCs and motorcycles will continue to be exempt from the financing restrictions."

The Government said the PHC industry has evolved over the years, with the private-hire car fleet growing and stabilising. More recently, it has observed instances of individual buyers registering private cars as PHCs despite having no intention of offering private-hire services.

A recent surge in individual-owned self-drive PHC registrations, at around 500 a month, suggests that some buyers may be doing so primarily to access more permissive financing terms, it added.

"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," the Government said.

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

It further added that it will monitor market developments and may take further steps to apply the same restrictions consistently across financing arrangements, such as in-house loans. The Government will also work closely with platform operators to implement the measures effectively and consistently.

Responding to the move, Grab told AsiaOne that it supports the harmonisation of vehicle financing rules. 

"Industry-wide standards are an important safeguard to help protect drivers' long-term livelihoods," a Grab spokesperson said. 

The company added that it will focus on helping driver-partners navigate the changes, understand their financial commitments and make informed decisions.

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khooyihang@asiaone.com