Thinking about buying a car in Singapore? Chances are, you’ll need a car loan especially with COE prices pushing total costs into the six-figure zone.
Whether you’re eyeing a brand-new ride or a reliable used vehicle, understanding how car financing in Singapore works is crucial. From MAS downpayment rules to interest rates, balloon schemes, and depreciation, here’s a breakdown of everything you need to know before taking up that loan.
Car Loan Downpayment Rules in Singapore
In Singapore, car loans are governed by Monetary Authority of Singapore (MAS) regulations. To qualify for a standard car loan, you must put down at least 30% of the car’s purchase price upfront.
This rule helps prevent over-borrowing and keeps your monthly repayments manageable.
Example: Buying a car for $90,000? You’ll need to fork out $27,000 as a downpayment. The rest—$63,000—can be financed through your car loan.
Car Loan Interest Rates in Singapore
Car loan interest rates in Singapore usually start around 2.48%, with most borrowers landing closer to 2.78%, depending on the loan tenure and your credit profile.
Example: Borrow $70,000 over 7 years at 2.78% interest? You’ll pay around $995/month.
💡 Always compare car loan rates across banks and dealers before signing. Some in-house financing offers flexibility, but might come with higher interest.
What Is a Balloon Scheme for Car Loans?
A balloon payment scheme reduces your monthly instalments by deferring a lump sum to the end of the loan term. It sounds appealing but requires careful planning.
- Lower monthly repayments
- Large final payment (the “balloon”) due at the end
✅ Best for: Buyers planning to sell the car before loan maturity
⚠️ Watch out if: You’re not prepared to cover the final payout
Depreciation: The Hidden Cost of Car Ownership
Depreciation is how much value your car loses each year. In Singapore, this happens fast due to COE expiry and high upfront costs.
Example: Buy a $100,000 car with $10,000/year depreciation → After 5 years, it’s worth ~$50,000.
If you sell before the car is fully paid off, depreciation may leave you with less resale value than your loan balance.
Questions to Ask Before You Sign a Car Loan
Before you commit to a loan package, clarify these:
- Is there a penalty for early repayment?
- Is the loan transferable if I sell the car?
- Is it a bank loan or in-house financing?
- What is the effective interest rate (EIR), not just the flat rate?
🚨 Always read the fine print. A car loan is a long-term commitment so it’s good to know exactly what you’re agreeing to.
Final Thoughts: Choosing the Right Car Loan in Singapore
Getting a car loan in Singapore isn’t just about the lowest rate, it’s about sustainability. Will your repayments still feel manageable 3 or 5 years down the road?
At Vision Motoring SG, we help first-time and experienced car buyers make smart, confident decisions. From breaking down your loan options to guiding you through the paperwork, we’re here to make the process smooth and stress-free.
Want expert help navigating your car loan options?
Contact us here or visit our showroom. You can also try our loan calculator to get a quick estimate. We’ll walk you through your financing options and help you find a loan that fits your budget and lifestyle.
