A rise in private hire car registrations has prompted Singapore to close a gap in its car financing rules.
Individuals buying private hire cars will face the same borrowing limits as regular car buyers under new rules taking effect on 30 October 2026.
Buyers can borrow up to 70 percent of the purchase price for vehicles with an open market value (OMV) of S$20,000 or less.
The limit falls to 60 percent for vehicles valued above S$20,000.
The purchase price includes applicable taxes and Certificate of Entitlement (COE) costs. All financing arrangements will be capped at seven years.
The restrictions cover loans from financial institutions and licensed or exempt moneylenders, as well as hire purchase and conditional sale agreements.
They apply to purchases with sales agreements signed on or after 30 October.
Where no agreement exists, the rules take effect if the COE is obtained on or after that date.
Sole proprietors are also covered, while business-owned private hire cars, commercial vehicles and motorcycles remain exempt.
Surge in Private Hire Car Registrations Raises Red Flags
Previously, individually owned private hire cars were exempt from these financing limits because they were used for commercial purposes.
However, authorities have observed more cases of buyers registering private hire vehicles without intending to provide private hire services.
Registrations of individually owned self-drive private hire cars have recently reached around 500 per month, raising concerns that some buyers are using the exemption to obtain larger loans.
The government also considered introducing a separate COE category for private hire and car-leasing companies but decided against it over concerns that it could increase vehicle rental costs and passenger fares.
Authorities will continue monitoring financing practices, including in-house loans, and work with platform operators to implement the restrictions.
Featured image: Edited by Fintech News Singapore, based on image by dapor2560 via Magnific
