Owning a car can be a dream for many. Here are some of the cheapest car loans to consider if you want to make your dream a reality while keeping your costs in check.
Every spending situation is unique. SingSaver assembles the 'Best For' list, so you can decide what’s best for you.
Singapore is one of the most expensive places in the world to own a car. An entry level Japanese-make family sedan would already cost upwards of S$100,000 – that’s about 30% of a three-room HDB flat!
Unless you have a secret five-figure stash of cash squirrelled away, you would have to apply for a car loan like most car owners. As with most loans, the important considerations are the interest rates, the maximum amount you can borrow and the loan tenure. With car loans, a difference of 0.5% in interest rate can amount to several thousands of dollars in extra interest paid, so it’s worthwhile to do your research before committing to buying a new or used car.
In Singapore, you will also need to be familiar with terms like COE (Certificate of Entitlement), OMV (Open Market Value) and PARF (Preferential Additional Registration Fee), which all relate and contribute to the price tag of a car, be it new or used.
- What’s the maximum amount you can get from a car loan?
- Best car loans for new & used cars in Singapore
- Is it better to get a car loan from the bank or a car dealership?
- Can you get a car loan if you have poor credit?
- How to choose a car loan
What’s the maximum amount you can get from a car loan?
The maximum amount you can get from a car loan is either 70% or 60% of your car’s open market value (OMV):
- Motor vehicle with OMV ≤ S$20,000: maximum LTV is 70%
- Motor vehicle with OMV > S$20,000: maximum LTV is 60%
However, bear in mind that you may or may not receive the maximum Loan-to-Value (LTV). The bank or financial institution will take into account all your other debt obligations before deciding on the amount of car loan you qualify for. Also, your car loan has to be compliant with Total Debt Servicing Ratio rules.
Standard Chartered CashOne Personal Loan Welcome Gift: Receive up to S$3,100 cashback when you apply for a minimum loan of S$10,000 with a loan tenure of 3 - 5 years. Valid till 31 March 2023. T&Cs apply.
Best car loans for new & used cars in Singapore
|Best For||Car Loan||Benefits|
|Electric car buyers||OCBC Eco-Care Car Loan||- Competitive interest rate of 2.48% p.a.
- Get your loan approved in 60 seconds before visiting the showroom
|New or used green car buyers||DBS Green Car Loan||- Competitive interest rate of 2.88% p.a.
- One tree will be planted for every new DBS Green Car Loan application
|Buyers who only need a small loan amount||UOB Car Loan||- Interest rate of 3.18% p.a. for new and used cars
- Minimum loan amount starts from S$10,000
|Buyers who want options where they can get their new or used car from||Standard Chartered Auto Financing||- Interest rate of 3.08% p.a. for new and used cars
- Purchase the car of your choice from Standard Chartered’s wide network of dealers across the island
|Used COE cars||UOB COE Car Loan||- Interest rate of 3.25% p.a. for COE cars aged between 10 and 11 years
- Tenure of up to 7 years for revalidated COEs
|Used car buyers (including foreigners)||Hong Leong Finance Used Car Loan||Competitive interest rate of 3.08% p.a.|
|Drivers who want a one-stop COE renewal service||Motorist COE Renewal Car Loan||- Free COE renewal consultation
- Free pre-COE renewal car inspection
- Access to COE loan calculator
Best for electric car buyers: OCBC Eco-Care Car Loan
OCBC Eco-Care Car Loan is a great option if you are looking to purchase an electric car. Not only are you able to get an in-principle approval within 60 seconds — so you’re aware how much you can potentially borrow from the bank to finance your vehicle — but you can also save and benefit from the competitive interest rate of 1.68% p.a.
To encourage more car owners to go green, OCBC Eco-Care Car Loan also lets customers enjoy six months of free charging of their electric car if they reside in an HDB flat. Those who reside in a condominium or private property will enjoy 12 months of free charging.
Additional perks are available if you purchase a new Jaguar I-PACE and take up the OCBC Eco-Care Car Loan.
Best for new or used green car buyers: DBS Green Car Loan
DBS Green Car Loan might just be what you need if you’re interested in buying a new or used green car in a bid to lower your carbon footprint and drive towards a greener, cleaner tomorrow.
Besides the attractive interest rate of 2.88% p.a. (similar to what OCBC Eco-Care Car Loan offers), you’ll be pleased to know that one tree will be planted for each new DBS Green Car Loan application the bank receives and approves. This welcome initiative is executed in collaboration with NParks’ OneMillionTrees movement.
Best for buyers who only need a small loan amount: UOB Car Loan
Need to borrow just a small sum of money to finance your car thanks to your healthy stash of savings? UOB Car Loan has a minimum loan amount of just S$10,000.
UOB Car Loan offers an interest rate of 3.18% p.a. for new and used cars (10 years and under). This applies across loan tenures ranging from one to seven years. The bank promises fast processing and approval with its wide network of dealers, too.
Best for buyers who want options where they can get their new or used car: Standard Chartered Auto Financing
Standard Chartered Auto Financing offers a wide distribution network of dealers scattered across Singapore, making it ultra convenient for potential car buyers to purchase the car of their dreams wherever they may be.
The application process and various payment channels available for customers to repay their monthly car loan instalments are also hassle-free and convenient to boot.
Standard Chartered Auto Financing offers an interest rate of 3.08% p.a. for new and used cars. Customers are free to pick a loan tenure ranging from one to seven years that best suits them.
Best for used COE cars: UOB COE Car Loan
UOB COE Car Loan is ideal if you’re extending the COE of your car and your car happens to be aged between 10 and 11 years.
With tenures of up to seven years and a loan quantum of up to 70% of the purchase price or the bank’s valuation, whichever is lower, UOB COE Car Loan is a viable option for car owners who aren’t quite ready to bid farewell to their workhorse car just yet.
UOB COE Car Loan offers an interest rate of 3.25% p.a. across the different tenures available to customers.
Best for used car buyers (including foreigners): Hong Leong Finance Used Car Loan
Available to Singaporeans, Singapore Permanent Residents as well as foreigners, Hong Leong Finance Used Car Loan is an option for your consideration. Its interest rate of 3.08% p.a. is comparable with what Standard Chartered Bank and UOB are offering used car buyers.
Hong Leong Finance promises to offer its customers personalised and hassle–free services on their loan application with flexibility in repayment periods. FYI, the financial institution also offers financing solutions for commercial vehicles as well as new cars.
Best for drivers who want a one-stop COE renewal service: Motorist COE Renewal Loan
While Motorist isn’t technically a bank or financial institution, it acts as the middleman between drivers looking to renew their COE and banks and financial institutions such as UOB, Maybank and Hong Leong Finance.
Motorist strives to help drivers get their fuss-free COE Renewal Loan in just four steps!
Apart from comparing the Prevailing Quota Premium (PQP) and interest rates to help you maximise your savings, Motorist is more than happy to recommend the best time for you to renew your COE. Also, there’s a free COE loan calculator that you can use to get an estimate of your loan repayment based on the PQP, loan amount, and loan tenure.
That’s not all. To ensure your car is suitable for COE renewal, Motorist offers a free Pre-COE inspection at one of their partner workshops.
Another interesting perk of using Motorist? Its lowest COE loan interest rate guarantee. If you can find a lower interest rate elsewhere, Motorist promises to give you S$50, no questions asked.
Is it better to get a car loan from the bank or a car dealership?
Banks typically offer car loan interest rates that are more competitive (2% - 3.5% p.a.) compared to car dealerships (3.7% - 5% p.a.).
The difference may not seem like much on paper but your cost of borrowing can differ greatly if you do the sums. Car dealerships tend to charge higher administrative and processing fees than most banks, too.
Can you get a car loan if you have poor credit?
The short answer is yes, and you’ll stand a better chance of getting a loan from a car dealership or licensed moneylender instead of a traditional bank. Banks have more stringent criteria than car dealerships and licensed moneylenders. Keep in mind, however, that banks’ interest rates are also likely to be higher.
How to choose a car loan
The best car loan for me may not be the best car loan for you: everyone’s needs and situation are different. If you want to make each dollar of yours work the hardest that it possibly can, do your homework.
When choosing a car loan, consider the following:
- Whether your car is old or used
- Whether your car is over 10 years old
- Whether your car is green
- Your credit score
- Your other debt obligations
- Interest rate
- Loan tenure
- Minimum and maximum amount you can borrow
- Early repayment fees
- Processing and administration fees
- Eligibility requirements
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