Singapore is notorious for extremely high car prices. With just the cost of COE being around S$50,000 to S$60,000, car prices remain at levels not easily affordable for most Singaporeans. Therefore, car loans are quite popular in the country among car lovers who use them to finance their purchases of new and used cars. If you are in the market for a new or used car and are looking for the best way to finance your purchase, you can read our analysis of the best car loans in Singapore below to see what options are most suitable for you.
- Best Car Loans in Singapore
- Cost Comparisons of Car Loans in Singapore
Car loans in Singapore typically charge flat interest rates, meaning interest payment is a constant amount each month over the life of a loan. For example, a 2% flat rate for S$10,000 of loan over 5 years will cost S$200 of interest every year. Therefore, we have organized in a table below various car loans in Singapore by their interest levels and total costs. To calculate cost, we assume the loan is for S$50,000 and is taken out for 5 years. OMV stands for "Open Market Value" representing the value of a car.
|Car Loans in Singapore||Interest Rate||Tenure||Max Principal||Monthly Instalment||Total cost|
|DBS Car Loan||2.08%||1-7 Years||Up to 70% of OMV||S$920||S$5,200|
|Hong Leong Finance||2.78% (2.98% for used)||1-7 Years||70% of OMV||S$949||S$6,950|
|Maybank Auto Loan||3.25%||1-5 Years||60% of OMV||S$969||S$8,125|
|OCBC Car Financing||2.78% (2.98% for used)||1-7 Years||70% of OMV||S$949||S$6,950|
|Standard Chartered||2.70% (3% for used)||1-7 Years||70% of OMV||S$946||S$6,750|
|UOB HP Car Loan||3.25% (3.875% for used)||1-7 Years||70% of OMV||S$969||S$8,125|
|Century Tokyo Auto Loan||3.28%||1-5 Years||70% of OMV||S$970||S$8,200|
|OCBC Car Refinancing||1.99%||1-7 Years||100% of Outstanding Balance||S$916||S$4,975|
Unlike other types of loans, most of the car loans are quite similar in Singapore. Therefore, we think the below four loans are the best options for car loans if you are buying a new car. These four loans all cover up to 70% of your car’s price, and all are available for tenures ranging from 1 year to 7 years. Given that these loans all charge about 2.78% in flat interest, we think it’s difficult to make a bad choice from the below four options, though there are some small differences that are nuanced. If you are already a banking customer with one of these banks, you may choose to go with the same bank for your car loan to simplify your monthly bills (perhaps you could also ask for a special discount!).
- DBS Car Loan: Promotional 2.08% Interest Rate until 28 Feb 2017 (normally 2.78%)
- Hong Leong Finance New Car Loan: 2.78% Interest Rate
- OCBC New Car Financing: 2.78% Interest Rate
- Standard Chartered New Car Loan: 2.7% Interest Rate
Assuming you borrow S$70,000 over 5 years to fund your purchase, these loans will cost you about S$9,450 to S$9,730 in interest. This translates to S$1,324-S$1,329 of equal monthly instalments for the borrower.
|New Car Loans in Singapore||Monthly Instalment||Total cost|
|DBS Car Loan||S$1,288||S$7,280|
|Hong Leong Finance - New Car||S$1,329||S$9,730|
|OCBC - New Car Financing||S$1,329||S$9,730|
|Standard Chartered - New Car||S$1,324||S$9,450|
Buying a used car can be a great option if your budget is more limited. However, there are a lot of things you need to make sure before buying a used car. For example, you must do a thorough inspection to ensure the car is not seriously damaged. It’s also worth checking how many years are left in the car’s COE. At any rate, since used cars are worth less than new cars, and since used car buyers tend to be less affluent than new car buyers, banks typically charge a slightly higher interest rates. Given this, we think the below three options are the best car loans for used car buyers. They all have interest rates of around 3%, and come with durations that range from 1 to 7 years. Similar to new car loans, these banks will lend up to 70% of the car’s open market value (OMV).
- Hong Leong Finance Used Car Loan: 2.98% Interest Rate
- OCBC Used Car Financing: 2.98% Interest Rate
- Standard Chartered Used Car Loan: 3% Interest Rate
Assuming you borrow S$50,000 over 5 years to fund your purchase, these loans will cost you about S$7,450 in interest. This translates to S$958 of equal monthly instalments for the borrower.
|Used Car Loans in Singapore||Interest Rate||Tenure||Max Principal||Monthly Instalment||Total cost|
|Hong Leong Finance - Used Car||2.98%||1-7 Years||70% of OMV||S$958||S$7,450|
|OCBC - Used Car Financing||2.98%||1-7 Years||70% of OMV||S$958||S$7,450|
|Standard Chartered - Used Car||3.00%||1-7 Years||70% of OMV||S$958||S$7,500|
OCBC's Car Refinancing Loan is a unique offering that allows you to refinance 100% of your existing car loan at a lower rate. For applicants who have an existing car financing with other banks (for at least 6 months) at an interest rate of 2.40% a year or more, OCBC is offering a Refinancing Loan with just 1.99% in interest rate. This is a great deal that can save you a lot of money.
For instance, let’s say you took out a car loan of S$70,000 for 5 years at 2.78%. After 1 year, you would have paid a total of S$15,946 to the bank, consisting of S$1,946 in interest and S$14,000 in principal repayment. If you stick with such a loan for the full 5 years, it would have cost you S$9730 in interest payment.From you second year and on, you decide to refinance the remaining S$56,000 with OCBC’s Refinancing Loan at 1.99%. This will automatically decrease your monthly instalment from S$1,329 to S$1,260. Not only that, for the remaining 4 years, the total cost in interest will only be S$4,458. This means that you just saved S$3,326 in interest that you otherwise would have paid to your original bank! Below is a table that illustrates this calculation in detail.
|Original Loan 1st Year||OCBC Refinancing Loan from 2nd Year||Original Loan for 5 Years|
|# of Years||1||4||5|
|Total Saving From Refinancing||S$3,326|
Below, we have featured a chart comparing cost of different car loans in Singapore. We have grouped them by new car, used car and refinancing loans.