SINGAPORE: Car leasing companies are seeing brighter prospects with the recent car loan curbs. Some companies said enquiries have gone by 10 to 30 per cent and they're hoping to cash in on the potential demand.
Car prices have risen in light of the smaller supply of Certificates of Entitlement. The recent car loan restriction of up to 60 per cent also means that buyers have to fork out more cash upfront to get that set of wheels. But it seems that more are considering leasing as a viable and temporary solution to car ownership. Joseph Poh, honorary secretary of the Singapore Vehicle Rental Association, said: "I think people are reluctant to come up with such a huge amount and most showrooms are looking at offering leasing packages to the car buyers.
Most of these packages would target the middle-income group, those who do not want to put up a large sum of money upfront to buy cars. "Usually a leasing package will involve two months' deposit and one month of upfront payment for the lease. Upfront may be about S$4,000 to S$6,000 as compared to perhaps S$40,000 to S$50,000 that you need to fork out to buy a new car.
Leasing can be a rather attractive option as one does not need to pay for insurance, road tax and maintenance of the car. A replacement car can also be provided in the event of an accident. Prices for leasing used cars are typically lower, with some starting from S$1,200 per month.
MKM Car Leasing, which leases cars for a minimum period of one year, aims to offer the perfect fit to the cash-strapped. Its business manager Mick Teoh said: "We are seeing a lot of customer queries and also we also trying to offer slightly older vehicles - for example, 2006-2007 models to Singaporeans who are a little bit of budget conscious but the vehicle itself is actually quite well maintained." The company expects business to grow by 10 to 20 per cent in the coming months.