Used car showrooms see visitor surge

Used car dealers saw a surge in visitor numbers to their showrooms, after the MAS announced on Friday that loan restrictions on some used cars would be suspended for 60 days from April 6.

Following feedback from the Singapore Vehicle Traders Association, the Monetary Authority of Singapore (MAS) lifted temporarily its curbs on vehicles that were in stock or acquired before February 25, when the restrictions were announced.

The MAS curbs limit car loans to no more than 60 per cent of the purchase price and a tenure of not more than five years for vehicles with an open market value (OMV) of S$20,000 or less. When the OMV is more than S$20,000, a tighter limit of 50 per cent will be imposed.

To buy, or not to buy.

That was the question on the minds of those who went shopping for a second-hand car at showrooms in Ubi on Saturday.

But they have only up till 4 June to make up their minds.

A man at a showroom said the 60-day reprieve is a good time "to look around" while another potential buyer said "there is a window for us to do it, so we better do it as fast, as soon as possible".

The temporary lifting of restrictions is good news for second-hand car dealers who saw a drop in demand for their vehicles since the curbs were rolled out.

Eric Liew, general manager of Fugen Automobile, said: "I believe that in this short term, the measure will really help our business. I think more people are already coming in, looking at the cars right now."

But car dealers predict sales would not pick up until the third week, as consumers wait out for discounts.

Some dealers are considering offering discounts of up to 5 per cent for small cars and up to 10 per cent for big cars during the 60-day window.

They believe small second-hand cars will be popular among buyers.

Once the 60-day period is up, some dealers say they will scale down their business.

Fugen Automobile's Eric Liew said: "Looking forward, I would say that it's really very uncertain. Because after these 60 days, it will be back to the restrictions, and then we can foresee that most probably it'll become a very big slowdown."

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Is 5-10% discount enough to entice potential buyers to pounce? This weekend will be like Chinatown during Chinese New Year period for the second hand car showrooms. The buyers will be like sharks circling their prey, going around and having a look at their potential purchase.

The waiting game begins, and the dealers better give much more attractive packages right now than to start massive slashes to their prices as the 60-day period nears the end.