- More than half of all sales in the Singapore Automotive Industry are of used vehicles, owing to the country’s high cost of living and a plethora of extra levies.
Despite the government’s initiatives aimed at reducing the number of automobiles on the road, there are approximately one million vehicles on Singapore’s roadways. As new automobiles are quite expensive, cost-effective models or used cars are doing very well, and the bulk of car purchasers are middle-class people opting for mid-range vehicles. Additionally, the current trend in Singapore toward the modernization of automobiles such as electric and hybrid automobiles is predicted to significantly enhance New Car Sales in the nation.
Indeed, as a result of the government’s infrastructure assistance, both big companies and start-ups in Singapore are aggressively working on early adoptions of Green Vehicles, resulting in the predicted rise in automobile sales. More and more automakers in the country are projected to begin utilizing modern technologies such as Big Data, Data Analytics, IoT, Blockchain, and others to better their company operations. Data collected from these technologies will aid in predictive maintenance, improved customer service, inventory monitoring, supply chain development, and other activities that will result in increased automobile sales.
- Rising Private Car Services, Emerging Green Loans, and Growing Digital Advancements are some of the major trends governing the Singapore Auto Finance Industry.
Singapore’s automobile lending sector is being driven by an increase in private vehicle service financing. The goal of vehicle service finance is to construct a financing scheme that provides potential drivers with flexible leases, weekly rentals, and discounts on new automobiles. In addition to this, trans-cab, Singapore’s second-biggest operator, has entered the vehicle lending and leasing sector in response to the country’s rapid rise in ride-hailing. Moreover, to encourage automobile owners in Singapore to decrease their carbon footprint, banks such as DBS have provided “Green Car Loans” with interest rates as low as 1-2% p.a. Furthermore, automotive financing companies are progressively focusing on greater technical improvements in order to boost operational profits and client experience.
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- Singapore has seen a drop in the number of motor vehicles sold over the years, but an increase in the percentage of vehicles financed, resulting in greater outstanding auto loans in the country.
Due to high costs and stringent government regulations, Singapore is seeing a decline in the number of motor cars sold, resulting in a progressive decrease in total auto credit given in the country. However, as consumer satisfaction with vehicle loan procedures has grown, they are financing a larger amount of their car OMVs. Most new automobiles sold in Singapore are purchased on credit due to their higher pricing than used vehicles. Moreover, it has been noticed that with the simplicity of the loan application procedure and digital improvements, the finance penetration rate of used automobiles is also fast expanding due to an increase in the number of individuals applying for car loans.
- Time-Consuming Application Process, High Cost of Loans, and Decreasing Car Sales are some of the major Pain Points in the Singapore Auto Finance Industry.
Car loan rates in Singapore may appear to be higher than other types of loans. This is due to the fact that they utilize a flat rate strategy in which the interest rate is fixed and dependent on the original loan amount. Furthermore, if the loan is obtained through an auto dealer, the interest rates are often twice as high as those given by banks. Additionally, the fee of the vehicle salesman enhances the interest rates of auto dealers.
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Singapore is undergoing fast digitization, particularly in the automobile banking industry. Traditional car dealers in the nation, on the other hand, are frequently unable to keep up with the digital transition. Moreover, an ordinary vehicle loan application in Singapore sometimes necessitates a large quantity of paperwork from both the salesman and the consumer. Consumers also have difficulties comprehending loan features during loan talks; thus, the conditions of their vehicle finance are sometimes unclear and time-consuming.
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