The Singapore Auto Finance Market was observed to be in a growth stage between 2015 and 2020 as a result of increasing digital advancements which has eased the loan application process, emerging green car loans, the introduction of finance aggregators, and other factors. In 2015-20, the Singapore Auto Finance Industry grew at a CAGR of 0.7% on the basis of auto credit disbursed and 2.2% on the basis of auto loan outstanding. The CAGR was relatively low due to a lower number of cars financed in 2020 as a result of COVID-19.
1. High Income People, largely males and majorly between the Age Group of 35 – 44 years are the largest Buyers of Cars in Singapore.
Other Challenges in Singapore Auto Finance Market
More than 60% of the population that buy motor vehicles are from the male segment, whereas the remaining are purchased by the women. Moreover, in this, the higher income group are more likely to purchase their own vehicles as compared to the other groups of the income. In Singapore, the research shows that the age group of 34-44 are the target customers of the vehicle purchase as they are in the better condition to buy more sophisticated motor brands. Moreover, due to strict regulations and high taxes, the car ownership rate in Singapore is relatively low compared to its neighboring countries.
2. Rising Private Car Service, Emerging Green Loans, Growing Digital Advancements are some of the major Trends governing the Singapore Auto Finance Industry.
The rise in private car service financing is driving the Singapore automotive financing market. The objective of car service financing is to create a financing program that offers flexible leases, weekly rentals, and discounts to purchase new cars to potential drivers. Moreover, banks in the country such as DBS have launched “Green Car Loan” at interest rates as low as 1-2% p.a. to encourage car owners in Singapore to reduce their carbon footprint. Furthermore, Automotive Financing Companies are increasingly moving towards higher technological advancements to improve operational profits as well as customer experience. For example- AI is increasingly making important decisions, from who gets approved for credit to how to answer customer questions about loan decisions in real time.
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3. Singapore Auto Finance Industry witnessed decreased Car Sales and an increase in Non-Performing Loans during the COVID 19 Peak in the country.
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Singapore Auto Finance Industry witnessed decreased Car Sales and an increase in Non-Performing Loans during the COVID 19 peak in the country. Non-performing loans also surged as consumers and businesses were unable to make loan/lease payments. Relatively larger number of people opted for deferred loan repayment Government Schemes. Moreover, the Singapore Government also announced a special “Hire Purchase Agreement” valid till 31st January 2021 in which temporary relief from legal or enforcement actions was provided against any failure to pay or breach of contract caused by COVID 19. It broadly covered commercial vehicles in Singapore.
- Online Auto Finance Aggregator Platforms in Singapore is an emerging Market in the country which is expected to extremely simplify the whole loan acquisition process.
Emerging Aggregator platforms in Singapore are direct-to-consumer channels that allow buyers to shop online for loans and get them approved before going to the dealership. These platforms collaborate with Banks, Captives, NBFCs, Fintech lenders and other peer-to-peer lending platforms to provide multiple financing options that range from personalized interest rates and variable terms to completely new ownership models such as shared leasing and car subscriptions. In the past, 5 – 10 years, Singapore is witnessing a new wave of digital enhancements with several new fin-tech platforms for aggregation, peer – to – peer lending and more coming in the market.
Key Segments Covered
By Type of Cars Financed- (Units)
- New Vehicles
- Used Vehicles
By Type of Institution (Loan Outstanding) (SGD Billion)
- Banks & Subsidiaries
- Finance Companies
- DBS Bank
- Standard Chartered Bank
- Hong Leong Finance
- Singapura Finance
- Sing Investment & Finance
- Singapore Auto Finance Property Holdings
- Credit Master
- SG Cash N Cars
- Speed Credit
- SF Holdings
- Accord Motoring
- Goldbell Financial Services
- Money Max Leasing
Key Target Audience
- Existing Auto Finance Companies
- OEM Dealerships
- Captive Finance Companies
- Credit Unions
- Private Finance Companies
- New Market Entrants
- Government Organizations
- Auto mobile Associations
- Auto mobile OEMs
Time Period Captured in the Report:-
- Historical Period: 2015-2020
- Forecast Period: 2020-2025
Key Topics Covered in the Report
- Comprehensive analysis of Singapore Auto Finance Market and its segments.
- Listed major players and their positioning in the market.
- Identified major industry developments in last few years and assessed the future growth of the industry.
Ankur Gupta, Head Marketing & Communications