For months we’ve seen the government roll out tighter limits and restrictions for almost every aspect of property, from loan-to-value (LTV) to loan tenures to eligibility restrictions. Recently, however, they seem to think that, even when it comes to cars, Singaporeans need help with financial prudence.

The recent Budget 2013 announcement included changes to some of the numbers for car loans in Singapore. A major change was a drastic decrease in LTV when purchasing motor vehicles, and a decrease in loan tenure. For vehicles with open market value (OMV) of $20,000 or less, the maximum LTV is 60% of the purchase price, which means the purchaser must come up with a 40% down payment. For vehicles that have OMV exceeding $20,000 the down payment required is even greater; 50% of purchase price. Not only that, the tenure for car loans has been reduced to a maximum period of five years.

Going back to the most recent cooling measures for Singapore property, we can see certain similarities emerging. Both LTV and loan tenure were targeted as well, in the January 2013 property cooling measures. We certainly wouldn’t fault you for thinking that these are cooling measures too, but for cars!

With the escalating Certificate of Entitlement (COE) prices, the car market is certainly following the property market in terms of pricing as well. Let’s compare the two, just for fun!

Let’s take the latest HDB condo… I mean apartment, to break the $1 million mark as an example. It seems as if cases such as these – HDB flat in Bishan fetching $1.01 million – are becoming less of a shocker these days, anyway.

For comparison, we’ll use a ball-park figure for a mid-range passenger car, factoring in today’s COE prices. It would be around $150,000. Of course, we all know that a COE only lasts 10 years. That would place the per-year cost of the car at around $15,000. If we extrapolate that to a full 99-year lease, that would work out to $1.485 million. Even if we use a typical 60-year lease remaining scenario, that’s $900,000 when applied to the car.

In other words, after accounting for the time used, that mid-range family car will be equivalent to a pretty decent HDB apartment, even at today’s vertigo-inducing property prices.

But let’s bring that comparison to the next level, shall we? A typical family sedan tops out at around 5 metres long and 2 metres wide. For simplicity, let’s use a total foot print of 10 square metres, which works out to 120 square feet. You probably can guess where we’re going with this…

That $1.01 million unit in our example was 1,755 square feet, which works out to $575.50 per square foot (psf). At best, in the 60-year lease scenario, the car would be $7,500 psf. That’s even higher than any of the residences in Sentosa Cove, let alone a HDB flat! In fact, not even the most luxurious freehold properties in the most posh neighbourhoods are even within reach of a Toyota Corolla in Singapore. And we thought Singapore property prices were such a big deal

Maybe that’s why the Saint Hilda’s honker feels entitled to be such a nuisance; her car outstrips any residence in terms of psf cost! In her case, money doesn’t just talk, it blares!

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