Motor dealers in Singapore have expressed the view that extending financing restrictions to individuals registering private-hire cars is unlikely to reduce the price of certificates of entitlement (COEs) before the end of 2026. The extension, which took effect on October 30, aligns loan tenure and limits for private-hire car purchases with those already in place for private cars, imposing cash down payments of 30% to 40%.
COEs are required to register vehicles and their prices reflect demand in the market. Category A COEs, for mass-market cars, reached a record $133,009 in September. Previously, private-hire car buyers could obtain loans covering the full price of the vehicle with no tenure limits, as their cars were classified for commercial use. The loan curbs aim to encourage financial prudence and reduce individuals registering private-hire cars primarily to benefit from more lenient financing terms.
Industry stakeholders—including car distributors, finance companies, and parallel importers—note that the immediate impact of the curbs on COE demand may be minimal. Several factors are driving continued demand, including a surge in vehicle registrations ahead of the expiry of current tax incentives on January 1, 2027. These incentives currently subsidize electric vehicles (EVs), a benefit set to be reduced by $10,000 next year. At the same time, surcharges on non-EVs will increase by $7,500 based on emissions.
Additional contributing factors are sales from a recent Car Expo held on October 24 and 25, which typically lead to higher COE demand in subsequent bidding exercises, and an extended interval—three weeks instead of the usual two—between the November and December COE bidding rounds. This longer gap allows dealers to accumulate more confirmed orders awaiting COE allocation.
Private-hire cars in Singapore number nearly 99,000 as of September 2026, with about 38,000 of these being rental vehicles. According to a joint statement by the Ministry of Transport (MOT), Monetary Authority of Singapore, Ministry of Energy, Trade and Industry, and Ministry of Law, registrations of individual-owned self-drive private-hire cars have surged to roughly 500 per month in 2026, up from 300 monthly registrations in 2025.
Corina Chua, managing director for Volvo at Wearnes Automotive, acknowledged that while the new loan curbs may not bring COE prices down immediately, they could help prevent further increases in premiums. Vincent Tan, director of Tembusu Financial Services, said some buyers affected by the tighter loan rules might shift toward used cars, which generally carry lower prices, thereby easing some demand for COEs.
Private-hire driver Ivan Seah pointed out that full-time drivers typically rent their vehicles rather than own them, indicating the new restrictions may primarily affect part-time drivers aiming to circumvent large down payments. For instance, purchasing a new Toyota Alphard would now require a down payment exceeding $170,000 and monthly installments of about $3,600 on a seven-year hire purchase, while leasing costs considerably less upfront.
Ernest Tan, deputy chief executive of Vincar Group, which distributes EV brands such as GAC Aion and Proton e.Mas, said some buyers have overextended financially, driven by dealers eager to secure sales. He welcomed the government’s intervention as necessary to prevent market conditions from worsening further.