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SINGAPORE: Fleet sales by troubled car-leasing firms are unlikely to have a significant impact on COE prices, Acting Transport Minister Jeffrey Siow said on Wednesday (Feb 4) in response to parliamentary questions about high debt levels in the sector.
In a written reply, Mr Siow said private hire cars account for around 15 per cent of the car population in Singapore, with the five largest car-leasing companies owning around 3 per cent.
The rest are owned by smaller car-leasing companies and individuals.
"Defaults or fleet sales are unlikely to have a significant effect on COE prices or the used car market over the long term," he added.
According to the Accounting and Corporate Regulatory Authority, more than 200 car-leasing firms ceased operations in 2025, representing about 12 per cent of the industry.
Industry observers and companies CNA spoke to recently attributed the sector's troubles to unsustainable investments, aggressive price wars by newer players and overleveraged business models.
Easy access to capital for financing vehicle fleets has further weakened business fundamentals in an already competitive market.
MP He Ting Ru (WP-Sengkang) asked about the impact of defaults or fleet sales on COE prices and the user care market, as well as whether steps will be taken to curb practices that circumvent loan-to-value limits.
Mr Siow said the government will tighten regulations if necessary, noting that motor vehicle loans granted by financial institutions must abide by the Monetary Authority of Singapore’s (MAS) motor vehicle financing restrictions.
However, alternative financing arrangements extended by car dealers are not regulated by MAS.
"Buyers are strongly advised to obtain loans through regulated arrangements," said Mr Siow.
"The government is monitoring the situation and will tighten regulations to manage the abuse of such regulations if necessary."
Under MAS' motor vehicle financing rules, loans for personal use vehicles are capped at 60 or 70 per cent of the purchase price, depending on the vehicle’s open market value (OMV). Buyers must therefore pay the remaining 30 to 40 per cent upfront in cash.
However, these restrictions do not apply to commercial vehicles, including private hire cars. The intention was “not to constrain credit to companies and individuals who rely on such vehicles for their businesses and livelihoods”, MAS said previously.
