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13-12-2010, 08:21 AM
Interesting letter in ST Forum today which I felt I must highlight!
Dec 13, 2010
Regulate car financing
MOST cars in Singapore are bought on credit. Many people use a large portion of their incomes to repay car loans. This will lead to insufficient retirement savings, even if they had earned high incomes while they were working. The extreme scenario is bankruptcy, when the borrower is unable to pay the instalments.
It is easy to buy a car today with little or no down payment. Finance companies are also known to be lax in checking the income of car buyers.
If the authorities make it compulsory for buyers to fork out a down payment for both new and used cars, and for financing available to be limited to a factor of the buyer's income, the car market will be a lot saner.
People would own cars through hard work and savings, and not because of the clever marketing tactics of car dealers and finance companies.
This will result in fewer people running into financial problems after owning cars.
Ng Kwong Yee
Dec 13, 2010
Regulate car financing
MOST cars in Singapore are bought on credit. Many people use a large portion of their incomes to repay car loans. This will lead to insufficient retirement savings, even if they had earned high incomes while they were working. The extreme scenario is bankruptcy, when the borrower is unable to pay the instalments.
It is easy to buy a car today with little or no down payment. Finance companies are also known to be lax in checking the income of car buyers.
If the authorities make it compulsory for buyers to fork out a down payment for both new and used cars, and for financing available to be limited to a factor of the buyer's income, the car market will be a lot saner.
People would own cars through hard work and savings, and not because of the clever marketing tactics of car dealers and finance companies.
This will result in fewer people running into financial problems after owning cars.
Ng Kwong Yee
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/