More car loans given out in S'pore in 2024 amid EV boost

Banks seeing an uptick in green car loans; loan rates unlikely to fall in short term

- Chor Khieng Yuit

More car loans have been given out here in 2024, including those for electric vehicles (EVs), which have surged in numbers in recent years. At the same time, banks and finance companies told The Straits Times there are no signs of borrowers struggling to meet monthly repayments for their car loans. Such loans, however, are unlikely to get any cheaper in the short term despite the sizeable interest rate cut from the United States Federal Reserve.

The latest Department of Statistics data showed that car loan balances reached $10.2 billion in the second quarter of 2024, up 3.8 per cent on the same period in 2023.

This was the second quarter of year-on-year growth after vehicle loan balances began falling in the third quarter of 2021.

Banks and finance companies similarly told ST that they have extended more car loans in 2024.

Ms Jacquelyn Tan, head of group personal financial services at UOB, said the average monthly volume of car loans disbursed by the bank grew by more than 75 per cent between January and August over the same period in 2023.

The take-up volume of UOB's green car loans – these refer to borrowing for an EV – also doubled year on year, she added.

OCBC Bank's head of consumer secured lending, Ms Tok Geok Peng, said the number of car loans has been "steadily increasing", noting that the numbers for the first half of 2024 were more than 30 per cent higher than the same period in 2023.

Ms Tok added that the number of green car loans surged sixfold in 2023 from 2021, the year these loans were introduced.

Green car loans accounted for nearly half the number of new vehicle loans at OCBC in 2023, with Chinese EV brands comprising around 40 per cent of them.

Maybank Singapore and Hong Leong Finance have also seen an uptick in car loan numbers.

Mr Alan Yet, head of consumer finance at Maybank Singapore, said about 30 per cent are for EVs.