Singapore Auto Finance Market Size and Forecast (2019-2030)
Description
Executive Summary
The Singapore auto finance market exhibited fluctuating trends in 2023, with a slight year-on-year (Y-o-Y) revenue decline of -0.18% compared to 2022. This downturn was primarily driven by a significant -9.12% decrease in motor vehicle sales, further impacted by reduced luxury car registrations.
Despite these challenges, the market is experiencing notable growth in the electric vehicle (EV) segment, with EVs accounting for 18.1% of new car sales in 2023. This upward trend is supported by government initiatives, including rebates for EV purchases and the Early EV Adoption Incentive, which are expected to boost demand for EV financing products in the coming years.
High Vehicle Costs Impact Market Performance
Consumer financing remains prevalent in Singapore, with approximately 85% to 90% of vehicles being purchased through loans. Lenders typically finance up to 60% of the purchase price for vehicles with an open market value (OMV) above SGD 20,000. The growing demand for high-value and luxury vehicles, along with attractive loan conditions, has also contributed to the market's growth.
Regulatory constraints, including loan-to-value (LTV) and loan tenure limitations, along with challenges such as the high cost of ownership and the impending ban on new diesel vehicles from 2025, present hurdles for the market. Nonetheless, the increasing adoption of EVs, the shift towards ride-hailing services, and the expansion of digital lending platforms are expected to offer growth opportunities for auto financing solutions in Singapore.
Shifting Trends Toward a Car-Lite Society
Additionally, approximately one-third of Singaporean and permanent resident households owned cars in 2023, a decline from 40% in 2013, as the government promotes a shift toward a car-lite society. To support this transition, the government allocates over USD 2 billion annually in public transport subsidies, effectively reducing costs by more than USD 1 per journey. Efforts are also being made to enhance first- and last-mile connectivity through walking, cycling, and improved access to point-to-point services like taxis, private-hire vehicles, and car-sharing platforms.
The government’s push toward a car-lite society, coupled with increased public transport subsidies and enhanced alternatives like car-sharing and private-hire services, is resulting in a reduction of demand for car ownership. This shift negatively impacts the auto finance market, as fewer households seek car loans or leasing services. However, the growing demand for EVs and the increasing adoption of ride-hailing services are expected to provide growth opportunities for auto finance in the future.
Motor vehicle loans dominate Singapore's auto finance market, significantly outpacing loans for motorcycles and scooters. This disparity stems from the relatively lower motorcycle ownership compared to cars in the country. Car ownership in Singapore is notably expensive, with the cost of the Certificate of Entitlement (COE) often surpassing the price of the car itself. Consequently, new vehicles are unaffordable for many consumers, leading to a higher preference for car loans over loans for motorcycles and scooters.
Future Outlook of Singapore Auto Finance Market:
The Singapore auto finance market is set to experience steady growth, fueled by increasing electric vehicle (EV) sales and supportive government policies. Government efforts to accelerate the adoption of electric vehicles (EVs) will be a key factor in the market’s expansion. The Land Transport Master Plan emphasizes sustainable transport solutions, aiming for the installation of 60,000 EV charging points by 2030, with 2,000 HDB car parks set to feature EV charging stations by 2025. These initiatives are expected to boost demand for customized financing options, particularly for EVs, as more consumers make the shift to environmentally friendly vehicles.
The increasing number of private hire vehicles highlights the growing demand for private transportation services, which is expected to play a significant role in the market’s expansion. Moreover, Singapore’s ambition to transition all vehicles to cleaner energy by 2040 will transform the industry. Policies such as banning new diesel car and taxi registrations from 2025 and requiring all newly registered vehicles to meet cleaner energy standards by 2030 will drive innovation in financing solutions, offering incentives and lower interest rates for EV purchases. These efforts to promote sustainable transport will continue to support the growth of the auto finance market.
Scope of Singapore Auto Finance Market Report:
Makreo Research has recently published a comprehensive analysis titled “Singapore Auto Finance Market Size and Forecast (2019-2030) – Analysis by Vehicle Type, Lender Type, Loan Type, Loan Tenure, Fuel Type, and Growth Opportunities.” This report provides an in-depth examination of the historical performance and current state of the Singapore auto finance market, identifying key factors that will shape its future growth. It begins with an analysis of Singapore’s economy, policies, geography, and demographics, highlighting how these elements impact the market. The report then explores the performance of the vehicle market and trends in car ownership, offering detailed insights into various market segments. Following this, it provides an extensive analysis of the auto finance market, profiling key players, their financials, recent business activities, and evaluating the competitive landscape.
Additionally, the report offers a forward-looking view of the market, identifying both challenges and opportunities. Overall, this research equips stakeholders with a thorough understanding of the current market conditions, future growth potential, and strategic decision-making opportunities in the Singapore auto finance market.
Period of Study:
This section details the market comparison and share of key players in Singapore auto finance market, highlighting recent investments, mergers and acquisitions (M&A), and funding activities. It also includes detailed profiles of selected industry players.
Companies Covered:
The Singapore auto finance market exhibited fluctuating trends in 2023, with a slight year-on-year (Y-o-Y) revenue decline of -0.18% compared to 2022. This downturn was primarily driven by a significant -9.12% decrease in motor vehicle sales, further impacted by reduced luxury car registrations.
Despite these challenges, the market is experiencing notable growth in the electric vehicle (EV) segment, with EVs accounting for 18.1% of new car sales in 2023. This upward trend is supported by government initiatives, including rebates for EV purchases and the Early EV Adoption Incentive, which are expected to boost demand for EV financing products in the coming years.
High Vehicle Costs Impact Market Performance
- Singapore has one of the highest vehicle ownership costs globally due to high Certificate of Entitlement (COE) prices, additional registration fees, and taxes.
- In 2023, a 22.68% increase in COE prices and higher taxes on luxury vehicles further pressured the market.
- Despite these challenges, rising demand for electric vehicles (EVs) and the government’s ambitious EV adoption goals signal positive prospects for the future.
Consumer financing remains prevalent in Singapore, with approximately 85% to 90% of vehicles being purchased through loans. Lenders typically finance up to 60% of the purchase price for vehicles with an open market value (OMV) above SGD 20,000. The growing demand for high-value and luxury vehicles, along with attractive loan conditions, has also contributed to the market's growth.
Regulatory constraints, including loan-to-value (LTV) and loan tenure limitations, along with challenges such as the high cost of ownership and the impending ban on new diesel vehicles from 2025, present hurdles for the market. Nonetheless, the increasing adoption of EVs, the shift towards ride-hailing services, and the expansion of digital lending platforms are expected to offer growth opportunities for auto financing solutions in Singapore.
Shifting Trends Toward a Car-Lite Society
Additionally, approximately one-third of Singaporean and permanent resident households owned cars in 2023, a decline from 40% in 2013, as the government promotes a shift toward a car-lite society. To support this transition, the government allocates over USD 2 billion annually in public transport subsidies, effectively reducing costs by more than USD 1 per journey. Efforts are also being made to enhance first- and last-mile connectivity through walking, cycling, and improved access to point-to-point services like taxis, private-hire vehicles, and car-sharing platforms.
The government’s push toward a car-lite society, coupled with increased public transport subsidies and enhanced alternatives like car-sharing and private-hire services, is resulting in a reduction of demand for car ownership. This shift negatively impacts the auto finance market, as fewer households seek car loans or leasing services. However, the growing demand for EVs and the increasing adoption of ride-hailing services are expected to provide growth opportunities for auto finance in the future.
Motor vehicle loans dominate Singapore's auto finance market, significantly outpacing loans for motorcycles and scooters. This disparity stems from the relatively lower motorcycle ownership compared to cars in the country. Car ownership in Singapore is notably expensive, with the cost of the Certificate of Entitlement (COE) often surpassing the price of the car itself. Consequently, new vehicles are unaffordable for many consumers, leading to a higher preference for car loans over loans for motorcycles and scooters.
Future Outlook of Singapore Auto Finance Market:
The Singapore auto finance market is set to experience steady growth, fueled by increasing electric vehicle (EV) sales and supportive government policies. Government efforts to accelerate the adoption of electric vehicles (EVs) will be a key factor in the market’s expansion. The Land Transport Master Plan emphasizes sustainable transport solutions, aiming for the installation of 60,000 EV charging points by 2030, with 2,000 HDB car parks set to feature EV charging stations by 2025. These initiatives are expected to boost demand for customized financing options, particularly for EVs, as more consumers make the shift to environmentally friendly vehicles.
The increasing number of private hire vehicles highlights the growing demand for private transportation services, which is expected to play a significant role in the market’s expansion. Moreover, Singapore’s ambition to transition all vehicles to cleaner energy by 2040 will transform the industry. Policies such as banning new diesel car and taxi registrations from 2025 and requiring all newly registered vehicles to meet cleaner energy standards by 2030 will drive innovation in financing solutions, offering incentives and lower interest rates for EV purchases. These efforts to promote sustainable transport will continue to support the growth of the auto finance market.
Scope of Singapore Auto Finance Market Report:
Makreo Research has recently published a comprehensive analysis titled “Singapore Auto Finance Market Size and Forecast (2019-2030) – Analysis by Vehicle Type, Lender Type, Loan Type, Loan Tenure, Fuel Type, and Growth Opportunities.” This report provides an in-depth examination of the historical performance and current state of the Singapore auto finance market, identifying key factors that will shape its future growth. It begins with an analysis of Singapore’s economy, policies, geography, and demographics, highlighting how these elements impact the market. The report then explores the performance of the vehicle market and trends in car ownership, offering detailed insights into various market segments. Following this, it provides an extensive analysis of the auto finance market, profiling key players, their financials, recent business activities, and evaluating the competitive landscape.
Additionally, the report offers a forward-looking view of the market, identifying both challenges and opportunities. Overall, this research equips stakeholders with a thorough understanding of the current market conditions, future growth potential, and strategic decision-making opportunities in the Singapore auto finance market.
Period of Study:
- 2019 - 2023: Past and Present Scenario
- 2023: Base year of study
- 2024 – 2030: Future Outlook
- By Type of Vehicle Financed
- By Lender Type
- By Type of Loan
- By Loan Tenure
- By Fuel Type
This section details the market comparison and share of key players in Singapore auto finance market, highlighting recent investments, mergers and acquisitions (M&A), and funding activities. It also includes detailed profiles of selected industry players.
Companies Covered:
- Maybank Singapore Limited
- Guan Chao Holdings Limited (VINCAR)
- OCBC Bank Limited
- Hong Leong Finance
- Speed Credit Pte Ltd.
- Valuemax Group Limited.
- Standard Chartered Bank
- Sing Investments & Finance Limited
- Singapura Finance Ltd (SFL)
- United Overseas Bank Limited
- Development Bank of Singapore Limited
- Trusty Cars Pte Ltd (Carro)
- Toyota Financial Services Singapore (TFSSG)
- MoneyMax Financial Services Ltd.
- What is the historical and current performance of Singapore's auto finance market?
- What are the recent trends in Singapore vehicle sales?
- What is the state of Singapore's EV market, and how does it compare globally?
- Which car brands are popular, and what are the sales trends by fuel type? How does the COE influence car ownership?
- Which financial institutions lead the market, and what are the levels of household debt and loans as a percentage of GDP?
- Who are the top players in Singapore’s auto finance market?
- How do major players compare on key performance metrics?
- What mergers and acquisitions have shaped the market's development?
- What challenges does the auto finance market face in Singapore?
- What opportunities and growth prospects exist for the market?
Table of Contents
152 Pages
- 1. Research Methodology
- 1.1. Research Objective
- 1.2. Research Design and Procedure
- 1.3. Data Collection Methods
- 1.4. Research Methodology
- 1.5. Analytical Framework
- 2. Singapore EPTD (Economic, Political, Technology, Demographic) Analysis
- 2.1. EPTD Analysis: An Overview
- 2.2. EPTD Analysis: Singapore Economic Overview
- 2.3. EPTD Analysis: Singapore Political Overview
- 2.4. EPTD Analysis: Singapore Technological Overview
- 2.5. EPTD Analysis: Singapore Demographic Overview
- 3. Singapore Motor Vehicle Facts
- 3.1. Singapore Total Motor Vehicle Population
- 3.2. Singapore Motor Vehicle Sales Volume
- 3.3. Singapore Motorcycles and Scooters Sales Volume
- 3.4. Singapore Motor Vehicle Sales Value
- 3.5. Singapore Best Selling Car Brands
- 3.6. Singapore Car Registrations by Fuel Type
- 3.7. Singapore Electric Vehicle Market
- 3.8. Singapore Private Hire Cars Population
- 3.9. Singapore Public Transport Infrastructure
- 4. Singapore Auto Finance Market- Past and Present Performance
- 4.1. Singapore Auto Finance Market: An Overview
- 4.2. Singapore Financial Institutions Directory
- 4.3. Singapore Household Debt, Loans and Debt Securities as a % of GDP
- 4.4. Singapore Consumer Lending as a % of GDP
- 4.5. Singapore Consumer Car Loans and Advances To Residents
- 4.6. Singapore Vehicle Loan Interest Rate
- 4.7. Singapore Vehicle Ownership
- 4.8. Singapore Certificate of Entitlement (COE)
- 4.8.1. Singapore Average COE Prices
- 4.9. Singapore Auto Finance Market Past and Present Performance
- 5. Singapore Auto Finance Market Segmentation
- 5.1. Singapore Auto Finance Market Segmentation
- 5.1.1. Singapore Auto Finance Market Segmentation: by Type of Vehicle Financed
- 5.1.2. Singapore Auto Finance Market Segmentation: by Lender Type (NBFC, Captives, Banks)
- 5.1.3. Singapore Auto Finance Market Segmentation: by Type of Loan
- 5.1.4. Singapore Auto Finance Market Segmentation: by Loan Tenure
- 5.1.5. Singapore Auto Finance Market Segmentation: by Fuel Type
- 6. Singapore Auto Finance Market Competitive Landscape
- 6.1. Singapore Auto Finance Competition by Type of Financial Services Providers
- 6.1.1. Comparative Analysis of Key Players – Auto Finance Market Share (%)
- 6.1.2. Comparative Analysis of Key Players – Loans Market Share (%)
- 6.2. Singapore Auto Finance Market Competition by Loan Criterion
- 6.3. Comparative Analysis of Key Players – Loan to Deposit Ratio (LDR)
- 7. Singapore Auto Finance Market Mergers /Acquisitions/ Investments/Divestments and Funding Timeline
- 7.1. Market Mergers /Acquisitions/ Investments/ Disinvestments
- 7.2. Funding Timeline
- 8. Singapore Auto Finance Market Company Profiles
- 8.1. Company Profile: Maybank Singapore Limited
- 8.2. Company Profile: Guan Chao Holdings Limited (VINCAR)
- 8.3. Company Profile: OCBC Bank Limited
- 8.4. Company Profile: Hong Leong Finance
- 8.5. Company Profile: Speed Credit Pte Ltd.
- 8.6. Company Profile: Valuemax Group Limited.
- 8.7. Company Profile: Standard Chartered Bank
- 8.8. Company Profile: Sing Investments & Finance Limited
- 8.9. Company Profile: Singapura Finance Ltd (SFL)
- 8.10. Company Profile: United Overseas Bank Limited
- 8.11. Company Profile: Development Bank of Singapore Limited
- 8.12. Company Profile: Trusty Cars Pte Ltd (Carro)
- 8.13. Company Profile: Toyota Financial Services Singapore (TFSSG)
- 8.14. Company Profile: MoneyMax Financial Services Ltd.
- 9. Singapore Auto Finance Market Challenges
- 9.1. Singapore Auto Finance Market Challenges
- 10. Singapore Auto Finance Market Future Outlook & Opportunities
- 10.1. Singapore Auto Finance Market: Future Outlook
- 10.2. Singapore Auto Finance Market Opportunities
- Analyst Recommendations
- Limitations of the Study
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