For each individual, it has become legitimate to register those private cars which are to be used as rental cars in order to exempt from the car-financing rules. (Rule change allows access to bigger loans for car buyers, Aug 18).
Private-Hire Cars (PHCs) are a broad category and Rental cars are a part of it, which are used by companies and individuals for reward and hire.
The MAS, Monetary Authority of Singapore, exempts the purchase of Private-Hire Cars from the car-financing rules so that those who rely on the use of PHCs for their livelihoods and business, do not constrain credit to companies and individuals.
On the contrary, by registering private cars as rental cars, individuals who exploit the PHC exemption, with no intent of a genuine business being run by them are deemed to be evading the car-financing rules. This is neither legitimate nor above board.
MAS has taken a serious view of attempts to evade the car-financing rules. Moreover, individuals should not do such acts. Whoever does so is liable for higher charges collated with purchasing private car. PHC owners shall pay higher interest rates on car loans and higher premiums on commercial car insurance.
MAS has been looking into measures to restrain circumvention of car-financing rules.
The over-indebtedness creates distress for borrower and his/her family, which is why MAS needs individuals, ensured of the fact that they can afford the debt which they are going to take on to finance their major purchases like cars, as only the sensible use of credit would help financing a house or transport needs.