Despite stabilising COE premiums, car ownership in Singapore remains financially demanding, prompting consumers and lenders alike to revisit vehicle financing strategies.
Standfirst Highlights: • COE Category A remains steady at SGD 101,102 • Category B dips slightly, but car prices still high • Car buyers now turning to flexible loan options • Banks and financial institutions are expected to adjust car loan strategies Car ownership in Singapore continues to be a significant financial challenge, as Certificate of Entitlement (COE) premiums for passenger vehicles remain sky-high. In the July 2025 bidding exercise, Category A COEs stayed flat at SGD 101,102, while Category B dipped just slightly to SGD 119,101
Although there were no drastic price spikes, pressure remains intense, pushing more buyers toward structured auto loans to fund even mass-market car purchases.
COE categories and their impact on vehicle financing
COE category July 2025 premium Vehicle types overed Loan impact
Category A SGD 101,102 Mass-market cars ≤ 1600cc or ≤ 97kW Higher monthly EMI even for basic cars
Category B SGD 119,101 Powerful cars >1600cc or >97kW Longer tenure or higher down payment needed
Category C SGD 68,600 Commercial vehicles May benefit from business vehicle financing
Category D SGD 9,511 Motorcycles Minor impact on personal financing needs
Category E
SGD 120,000 Open category for any type (excl. bikes) Popular for flexible financing and EV options
Why car loans are becoming essential While stable COE prices may signal market equilibrium, the all-in cost of owning a vehicle remains steep. With vehicle prices crossing the SGD 200,000 mark for some models (like
the new BYD Sealion 6), consumers are increasingly dependent on banks and financial institutions to afford even entry-level models. How banks are responding Institutions like DBS, UOB and OCBC are recalibrating auto loan structures to meet demand, with recent trends as follows: • Flexible repayment schemes • Pr eferential rates for electric and hybrid vehicles
• Bundled insurance and loan packages • Higher loan-to-value LTV ratios for new buyers Why car loans matter for consumers In today’s market environment, choosing the right car loan is just as important as selecting the car itself. While stable COE prices may tempt buyers to back into the market, access to affordable, flexible financing remains a make-or-break factor.