A slow CNY for used-car dealers
SALES are typically brisk during Chinese New Year, but used-car dealers say that its more like the ghost month this year.
A MyPaper check last Tuesday at Automobile Megamart in Ubi, which houses 90 used-car showrooms, found few customers.
Those who did show up made brief inquiries, peered into the cars, then walked away.
This, said traders, is not the typical scene on a weekday two weeks before Chinese New Year.
"What Chinese New Year? This looks more like the seventh month," said a 31-year-old dealer, referring to the Hungry Ghost Festival, generally seen as inauspicious.
The dealer, who has been in the trade for seven years, has sold three used cars over the past month, down from 10 during the same period last year.
He did not want to be named.
This gloomy scene is typical in the used-car industry now, said Mr Neo Tiam Ting, president of the Singapore Vehicle Traders Association.
He estimated that sales have dropped by an average of 40 per cent in the used-car industry since loan curbs by the Monetary Authority of Singapore kicked in on Feb 25 last year.
Buyers of both new and used cars can get a loan of up to only 60 per cent now, down from 100 per cent. The loan period is also capped at five years, down from 10 years.
But the used-car market is hit harder than the new-car market because, typically, more buyers in the used-car market take full loans as long as they can afford the monthly instalments.
There have been casualties.
After the new rules kicked in at Automobile Megamart, about 20 used-car showrooms there have shut down. Even a cafe there threw in the towel.
It is a similar situation at Turf City in Bukit Timah, where about 10 of the 100-odd used-car showrooms have closed.
One car sales consultant at Automobile Megamart has even sold her own car to try to stay afloat.
The dealer used to sell seven or eight cars per month. She now sells an average of one.
She said: "My basic pay isn't much. I depend on commissions from car sales".
Her customers are now cash-rich older folk, she added.
And it does not look like throwing advertising dollars at the problem will help.
A dealer at Turf City who has tried slashing prices by thousands of dollars, and dangling goodies like free tyres, has done so in vain. The 34-year-old with 10 years of experience in the industry, who wanted to be known only as Mr Tan, said of buyers: "With their means of finance cut off, they simply cannot afford the down payment."
One such buyer, Ms Azzah Amir, 26, was all set to buy a bigger car.
But the new rules meant that the teacher could no longer afford one. She and her husband are waiting for things to change.
She said: "As a young couple, no matter how much we save, there's no way we can afford to pay $50,000 in cash for the down payment when we have to think of our flat and our baby."