Show The Private-Hire Purchase scheme from Cycle & Carriage could turn your car into an income-generating asset, with 90% loans payable over 10 years
SINGAPORE — What’s the next best thing to owning a car? As things go in Singapore, the answer might well be: owning a company that owns one. Some car dealers have begun to roll out loans built around that structure, which offers two tantalising prospects: bypassing the 30 to 40 percent downpayment needed to finance a new car, and using the car as an income-generating asset that pays for itself. Here’s what you need to know: What’s the deal in a nutshell? Why bother? This private-hire stuff lets you bypass that, and finance companies are offering 90 percent loans (meaning your down payment is 10 percent) and a 10-year tenure. How about some examples? Under a normal loan the downpayment is $28,800, with a monthly repayment of $945. With PHP, the downpayment is $9,600, and the balance comes to $1,007 a month for 10 years. Wait, why is the monthly
payment higher? Isn’t this just a way for the cash-poor to tiptoe around the 30 percent hurdle? How so? OK, now I’m interested. How does a Kia pay for itself? So this is just something for Uber drivers What are the downsides? But all costs of running the car can be expensed. Fuel, insurance, loan payments, servicing and repairs are all legitimate expenses. On the flipside, if your car makes a profit, you pay taxes on it. Seems fair to us. Isn’t it simpler just to rent a car? The set-up part shouldn’t be, anyway. C&C and other dealers who offer this kind of financing say they also help customers with all the paperwork. Besides, there’s one important advantage of using an investment vehicle to own an actual vehicle. Which is? But strictly speaking, the PHP structure means your company owes money for the car, so it doesn’t impact your own TDSR. For every $1,000 in car debt you service every month, you could actually be denying yourself nearly $300,000 in a housing loan. Woah, that’s a lot! Instead, if you have flexible working hours and can drive for Uber or Grab, you can use the income to pay off what is essentially your personal car. And if you have better things to do with cash, you don’t have to tie it up with a down payment. If any of that make sense to you, owning a company that owns a car might turn out to be better than owning a car yourself, after all. Can I get a car with no down payment?A zero-down payment Car Loan is when the bank offers to pay the entire value of the car as part of the loan. For example, HDFC Bank offers up to 100% finance on its Car Loans. That essentially is a zero-down payment Car Loan.
Can I get a car with 500 credit score with noIt's possible to get a car loan with a credit score of 500, but it'll cost you. People with credit scores of 500 or lower received an average rate of 13.97% for new-car loans and 20.67% for used-car loans in the second quarter of 2020, according to the Experian State of the Automotive Finance Market report.
What credit score do you need for no down payment car?Not only might you need to have a decent-to-good credit score to secure a no-money-down loan, but having a good credit score (at least 680 points) is also the best way to prevent a lender from increasing the interest rate they would've given you on a conventional loan.
What is the lowest down payment for a car?In the past, the required down payment on a car was often 20% for new and used vehicles. In recent years, however, drivers have been putting less money down, with requirements as low as 9%.
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