The Monetary Authority of Singapore (MAS) imposed restrictions on motor vehicle loans effective Tuesday, a move that may check the rising cost of owning a car in the city-state.
Consumers are now limited to borrowing up to 60 per cent of the price of vehicles with open market values (OMV) of less than $20,000.
Should the OMV exceed $20,000, the maximum loan allowed has been lowered to 50 per cent.
MAS has also restricted the tenure for a vehicle loan to five years, compared to the current length of up to ten years.
The moves are designed to breed prudence and to safeguard consumers from “over-extending themselves in this prolonged environment of very low interest rates", the MAS said in a statement Monday.
Commercial vehicles and motorcycles are exempt from the restrictions.
The move of the Singapore central bank is expected to dampen demand for cars and hence the demand for Certificates of Entitlement, prices of which have hit record highs over the past year.
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