The Singapore auto finance market is strategically positioned at the intersection of digital banking transformation and shifting consumer mobility preferences. As of 2025, over 54% of private car buyers in Singapore opt for financing. Notably, used car transactions now account for 62% of total financed units, highlighting a growing shift toward affordability and flexibility in ownership models. With digital banks like Trust Bank onboarding over 1 million users within 16 months of launch, the market is at the cusp of significant transformation. This evolving landscape reflects a compelling mix of financial prudence, digital disruption, and new-age vehicle ownership preferences, making Singapore’s auto finance sector a market to watch.
What’s Driving Auto Finance Market in Singapore?
- The rapid EV adoption is fuelling growth in green‑specific auto loans, creating a new lending category that aligns sustainability goals with customer credit needs. Financing green vehicles is now a strategic focus as lenders are offering preferential interest rates which is often 2.5–3% p.a. and exclusive green-loan packages to tap into rising consumer demand.
- Elevated COE prices are boosting demand for creative financing options, renewal loans, extended-term financing, and subscription models to reduce the immediate financial burden on car owners. Many consumers now prefer longer-term loans or leasing to spread out COE renewals and avoid hefty lump-sum payments.
- In 2024, average interest rates were 6.35% for new vehicles compared to 11.6% for used cars. This rate gap highlight that consumers often opt for shorter tenures on used cars to avoid high-rate burdens, while new-car buyers benefit from better spreads and lower default risk. High used-car loan rates are prompting lenders to innovate bundle insurance, adjust risk algorithms, or offer hybrid financing.
Competitive Landscape
The Singapore auto finance market is marked by a dynamic interplay between established banks, agile non-bank financial companies, and rapidly growing digital challengers. The major players dominating the market includes DBS Bank, OCBC Bank, and Trust Bank. DBS continues to lead Singapore’s green auto loan segment. As of 2024, bank has maintained strong partnerships with EV dealers and offers one of the lowest interest rates for green car loans, starting at approximately 2.5% per annum. OCBC has scaled up its auto financing offerings through digital optimization and strategic tie-ups. It has emphasized ESG-aligned loans and increased its automotive credit portfolio, as shown by a 13% year-on-year growth in auto loan origination through digital channels. Meanwhile in 2025, Trust bank had crossed 1 million customers, becoming the fourth-largest retail bank in Singapore by user base.
Sky-High COE Premiums & Affordability Pressure
The Singapore auto finance market is witnessing a major challenge of sky-high COE premiums. In 2025, the average COE price for Category A (cars ≤ 1,600 cc) was S$98,124, while Category B (larger vehicles) reached S$116,670. With COE costs in the six figures, consumers often turn to extended loan tenures, leasing, or subscription models strategies that further complicate lenders’ credit risk and increase long-term interest exposure. Even minor fluctuation in interest rates or COE premiums can disproportionately affect monthly repayment burdens, increasing the chance of loan default or non-renewal at the end of tenure.
Future Outlook
The Singapore auto finance market is set to experience rapid growth, shifting from conventional credit issuance to a future defined by sustainability, digitization, and flexible mobility. By 2030, green car loans are projected to account for more than 50% of all new vehicle financing, as lenders prioritize ESG-compliant lending portfolios. Electric vehicles are expected to comprise 80% of the total vehicle stock by 2040, reinforcing the need for specialized green financing products. Digitization of the loan process is accelerating. By 2030, over 75% of all vehicle loans are expected to originate via embedded digital channels, such as dealer apps, fintech marketplaces, and manufacturer websites. Singapore is emerging as a central hub for regional auto financing innovation. By 2030, cross-border mobility financing platforms will likely offer EV loans, insurance, and fleet financing bundled at scale across ASEAN, especially in urban centers like Jakarta, Manila, and Bangkok.
Consultant at Nexdigm In their latest publication “Singapore Auto Finance Market Outlook to 2030: By Vehicle Type (New Vehicles, Used Vehicles, Electric Vehicles), By Loan Type (Traditional Auto Loans, COE Renewal Loans, Green Auto Loans, Balloon Payment & Step-up Loans), and By Ownership Model (Outright Purchase, Leasing, Subscription Models)” believe that by designing specialised EV loan products and by preparing cross-border loan servicing frameworks for regional expansion, businesses can gain competitive advantage in Singapore auto finance market.