PHC loan loophole closed: what changes for car buyers?
Car buyers could register a car as a private-hire car (PHC) to get around the usual car loan limits, even if they had no intention of providing private-hire services. PHCs were exempt because they were treated as vehicles for commercial use.
That loophole closed on 30 October 2026. Individuals buying PHCs now face the same borrowing limits as other private car buyers.
What buyers need upfront
The new rules cap loans at 70% or 60% of the purchase price, depending on the car’s Open Market Value (OMV), with a maximum term of 7 years.
For a $200,000 car:
| For a $200,000 car | OMV of $20,000 or below | OMV above $20,000 |
|---|---|---|
| Maximum loan share | 70% | 60% |
| Maximum loan amount | $140,000 | $120,000 |
| Minimum down payment | $60,000 | $80,000 |
| Maximum loan term | 7 years | 7 years |
OMV sets the percentage; the purchase price, including relevant taxes and COE, sets the dollar amount. These examples assume maximum loan approval and exclude other upfront costs.
The rules include sole proprietors, loans from financial institutions and licensed or exempt moneylenders, and hire-purchase or conditional sale agreements. They cover sales agreements signed from 30 October; without one, the COE must have been obtained from that date.
Business-owned PHCs, commercial vehicles and motorcycles remain exempt. Existing loans aren’t affected.
Working drivers face the same hurdle
Closing the loophole makes sense, but it also affects people buying a car to earn a living. A driver might afford the monthly repayments yet struggle to produce $60,000 or $80,000 upfront.
NPHVA adviser Yeo Wan Ling raised concerns about access to ownership and greater dependence on rental fleets. I’d want to see whether more working drivers end up renting after this change, and how that affects their costs.
Another reason COE prices could fall
Buyers who relied on the exemption may delay or abandon their purchases. That could reduce COE demand, adding to the case we discussed for lower premiums after the EV rebate deadline.
A quieter market after the year-end registration rush, together with tighter financing, could help buyers who can wait. But the roughly 500 monthly self-drive PHC registrations cited by the authorities aren’t 500 confirmed cancellations. Some buyers may find more cash or choose cheaper cars.
And fleet buyers remain exempt. The size of any COE fall is uncertain (my spreadsheet doesn’t have that power).
Our EV rebate guide explains what waiting could cost in lost incentives. As with the proposed COE reform, compare the complete car price.
Check the financing cost
Ask for the cash due, effective interest rate, total repayments and fees in writing. Our articles on dealer loan commissions and paying cash versus borrowing work through those tradeoffs.
The government may take further steps on in-house loans; this announcement doesn’t establish identical coverage for every arrangement today.
A smaller monthly payment can come from paying for longer. Check the total before deciding the car fits your budget.