Friday, 15 December 2017

Buying a car? Here’s the best deals on car loans in Singapore for you

With public transport in Singapore being a letdown in recent years (who’s tired of hearing SMRT announce a “track fault” by now? I sure am!), I take back my words from 2015 when I wrote about how ditching the car could make you a multi-millionaire (assuming you took your monthly vehicle expenses and invested it instead). 

As we progress in life and start a family, the benefits offered by a car cannot always be measured in monetary terms. Although I would disagree with the need to get a car just to keep up with the Joneses, it is hard to argue against the convenience and reliability it offers (in contrast to the frustration we commuters face from train breakdowns today).
But before you choose your car, it is vital to consider if you have the financial resources to pay for it. Obviously getting a car will be akin to taking up another “financial bomb” (the others being a wedding, a house, a child, etc) and most of us commonfolks will find it difificult to afford a car on simply our savings and salary alone. Hence, we’ll need to get a car loan, and you’d want to find the best deal while you’re at it.

Important things to know about car loans

Since May 2016, MAS regulations now allow banks to give 70% financing for cars with an Open Market Value (OMV) of less than or equal to S$20,000, and 60% for vehicles with OMV more than S$20,000. Assuming your car’s OMV is less than S$20,000 and your car costs S$75,000, then a bank will give you a maximum of S$52,500 as loan. The remaining amount – S$22,500 will then have to be paid from your own pocket.
Do also note that the maximum tenure of a car loan is 7 years with any bank. So before you decide to take a loan, make sure that you can afford to make repayments on the loan, without any late payments or defaults.
My husband and I will be getting a car this year, and these were some of the best car loans we looked at:

The best car loan deals

1. DBS Car Loan

DBS is offering a special interest rate of 2.28% (flat rate) and 4.29% (EIR) for online applications of new car loans up to 31 January 2018. For offline applications, the interest rate is pegged at 2.78% p.a. (flat rate). You can buy both new and used cars through DBS fundings, and don’t forget to get your free credit report while you’re at it!

2. OCBC Car Loan

OCBC offers new car loans at a flat interest rate of 2.78% (EIR of 5.09% to 5.27% p.a.). For used car loans, the rate is 2.98% (EIR of 5.46% to 5.64% p.a.).
If you are thinking of refinancing your existing car loan, OCBC will give you 100% loan transfer and a flat interest rate of 2.08% (EIR of 4.03% to 4.52% p.a.). Find out more here.

3. UOB Car Loan

UOB has a unique loan plan called the UOB HP50 Car Loan with a five-year tenure. This product allows you to pay just half of your monthly instalment amount for a limited period in case you need greater cashflow at the moment. You’ll now be able to enjoy this half-payment for 59 months, and in the 60th month (the end of the tenure), you can either pay the remaining amount and claim your vehicle for your own, or sell your car in the market or to the dealer.
For new cars, the flat interest rate is 2.78% (EIR 5.32% to 6.03% p.a.) whereas for second-hand cars, the rate is 2.98% (EIR 5.68% - 6.46%).
If you’re applying for this loan before 31 January 2018, UOB has an existing promotion where you could stand a chance to win SPC vouchers or even an entire year worth of petrol.

4. Hong Leong Finance Car Loan

HLF also has both new car loans and used car loans. The interest rates are similar to those offered by UOB at flat 2.78% p.a. and 2.98% p.a., respectively. Find out more here.

5. Maybank Car Loan

Maybank also offers both new and used car loans. The interest rate starts from 3.25% p.a.
Car loan
Flat rate
EIR
DBS Car Loan (New)
2.28% (limited period only)
4.29% (limited period only)
OCBC Car Loan (New)
2.78%
5.09% to 5.27%
OCBC Car Loan (Used)
2.98%
5.46% to 5.64%
UOB Car Loan (HP50)
2.78%
5.32% to 6.03%
UOB Car Loan (Used)
2.98%
5.68% to 6.46%
HLF Car Loan (New)
2.78%
NA
HLF Car Loan (Used)
2.98%
NA
Maybank Car Loan
3.25%
NA
*Figures provided by BankBazaar.sg

Should I choose a dealer loan or bank loan?

This question is often posed across forums and in the context of our discussion, it is an important consideration to address. The average car loan interest rate currently offered by banks in Singapore hovers around the 2.78% mark. However, the interest rate will change as per the repayment period.
Car dealers do things differently – some have tie-ups with banks while some offer their own independent financing options to buyers. When choosing a dealer, it all comes down to what car manufacturer you choose. Honda and Toyota, as we know it, are the biggest players in the market, accounting for over 40% of new car registrations. So buying a Honda or a Toyota and choosing a dealer-financed option will most likely give you a lower interest rate compared to other brands like Nissan and Mazda (which are of course popular too, just maybe not as much) which provide dealer-financed loan options.
So how do dealer loans compare with that offered by banks? Well, for one, interest rates offered by dealers tend to be higher than banks. But the benefit with dealerships is that they often offer lower monthly repayment options and longer tenures. So coming back to what choice is economically ideal, choosing a bank will automatically eliminate the middleman in the equation, which of course is the dealer in this situation.
Dealerships entice customers with lower monthly payments. But in reality, you’d be paying more interest on longer tenures with dealers, than what you would if you’d taken your loan with a bank. Most importantly, there are times when banks run attractive loan promotions for car loans and if you’re lucky / resourceful enough, you might be able to snag a deal at an even lower rate.
For those of you who already have cars, did you go for a dealer or bank loan? Do let me know in the comments below! 
Disclaimer: This post was written in collaboration with BankBazaar.sg. All opinions are of my own.


Tuesday, 12 December 2017

Best Cashback Credit Cards to get for 2018

If someone came up to you to offer you free cash on the money you're already spending every month, would you say no?

I didn't think so either. Everyone needs a good cash back credit card, period.

If you're still paying via NETS / your debit card, it is high time you embraced the cash back rewards that credit cards have to offer!

I previously revealed the cards I have in my wallet during the live debate last week, but also shared a first glimpse into the spreadsheet I've been working on which captures the best cashback credit cards to move into 2018 with. A number of you have emailed me to ask for that list, so here are the best ones I've shortlisted:


Legend:
Yellow - best in category
Green - second-best

If you're signing up for any of these cards, don't forget to indicate here that you're a Budget Babe reader so you can get additional free cash vouchers.

Battle of the Cashback credit cards



UOB One Card

Folks with a UOB One account should definitely get the UOB One, which is a fantastic cash-back card through and through, while helping you chalk up higher interest on your savings as well. If you're having a large purchase coming up, you'll probably benefit the most from getting a 5% cashback out of this card ($2000 monthly spend).

Read my previous review of the UOB One account here.

Note: Some readers have commented that they've faced long waiting periods for approval of their card application, of about 3 weeks to 2 months. Nonetheless, good cards are worth waiting for.






Standard Chartered Unlimited Cashback / AMEX True Cashback 



This is an easy and fuss-free credit card to hold, as it gives you 1.5% on all spend without any minimum or maximum limits, nor does it set caps by categories.

For the lazy folks who don't wish to manage multiple cash back credit cards in your wallet, this would be the best bet. Alternatively, you can also get the AMEX True Cashback Card, although that's accepted by fewer merchants in contrast to SCB's MasterCard.




Bank of China Family Card

This is a really fabulous card for online and dining. Moreover, if you're already on the BOC SmartSaver program (read my review here), this card can help you to get higher interest rates on your savings.




Citi Cash Back Visa Card

If you drive and dine out often, then you'll probably want to keep this card close as it is best for dining and petrol (up to 20.88% fuel savings at Esso and Shell). Or if you're frequently booking rides on the Grab app, this card also gives you 8% cash back for that, provided you're able to hit the minimum monthly card spend of $888. 

You can also get extra $125 Grab or NTUC vouchers by signing up here.




OCBC 365

This card has been talked to death as it has been around for a really long time, but if you're on the OCBC 360 account, you'll probably have to get this to maximise your savings interest rate. It also offers a relatively high dining cash back rate, and free travel insurance when you book your flights with this card.





UOB Yolo Card



The best use of this card would be for its 1-for-1 movie tickets at Cathay Cineplex, as well as the free Grab ride every weekend if you manage to meet the transaction spend in that preceding week. Use it for your weekend dining and entertainment.





OCBC Frank Credit Card

This was one of my very first credit cards, and I feel it is one that is often overlooked because no one really talks much about it online. The truth is, this is a really fantastic card with a 6% online shopping rebate which includes Grab and Uber rides. You'll also get 3% to 5% cash back on your movies, karaoke sessions and major coffee chains, including Starbucks and Coffee Bean.

And yes, you can use this to clock higher interest saving rates on your OCBC 360 account! In my opinion, this card is much more superior to OCBC 365 if your spending behaviour fits into what I've described above. The minimum spend is also much lower at $400 per month.




Citibank SMRT Card

Best for travelling on public transport and for groceries (across various places including Fairprice, Giant and Sheng Siong. This is broader, unlike the POSB Everyday Card which limits you to only Sheng Shiong supermarkets).

You can also get extra $125 Grab or NTUC vouchers by signing up here.





CIMB Platinum Mastercard

Get up to 10% cash rebate for specific categories. Travel, health and beauty on CIMB Platinum Mastercard, or go for the CIMB Visa Signature if you dine out considerably often.

I quite like this card for how it allows you to enjoy rebates even on your hospital / doctor / dentist / optometrist / pharmacies / spas / hairdresser bills. Not many cards offer this privilege.

You'll need to spend at least $500 in a month - consisting of at least 8 transactions of $30 or more - in order to enjoy the 10% cash rebate, so this warrants a bit more tracking than I'd like to have. Do also note that the maximum rebate is capped at $60 every month.

Sidenote

A few readers have highlighted specific cards to ask why they weren't included in this list. For clarity, the following cards were also examined but I felt that they either paled in comparison to the other cards here, or they had limited utility to warrant a permanent place in our wallets.

Some of the other cards reviewed were:
- SCB Manhattan card (paled in comparison to UOB One)
- DBS Live Fresh card (paled in comparison to OCBC Frank)
- HSBC Advance (a number of caveats to meet, sits in the middle of what UOB One and SCB / AMEX Unlimited offers)
- POSB Everyday card (limited categories and merchants)
- SCB Singpost card (used to be among the best for online shopping, but changed their T&Cs recently and dropped the cashback rate from 7% to 2%)
- SCB Spree card (seems like a revamp of the SCB Singpost card)



Cash back cards are a great way to get free money

I get a few hundred dollars of cash back every year (and I don't even spend a lot!) easily by maximising my cards this way, and that's not even counting the additional interest I get on my linked-bank account savings... If you play your credit card cash back strategy well, there's a lot of free cash that you can get back on money which you're already spending right now.

Of course, as always, remember to be responsible about your credit card spend and always pay off your bills on time at the end of the month! Otherwise, if you're worried about potentially overspending, then you can consider the DBS Visa Debit Card for its 5% cashback (I've also previously reviewed here).

Are there any other cash back credit cards that I've missed out which you think deserves to be on this list? Let me know!

With love,
Dawn