The Car Loan Interest Rate Singapore 2025 update has been officially announced, and it is set to impact thousands of car buyers. With COE premiums at record highs and vehicle prices climbing, loan interest rates are now a key factor in deciding whether to buy a car in Singapore.
Banks like DBS, OCBC, and UOB have revised their rates for 2025, reflecting shifts in the financial market and regulatory climate. For new buyers, understanding these changes is critical in calculating monthly repayments and long-term affordability.
Why Car Loan Rates Matter in Singapore
Owning a car in Singapore is one of the most expensive decisions for households. Beyond the COE and purchase price, financing costs can add tens of thousands of dollars to the final bill.
Car loan interest rates determine how much extra buyers pay over the loan tenure. Even a small increase of 0.5% can raise monthly installments by hundreds of dollars. That’s why updates from DBS, OCBC, and UOB are closely watched by consumers and auto dealers.
Current Car Loan Interest Rates in 2025
DBS Bank
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Interest Rate: Around 2.88% p.a.
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Tenure: Up to 7 years
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Special Promo: Green auto loan discounts for EVs and hybrids, lowering effective rates to around 2.65% p.a.
OCBC Bank
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Interest Rate: Around 2.95% p.a.
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Tenure: Up to 7 years
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Exclusive Feature: Flexible repayment plans and early settlement rebates.
UOB Bank
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Interest Rate: Around 3.00% p.a.
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Tenure: Up to 7 years
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Key Highlight: Tailored packages for COE renewals and used cars.
While these rates may appear close, the differences become significant when calculated over large loans—especially given current car prices exceeding S$150,000–S$300,000 with COE.
Example of Loan Repayment in 2025
To illustrate the impact, consider a buyer financing a S$200,000 car (with COE) over 7 years.
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DBS (2.88%): Monthly repayment around S$2,665.
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OCBC (2.95%): Monthly repayment around S$2,680.
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UOB (3.00%): Monthly repayment around S$2,695.
The difference may look small monthly but adds up to nearly S$3,000–5,000 more over the entire loan tenure.
EV and Hybrid Loan Promotions
With Singapore pushing for electric adoption, banks have introduced green auto loans.
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DBS Green Auto Loan: Lower interest for EVs, flexible insurance tie-ups.
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OCBC EV Loan Package: Rebates on charging credits and road tax discounts.
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UOB Green Drive Loan: Bundled with sustainability-linked incentives.
These packages aim to reduce financing costs for buyers switching to eco-friendly cars, making EVs more attractive despite higher upfront COE-related expenses.
Used Car and COE Renewal Loans
Not every buyer opts for a brand-new vehicle. The used car market is booming in 2025 due to high COE premiums.
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DBS: Offers refinancing packages for used cars up to 10 years old.
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OCBC: Provides lower rates for COE renewal loans compared to new loans.
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UOB: Focuses on flexible repayment schedules for second-hand buyers.
These options are crucial as many families shift toward used cars to avoid skyrocketing new car costs.
What Affects Car Loan Rates in 2025
Several factors explain why interest rates are now slightly higher compared to 2024:
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Global Interest Rate Environment – Central banks worldwide raised rates in recent years, influencing local banks.
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Higher Risk Exposure – With rising COE premiums, loan amounts are larger, creating more risk for banks.
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Shift Toward Green Mobility – Banks are using standard rates for petrol cars while offering discounts for EVs, nudging buyers toward sustainability.
Tips for Buyers in 2025
To minimize costs, buyers should:
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Compare Packages: Always compare DBS, OCBC, and UOB before committing.
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Consider Green Loans: EV-focused loans can save thousands.
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Negotiate with Dealers: Many dealers offer bank tie-ups with exclusive discounts.
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Look at Total Cost: Don’t just focus on the car’s price—factor in COE, insurance, road tax, and financing interest.
Market Outlook
Analysts expect rates to remain stable for the rest of 2025. However, if global inflation eases, we could see small reductions by 2026. For now, interest rates just below 3% are the norm, meaning buyers must budget carefully.
With more EVs entering the market and rising demand for affordable financing, banks are likely to continue expanding green car loan promotions in the coming months.
Conclusion
The Car Loan Interest Rate Singapore 2025 update reflects a changing financial landscape. With DBS at 2.88%, OCBC at 2.95%, and UOB at 3.00%, rates are close but impactful over long tenures.
For EV and hybrid buyers, special loan packages provide meaningful savings, while used car and COE renewal loans remain popular alternatives. As car prices continue to rise, comparing interest rates and choosing the right package has never been more important for Singaporeans.
FAQs
What are the current car loan interest rates in Singapore for 2025?
DBS offers about 2.88%, OCBC around 2.95%, and UOB approximately 3.00% per annum.
Which bank offers the cheapest loan package?
DBS currently has the lowest rate, especially for EVs with its green auto loan package.
Are there special loans for EVs and hybrids?
Yes. All three banks—DBS, OCBC, and UOB—offer green auto loans with lower rates and extra perks like charging credits.
Can I get financing for a used car or COE renewal?
Yes. All major banks provide packages for used cars and COE renewals, with OCBC offering the most flexible terms.
Will car loan interest rates rise further in 2025?
Analysts suggest rates will remain steady through 2025, with potential for small decreases if global interest rates fall in 2026.
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