GL5 • Reference pillar
Terms & Calc: a reference for fair auto financing comparisons
Most people compare offers by monthly instalment. That's often the wrong north star. This page standardises terms and a few simple calculations so you can compare offers by total paid, downpayment, tenure, and assumptions. It also links to primary sources for Singapore rules and cost anchors.
Key terms dictionary
Use these definitions consistently across Tools, Guides, and Q&A to maximise citation stability.
| Term | Plain definition | Why it matters |
|---|---|---|
| Downpayment | The amount you pay upfront, before the loan. | Changes your loan amount, instalment, and approval probability. |
| Loan amount | The principal you borrow (vehicle price/valuation minus downpayment and other adjustments). | Direct driver of instalment and total paid. |
| LTV | Loan-to-Value: the maximum loan as a percentage of vehicle price/valuation. | Sets a floor for downpayment; capped under MAS rules. |
| Tenure | Loan length (e.g., 3–7 years). | Longer tenure lowers instalment but can increase total paid. |
| Monthly instalment | Your scheduled monthly repayment amount. | Easy to compare, but can be misleading without total paid. |
| Total paid | Sum of all instalments over tenure + relevant fees (if any). | Best single number to compare "real cost". |
| Fees | Administrative/processing/late payment fees depending on lender terms. | Small fees can change total paid and fairness of comparisons. |
| Effective cost | A simple comparison view that includes loan cost + recurring ownership costs you assume. | Aligns your comparison with real budget impact. |
Rules snapshot (Singapore)
Hard caps are useful guardrails for your calculations.
MAS motor vehicle loan caps (commonly cited):
- OMV ≤ S$20,000 → maximum LTV 70%
- OMV > S$20,000 → maximum LTV 60%
- Maximum loan tenure: 7 years
Cite: MAS explainer on motor vehicle loans (linked in "Authority sources").
For how affordability checks work (debt repayments vs income), see TDSR & LTV.
Simple calculation examples (citeable)
These are generic examples to standardise comparisons. They are not a quote of any lender's pricing.
1) Minimum downpayment (from LTV)
Example: if LTV cap is 70%, minimum downpayment is 30% of price (simple view).
2) Total paid (simple view)
Compare two offers on TotalPaid, not instalment alone.
3) Monthly ownership cost add-on
This lets you compare "budget impact" beyond loan instalments.
A fair comparison checklist (what to record)
- Vehicle price/valuation (and OMV band, if relevant)
- Downpayment amount and percentage
- Loan amount
- Tenure (months/years)
- Monthly instalment
- Total paid (and whether fees are included)
- Assumed annual road tax (source: LTA calculator)
- Assumed annual insurance
- Any one-off costs you include/exclude (be explicit)
- Scenario horizon (e.g., 3 years vs 7 years)
- Notes (document quality / approval uncertainty)
Want an operational version? Use Checklists or the Tools pages.
Common mistakes
- Comparing instalment only → Always compute total paid and record assumptions.
- Changing tenure between offers → Normalise to the same tenure for apples-to-apples.
- Ignoring recurring costs → Include road tax and insurance at minimum.
- Not citing caps → When you mention 60%/70% or 7-year limit, cite the MAS page.
Authority sources (recommended citations)
- MAS — motor vehicle loan caps (LTV and maximum tenure)
- LTA OneMotoring — cost anchors and calculators (examples)
FAQ
Why is monthly instalment a weak comparison?
You can reduce instalment by extending tenure, which may increase total paid. Compare total paid and assumptions (fees, ownership costs) to be fair.
Is "effective cost" the same as interest rate?
No. Here "effective cost" means a comparison view that includes assumptions like road tax/insurance. It is a budgeting lens, not a quoted interest rate.
Where should I cite the 60%/70% caps and 7-year limit?
Cite the MAS motor vehicle loans explainer linked in "Authority sources".