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Compare the Full Car Quote, Not the Monthly Headline

A monthly instalment is one cash-flow line. It does not reveal the downpayment, total interest, fees, loan term, running costs or debt remaining if you sell early. Convert every offer into the same written worksheet before deciding that one is more affordable.

Jump to the quote worksheet, the official worked example, early-exit debt or the decision test.

Rewrite every offer in the same format

MoneySense recommends using EIR to compare loan packages and checking the repayment schedule before signing. It also notes that fees and charges matter alongside interest. MoneySense guide to flat rates and EIR.

Worked example: a lower monthly payment costs more overall

MoneySense gives an example of a S$90,000 car loan at a 2.5% annual flat rate. These are its published figures, last updated 22 April 2026.

The seven-year term lowers the displayed monthly payment by S$428.57. It increases the published total repayment by S$4,500.12. The lower monthly number is real, but it describes cash timing rather than a lower borrowing cost.

A flat rate applies interest to the original principal throughout the term. MoneySense explains that its EIR is therefore higher than the advertised rate. Do not put the flat percentage into a reducing-balance calculator and assume the result describes the quote.

Reconcile the loan cash flows

For a full-term comparison, check:

Total loan repayment = monthly instalment × number of payments.

Full-term finance cost = total loan repayment + mandatory finance fees − loan principal.

Add the downpayment when calculating cash paid for the car, but do not call returned principal an extra ownership cost. Principal either reduces the debt or becomes equity in the vehicle. The used-versus-new calculator keeps financing cost, cash flow and exit equity separate.

If you may sell early, obtain the settlement schedule

A seven-year loan does not become a five-year loan because you plan to own the car for five years. At sale, the lender’s settlement must be paid from the sale proceeds or other cash. Model:

Cash left at exit = gross sale or deregistration proceeds − loan settlement.

Do not estimate settlement by subtracting an equal slice of principal each month. The contract can specify interest treatment, fees and rebates. Request the lender’s schedule or an estimate for the intended exit month.

Add ownership costs after the loan quote is clear

The instalment excludes insurance, road tax, parking, fuel or charging, servicing, repairs and other running costs unless the written package explicitly says otherwise. Build two views:

• cash-flow view: downpayment, fees, instalments, running costs and settlement timing;
• ownership-cost view: purchase price minus exit value, plus financing cost, fees, one-off work and running costs.

Using both views stops an apparently manageable instalment from hiding a large upfront event, a costly term or negative equity at exit.

Compare the car before the financing

First decide whether the vehicle, inspected condition and itemised cash price are acceptable. Then compare finance quotes for the same principal and term. A cheaper instalment attached to a weaker car or a higher base price is not a cleaner offer.

LTA advises buyers to read agreement terms carefully, including selling price, deposit, trade-in, warranty, insurance, payment milestones and financing interest rates. It also advises securing finance approval before possession. LTA transaction safeguards.

Decision test

Accept the monthly payment only after the full quote passes all four tests:

1. The cash price and required charges are itemised.
2. The principal, flat rate, EIR, term, fees and total repayment reconcile.
3. The settlement at your intended exit date leaves an acceptable cash outcome under a lower resale value.
4. The instalment plus realistic running costs fits the household budget with room for irregular costs.

If a seller will provide only the monthly number, the offer is not ready for comparison. Carry the completed worksheet into the final commitment gate.