DBS wades into used car market with launch of online site
SINGAPORE — Singapore’s largest lender officially launched DBS Car Marketplace yesterday, the biggest direct seller-to-buyer car marketplace in the Republic, in partnership with sgCarMart and Carro.
DBS Bank said buyers can get an online interest rate of 1.99 per cent per annum (effective interest rate of 3.77 per cent per annum over a seven-year loan) on their DBS car loan when they buy a vehicle through the marketplace this month.
The interest rate is lower compared with the industry average of 2.98 per cent. Meanwhile, from now until Oct 4, sellers can list on both sgCarMart and Carro at one go at no charge.
The marketplace provides some functions, such as an on-site car budget calculator that provides the estimated loan amount the buyer is eligible for, and then serves them a list of cars based on their budget. If buyers find a car they are interested in, they can arrange with the seller directly online for a test drive. Both buyers and sellers will be fully guided and enjoy free paperwork services for car ownership transfers, said DBS.
With 3,500 direct-owner car listings, DBS Car Marketplace is Singapore’s first online consumer marketplace helmed by a bank.
This follows the central bank’s announcement in June this year allowing banks to operate digital platforms that match buyers and sellers of consumer goods or services.
In a speech to the Association of Banks in Singapore, Minister for Finance Heng Swee Keat had said that the line between financial and non-financial businesses “is blurring”.
Banks are increasingly facing competition from online and non-financial players that have leveraged their large user base to provide digital wallets, payments and remittance services.
“The MAS recognises that we can simplify our requirements to enable banks to embed banking services into consumers’ day-to-day activities,” he said then.
The car loan segment is one of the key contributors to DBS’ loan growth, said Ms Tok Geok Peng, executive director of Secured Lending at DBS Bank. “The car loan remains an essential financing tool for our customers as a car is a high-value item,” she added.
Responding to TODAY’s queries, OCBC said: “We offer a range of car financing packages with different partners and the interest rates vary in conjunction with car promotions.”
Last year, UOB signed an agreement with cloudBuy, a global provider of cloud-based e-commerce and business-to-business solutions, to create a virtual marketplace, BizExchange.
Through BizExchange, UOB customers will be able to view and purchase online a wide range of business essentials, such as travel, stationery, general insurance, as well as courier and logistics services.
They also enjoy cost savings from bulk-purchase deals negotiated by the bank with suppliers. BizExchange will be launched in Singapore this year and subsequently in Thailand, Malaysia and Indonesia, said UOB.
With DBS’ entry into the online consumer space, analysts say the tie-up helps add revenue to the bank’s business and opens the channels for more of such ventures for banks going forward.
“By entering into this arena, DBS is able to find a new avenue of earnings and also generate business for its existing car loans,” noted Associate Professor Lau Geok Theng, Department of Marketing, National University of Singapore Business School.
The newly launched car marketplace could be a good first indication of the success in melding local banks with digital consumer platforms, said IG market strategist Pan Jingyi. “Ventures into other consumer goods and services could certainly be the case should it prove viable,” she noted.
IHS Markit principal economist Bernard Aw noted that DBS’ partnership should help the bank gain greater brand recognition. But banks are likely to be selective about the digital platforms that they engage in, likely to include “only those connected to their products. In this case: Car loans.
That means other products (such as property) requiring loans are potential partners as well,” Mr Aw said.