SINGAPORE, March 1 — Exploiting legal “grey areas” and inflated invoices, car dealers here are flooding social media with S$0 down-payment schemes that bypass central bank rules.

Such predatory tactics have helped push household motor vehicle debt to a 12-year high of S$12.4 billion (RM43 billion), sparking urgent warnings from authorities over the risks of “deceptive” financing and potential fraud, Th Straits Times reported.

The advertisements, ubiquitous on Instagram and Facebook, promise buyers they can skip the mandatory 30 per cent or 40 per cent down payment required by law.

By offering “100 per cent in-house loans” and “guaranteed approval,” smaller industry players are enticing buyers into high-interest debt cycles that circumvent the Monetary Authority of Singapore’s (MAS) cooling measures.While banks and licensed moneylenders are strictly regulated by MAS and the Ministry of Law, in-house financing by car dealers operates in a regulatory vacuum. Acting Transport Minister Jeffrey Siow recently warned that these arrangements are effectively “unsecured personal loans” masquerading as hire-purchase agreements.

Yio Chu Kang MP Yip Hong Weng has called for a level playing field, noting that if a contract mirrors a loan, it should carry the same consumer protections.