The closures come even as more drivers turn to car rentals amid high COE prices
227 car rental companies had ceased operations between Jan 1 and Dec 24 last year, representing around 12% of the industry in 2025, reported CNA. According to the Accounting and Corporate Regulatory Authority, 1,634 entities were in the business of renting and leasing of private cars without a driver as of Dec 24, 2025.
One big company that folded recently was AutoBahn Rent A Car, which oversaw car-sharing firm Shariot and eight other related businesses. The firm owes creditors more than S$300 million. Shariot has since halted its rental services on Dec 31 “until further notice,” citing “internal business restructuring and service review.”
In late Nov, authorities also launched an investigation into car leasing company SRS Auto over suspected money laundering.
As these companies go out of business and fleets are reclaimed, drivers who rely on leased cars to earn a living are left stranded.
As such, the National Trades Union Congress, the Land Transport Authority and three ride platform operators—ComfortDelGro, Grab and Strides Premier—have announced efforts to support affected drivers by providing them with access to vehicles.
“We know this situation has created significant hardship for affected drivers, and we have engaged a number of them. Drivers depend on their vehicles to earn a living, and we take their livelihoods seriously,” said Assistant Secretary-General of NTUC Yeo Wan Ling.
The adviser to the National Private Hire Vehicles Association (NPHVA) and the National Taxi Association (NTA) added that both groups “will continue to work with LTA and platform operators to protect and support our drivers.”
Why is the car leasing industry under strain?
Despite more drivers turning to longer-term leases especially with high COE prices driving up the cost of car ownership, many would wonder why the car leasing industry is under strain.
Established car leasing firms and industry observers told CNA that the ongoing issues stem from unsustainable investments, aggressive price wars initiated by newer players, and overleveraged business models.
According to Kenneth Lee, the honorary treasurer of the Vehicle Rental Association (VRA), some firms had expanded too aggressively by taking on excessive debt in recent years.
“They often prioritised growing their market share over making sure each car was actually profitable, disregarding the COE price,” he explained. “When demand drops or loan costs rise, these business models become very risky.”
It is relatively easy for operators to borrow large sums for fleet expansion. Under the Monetary Authority of Singapore’s (MAS) motor vehicle financing rules, loans for personal-use vehicles are limited to 60 or 70% of the purchase price, depending on the vehicle’s open market value. Buyers must therefore cover the remaining 30-40% in cash upfront.
However, these restrictions do not apply to commercial vehicles, such as private hire cars. In a letter to The Straits Times forum in Sept MAS stated that such vehicles are exempt from motor vehicle financing limits so as “not to constrain credit to companies and individuals who rely on such vehicles for their businesses and livelihoods.”
MAS also pointed out that interest rates for financing private hire cars are higher than those for personal-use vehicles, reflecting the greater risk borne by lenders.
Many of the car leasing companies that have folded emerged during a “boom time” after pandemic restrictions were lifted, said Chiam Soon Chian, Chief Operating Officer of private hire vehicle rental firm Lumens Group, which has been around for over a decade.
To gain market share, newer entrants aggressively undercut rental prices. Veteran operators told CNA that they were stunned when they learned that newer entrants like Autobahn had lowered rental prices after joining the market in recent years.
Even Lumens was affected: these firms not only undercut it on rental rates but also poached around 10 of its staff members, offering pay increases of up to 40%, Chiam shared.
He noted that the prices they were offering were below S$100 a day, but said this was unrealistic, as it matched rental rates in countries like Japan and Australia.
“But cars (in those countries) can cost only S$30,000, but in Singapore, it costs about S$180,000 now,” he said. “So when you do a ratio of the rent to the cost itself, it is just not sustainable.”
Meanwhile, the COE cycle also makes it difficult to predict profits, said Ng Chee Haw, general manager at rental firm Bolt Car Leasing, adding to the pressures already faced by car-sharing companies.
“Many operators focus on short-term cash flow and may appear profitable initially, but if COE prices fall in future years, the resale value of their fleet could drop significantly, reducing or even eliminating actual profits,” he explained. “This is something many new players underestimate.”
How can drivers navigate the closures?
Amid the recent wave of closures, industry players cautioned drivers to be wary of deals that seem too good to be true.
“If the price is too low, it might look like a good deal, but where is the company going to make the money from?” said Chiam.
Unusually low prices may also indicate poor vehicle condition, potentially leading to frequent workshop visits and inconvenience, added Ng.
Lee suggested that drivers opt for “established operators” with proven track records, and to conduct thorough due diligence before paying deposits or signing any agreements.
For drivers currently leasing vehicles, NPVHA urged members to ensure their road tax and insurance are up to date and to avoid leaving personal belongings in cars if repossession seems likely. Contracts and correspondence should also be retained.
“Without being issued an official repossession letter, treat the vehicle as missing and file a police report,” NPVHA said.
The association added that it assists members in drafting letters to rental companies on matters like deposit refunds and is collaborating with alternative operators to provide “special arrangements” for affected drivers.
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