Turbulence in the Car Leasing Industry: Over 220 Firms Shut Down in 2025

SINGAPORE: When 34-year-old private hire driver Chua found out in November that the company he was leasing the car from, Autobahn Rent A Car, was facing financial trouble, a salesperson assured him that it would be business as usual. He had begun renting from the company since September and depended on the car as his only source of income. But the assurances soon proved hollow. Autobahn Rent A Car and its related businesses were reported to owe creditors more than S$300 million (US$233 million). On Dec 26, their application for creditor protection was dismissed by the High Court. Just three days later, on Dec 29, Mr Chua, who wanted to be known only by his surname, was informed that the company would be suspending operations. He had paid a S$500 deposit on the car, but was told he could “continue to drive the vehicle to offset the deposit”. “Then, when I checked the road tax, I found out that it had expired.” With the road tax lapsed, Mr Chua has been unable to drive the car since Dec 29, nor has he been able to get his deposit back. He was forced to scramble for alternative work. Previously earning about S$200 a day as a private hire driver, he now earns around S$110 a day in his new role as a home mover. On Wednesday (Jan 7), the vehicle was towed away by Autobahn's creditors. “I’ve had no luck (finding a new car), I’m still searching and asking around,” he said. The closure of several big players in the car leasing sector have made headlines in recent months, which have impacted drivers like Mr Chua. Car sharing firm Shariot — part of the same business group as Autobahn — paused its rental services on Dec 31 “until further notice”, citing "internal business restructuring and service review". Earlier in December, car leasing firm SRS Auto came under investigation for possible money laundering activities. In response to queries from CNA, the Accounting and Corporate Regulatory Authority (ACRA) said that as of Dec 24, 2025, there were 1,634 entities that are in the business of renting and leasing of private cars without a driver. Between Jan 1 and Dec 24 last year, 227 of these entities had ceased operations. This represents about 12 per cent of the industry that has shuttered in 2025. On Jan 7, the National Trades Union Congress (NTUC), the Land Transport Authority (LTA) and three ride platform operators – ComfortDelGro, Grab and Strides Premier – said they are working to support affected drivers by making vehicles available to them. "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 organisations "will continue to work with LTA and platform operators to protect and support our drivers." But why is the car leasing industry under strain, even though more Singapore drivers are increasingly turning to longer term leases as an alternative to car ownership? Speaking to CNA, established car leasing firms and industry observers said the current woes stem from unsustainable investments, aggressive price wars initiated by newer players and overleveraged business models. On the last point, experts said the relative ease with which car leasing companies can access capital to finance vehicle fleets have worsened the business fundamentals for some players in a highly competitive field. AN INDUSTRY STRETCHED THIN With elevated COE prices making car ownership increasingly expensive, more individuals and businesses have opted to lease instead of buying a new car, said Mr Kenneth Lee, honorary treasurer of the Vehicle Rental Association (VRA). While this fuelled strong demand for long term leasing, the current environment of high interest rates and elevated COE prices has been a “tough test” for the industry. Mr Lee said some firms expanded too aggressively in recent years by taking on excessive debt. “They often prioritised growing their market share over making sure each car was actually profitable, disregarding the COE price,” he said. “When demand drops or loan costs rise, these business models become very risky.” Veteran operators said they were shocked when they first heard that newer entrants such as Autobahn slashed rental prices after entering the market over the past few years. Mr Chiam Soon Chian, chief operating officer of private hire vehicle rental firm Lumens Group, said many of these companies emerged during “boom time” after pandemic restrictions were lifted. They not only undercut Lumens in terms of rental rates, but had also poached about 10 of its staff members, offering pay bumps of up to 40 per cent, said Mr Chiam. He said that the prices that they were offering were less than S$100 a day, but this was unrealistic, as it was on par with the rental rates of countries such as 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,” he said. He added that Lumens, which began operations in 2014, has been pivoting to other offerings such as workplace pickups and school pickups to gain an edge over the competition. Mr Ng Chee Haw, a general manager at rental firm Bolt Car Leasing, said that the COE cycle makes it hard to gauge profits. “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 said. “This is something many new players underestimate.” As to whether recent reports of investigations into money laundering activities should be a concern, Mr Lee from VRA thinks that such activities are the exception rather than the norm. “We see these as isolated cases that do not reflect how the rest of the industry operates,” he said. “Most rental companies in Singapore are legitimate businesses, where many are family-run or established corporate firms that follow the law strictly … We support the authorities’ efforts to remove bad actors, as this protects the reputation of honest operators.” SPURRED BY EASE OF BORROWING In the case of Autobahn and its group of related companies, total debt exceeds S$300 million, including S$103 million owed to DBS Bank, S$17 million to UOB, and S$12.5 million to OCBC Bank. Associate Professor Walter Theseira from the Singapore University of Social Sciences (SUSS) School of Business said it is relatively easy for companies to access capital to finance vehicle fleets, even though cars are an “incredibly expensive” asset in Singapore. This is because cars are also an “extremely safe” asset, he said. After all, much of their value is effectively government backed through the COE and Additional Registration Fee refund policy if a vehicle is scrapped. There is also “nowhere to hide a car” in Singapore, unlike other countries where vehicles can be driven beyond a financier’s ability to repossess them. “Remember also that one does not need to obtain new cars with new COEs to enter the car rental or leasing business, which opens up entry again to much lower capital requirements,” he added.