How about: 'Your dream set of wheels may wreck you financially.'

Or more specifically: 'Beware: When you sell this car, you may need to beg, borrow or steal to pay off your loan.'

Here's why: For the first nine years or so that you own the car, the loan amount that you still owe is likely to be more than the vehicle's resale price.

If you find one day that you could not meet the repayments, or have to sell the car because of a change in circumstances, would you have the tens of thousands of dollars necessary to pay off your bank?

Called negative equity, this problem could be a millstone around the necks of many buyers who have rushed to buy cars after the Monetary Authority of Singapore (MAS) lifted financing limits on Jan 22.

The MAS' rationale for its move was: 'Car loans form a small proportion of financial institutions' total loan portfolio, and the level of non-performing car loans is also low.

'The lifting of the limits on car loans is therefore in line with MAS' shift from a one-size-fits-all supervisory approach to a risk-focused approach.'

All is well and good, of course, if you can meet the repayments. But what if you were made redundant, for example?

Negative equity is most acute in the first few years, when the value of your car depreciates horrendously.

'You can easily write off a minimum of 30 per cent in the first two years,' said a car dealer.

That means, an $80,000 car would be worth less than $56,000 then.

But the outstanding loan would be around $70,000 - assuming that you had taken up a loan amounting to 95 per cent of the car price, to be repaid over 10 years at a flat interest rate of 2.75 per cent per annum.

In other words, you have to cough up $14,000 cash to hand over to your bank. If you can't pay up, you would soon receive a lawyer's letter threatening legal action.

Aside from the sharp depreciation in the value of the car, you are also hit with a big pre-payment penalty when you sell before the loan period is over.

Your financier will charge the penalty under a complex formula in the so-called Rule of 78, which is applied commonly in some countries.

Here are two key points about Rule of 78:

The longer your loan period, the stiffer the pre-payment penalty in any given year compared to a shorter loan period.

In a given loan period, the earlier you sell, the bigger the pre-payment penalty, says wealth-management firm dollarDEX.

For example, at the end of the first year, the penalty is 5.7 per cent of your outstanding loan, it says.

The penalty rate varies with the interest rate and repayment period of the loan which, in this case, is assumed to be a flat 3 per cent and 10 years respectively.

The penalty shrinks to 1.3 per cent at the end of year eight.

Put another way, if you sell your car before the loan period is up, you still have to pay as much as three-quarters of the interest on the full loan, says dollarDEX.

The firm notes that Rule of 78 was outlawed in the United States in 1992 for loans with repayment periods exceeding 61 months.

The rule is currently under review in Britain.

Under existing circumstances, you get a respite only from around the ninth year.

That is when your car's market value will begin to be higher than what you still owe the bank.

Experienced car buyers recognise this is as a return to the pre-1995 days, when people were allowed to take up loans of up to 95 per cent of the car price, and the repayment period was as long as 10 years.

A sales manager at a car dealership knows the danger of doing so.

He recalls his brother taking a high loan in 1993. In the seventh year, his sibling still had to pay money to the finance company if he sold the vehicle, so he decided to wait one more year before doing so.

'After paying off his loan, all he had left from the sale was a measly few hundred dollars,' the manager recalls.

Mr Chye Kit Soon, a lawyer who also writes car reviews, points to the same burden still being borne by people who bought cars in 1995. 'Even up to today, they find that their cars are worth less than what they owe the bank. Now, history is about to repeat itself with a new set of buyers.'

You will not find financially-savvy motorists such as Mr Lee Ian Wurn, 31, being lured to borrow to the hilt, though. He had accumulated substantial savings before buying a Nissan Sunny in August 2000.

The engineer plonked down $47,000 in downpayment for the $87,000 car, and took out a seven-year loan. Today, he still owes the bank about $28,600, but that is a lot lower than the car's resale value of $52,000.

'I believe in having money in the pocket before I spend. I'm averse to debt,' he says.