Anyone bought on car on finance?

[TotallyOz]

I have a Thai friend who wants to buy a car and finance it. I have heard horror stories about the Interest rates here. Anyone know how a Thai can get a car in his name, amount down, interests, etc? Thanks.

[Gaybutton]

I bought my car at the Toyota dealership. At the time I bought, Thais were required to put 50,000 baht down and pay for any options up front in full. I forget the interest rates for financing, but they were reasonable. The dealership arranges financing through legitimate agencies such as banks, reputable lending companies, etc. Before financing is approved, in most cases the lending institution will check the ability of the client to be able to pay back the loan, and that includes a personal visit to the client's residence. If the client does not meet the requirements or if it is a farang, then the client will have to come up with an acceptable Thai guarantor. The car will be in the guarantor's name until the loan is paid off.

 

So, if a guarantor is required then you need to make sure it is someone you can be certain you can trust. If the guarantor lets you pay for the car and then refuses to let the client change it over to his own name, or at any time before the loan is paid off, the guarantor can take the car and there wouldn't be a thing you could do about it because it is in his name. You would have to be very careful about that.

 

The guarantor also has to be careful about you. After all, if the person defaults on the loan, is late with payments, or whatever, it will affect the guarantor's credit status or he could end up being stuck with the car or be the one facing the consequences of a repossession.

 

But for these kinds of questions, wouldn't it make more sense to just go to a car dealership and ask?

[Guest]

I once stupidly purchased a car on finance, in my younger days.

 

Nowadays, I buy older ones that cost less than a months salary.

Longer term, your friend is probably better off living within his means too.

[2lz2p]

Thai financial institutions and banks seem to charge reasonable interest rates computed as is done by western banks for installment loans. The interest rate can be low, but there will be a VAT charge on each monthly payment amount.

 

It is my understanding that farangs generally cannot get financing in Thailand unless they have a work permit and/or Thai guarantor - the guarantor would need to have credit acceptable to the financial institution. As for Thais, there are several factors that may be involved depending on their credit/financial standing.

 

My bf and I purchased our first car from Honda - the manager at the Honda dealership arranged for him to meet with a representative of the financial institution at the dealer's showroom. The financial rep "advised" him of what to put on the application - we also put down 50% of the purchase price as a down payment. There was no visit from the financial institution, but he did get a call from someone to confirm the information. The loan was approved - considering that used vehicles retain their value in Thailand, the 50% of cost loan was substantially less than what the car could be sold for, so the financial institution was well secured.

 

Monthly payments were easily handled through internet banking. The financial institution held the "car book" and provided a photocopy of the registration page along with the "sticker" to put on the car. In subsequent years, they sent a separate billing for registration and after payment received, again sent a photocopy and the sticker. When paid off, they sent several documents to be signed and then mailed him the "car book" showing it was owned by him. About a month or so after pay off, they sent him a letter offering another car loan up to 600k Baht at a good interest rate if he wanted.

 

However, if you deal with a Thai lender that is not a financial institution, the interest rates can be high. About 15 years ago, the bf bought a motorcycle near his home town and obtained credit from the cycle shop. It seems the terms were at a fairly high interest rate, but the rate was calculated on the original principal amount each month. The rate was not annualized (divided by 12 months)and not applied to the unpaid principal balance each month. For example, if the original amount was 10,000 Baht and the rate is 20%, an interest amount of 2,000 Baht is charged for each month - any monthly payment in excess of 2,000 is applied to the loan principal. So, if the loan was paid down to say 1,000 Baht of unpaid principal, it would take 3,000 Baht to pay it off on the next payment.

[Gaybutton]

It is my understanding that farangs generally cannot get financing in Thailand unless they have a work permit and/or Thai guarantor

A few months ago I asked the Toyota dealership if it is still true that farang cannot get financing. The person I spoke with said now a farang can get financing, but he has to put 50% down.

[Guest joseph44]

GB, that's not the general rule.

Other dealers require 2 instead of one guarantor.

 

A guarantor is not something they invented to annoy foreigners. It's something the Thai need as well.

The Thai need even guarantors if they apply for a job.....amazing country, based un dis-trust.

[Guest lvdkeyes]

Does anyone ever watch the Suze Orman Show on CNBC? She is a financial adviser and her mantra is basically If you can't afford to pay cash you can't afford it.

[payless]

Does anyone ever watch the Suze Orman Show on CNBC? She is a financial adviser and her mantra is basically If you can't afford to pay cash you can't afford it.

 

Were you born in the 19th.century?

 

Thanachart Bank and Ratchathani Leasing are probably the 2 main players in providing car loans. Both companies charge interest on a flat-rate calculation. To calculate an approximate APR rate you need to double the quoted interest rate and add '1'. So a quoted flat-rate interest of 6% is about 13% in APR terms. On top of that as 2lz2p pointed out you will pay VAT on the interest.

 

Making a loan in Thailand is probably easier than in many countries and nothing to be afraid about. Thanachart's main Pattaya office is in North Pattaya Road near Healthland Massage.

[Gaybutton]

She is a financial adviser and her mantra is basically If you can't afford to pay cash you can't afford it.

My guess is she's got the cash. I'll bet if she didn't, then she'd be singing a different tune. My interpretation of that is anything you want to buy, then pay cash. Great. If we go strictly by that philosophy, then having credit at all would be superfluous.

 

I can't afford to buy a car for cash, so I'm using credit and I'm doing just fine. I could also have saved up to pay cash for the car, which might have meant I would save money in the long run, but I would also be without a car until I accumulated enough cash. That's how I actually do most things. The only item I have ever bought on credit in Thailand is my car. I'd much rather have the car than save the money I'm paying in interest.

[Guest lvdkeyes]

Neither of you answered if you have ever watched her show.

[Gaybutton]

Neither of you answered if you have ever watched her show.

I have not watched her show. But that has nothing to do with my response. I'm simply pointing out that I bought my car on credit and I have no regrets about doing it that way. But I'll watch her show at some point to see what she says. Do you know the days and times?

[Guest lvdkeyes]

I watch on Sat & Sunday at midnight, but I think she is on at other times.

[Guest kenrfc]

Having just been through a purchase in Dec I can tell you this is pretty much my experience.

Ladyboyfriend bought a Toyota truck (well, actually I bought it but let's just continue with the fiction) and was told if she put down 25% there was no need for a cosigner.

The terms were 25%down 6 years financed at 4.9%

There was a package of extras included with the "25% down" including 1 year fully paid insurance. Lucky for us because she rolled the truck after 2 months! 400,000B damage and our out of pocket is only 9,000B.

Personally, I think it was a pretty good deal.

The dealer was up in Chainat province. Things may be different in the "Big City".

 

The monthly payments are handled by a "book" and can be made at any local bank.

[Guest lvdkeyes]

By financing, how much more do you pay over the term of the loan than if you paid cash?

[Guest fountainhall]

Neither of you answered if you have ever watched her show.

I watch occasionally. She's also a consultant on almost every major talk show, from Oprah to Larry King and Anderson Cooper. I know zillions of American women adore her. I admire her, the more so as she was once a waitress scraping together a living and is now a multi millionairess (she's also openly gay), so she knows how to crawl out of poverty.

 

Personally, I don't like her manner - too folksy for me. The show is also pretty repetitive as it seems mostly to involve people who have too much credit card debt. I'm not sure I agree that she advocates a 'cash only' policy for all purchases. Homes are obviously an exception, but I have not heard her sound out about financing a car on credit - provided the purchaser has an 8-month cash reserve for rainy days and his/her income warrants it. Financing through credit card use, though, is a definite 'no-no' in her book. Too true!

[Guest Hereforme2]

 

 

 

Yes! Toyota 2.4% 60 mo. 25% dowm...Thai garantor....anyone with a real job!

[Guest lvdkeyes]

Suze's manner can get a bit annoying, but her advice regarding money is right on. Since she came up from nothing to being where she is now is a testimony that her methods work.