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Posted

What is the process when a person stops paying monthly repayments on a car? For example, buy a Honda through Honda leasing, put down a deposit of around 240,000 baht, keep up monthly payments for 20 of the 48 monthly payments then just stop paying per month. I understand that the car will be repossessed at some stage but does it involve a court process, civil litigation, etc?  Does one get back part of the deposit once the car is taken back and on-sold? 

 

What other options are available for the leaser if they can't keep up the payments at this stage?

  • Like 1
Posted (edited)

Here you will not really get a 100% answer, you shall ask this to the bank or the loan company..

 

And is a   real bad idea to stop to pay you can be 99% sure the next credit applications will be rejected 

Edited by kralledr
  • Like 1
Posted
3 minutes ago, Monomial said:

Car loans here are not "loans". They are hire-purchase agreements. Which are exactly like they sound. You "hire" the car for X number of years, and at the end of it, you get ownership. Think rent to own.  The car still legally belongs to the finance company until you finish paying and they transfer title, so there is no need to have a court case. If you stop paying, you need to return the car, or they will come take it from you. It is their car. Whether or not you still owe them anything after breaking the contract is dependent on the specific terms of your agreement. You will need to put this question to the finance company.

 

Your best bet is to get a payoff amount from the finance company, and then find a private buyer. Alternatively, find someone acceptable to the finance company who is willing to take over payments. Try to reach an agreement though. You have absolutely no rights in this situation, and after only 2 years of payments on a 4 year term don't count on the wholesale value of your car being large enough to merit a refund if you hand it back to them. More than likely you will wind up owing them money. And you will destroy your credit in the process.

are you sure?...

 

So from where will the dealer get the money, from the Bank, so it's a loan?!

Posted
1 minute ago, Monomial said:

The dealer

The dealer gets the money from the finance company. The finance company takes ownership of the car and "hires" it to you until you complete your term.  Yes, I am sure.

 

Well in my case they got the money from my housebank (scb) when i bough it. 

Posted

If you are saying you got the car as part of your house mortgage, then that would make sense. In that case, there is no car loan. It is a loan against your house.

 

  • Like 1
Posted
1 hour ago, Monomial said:

If you are saying you got the car as part of your house mortgage, then that would make sense. In that case, there is no car loan. It is a loan against your house.

 

No i not used my house lol...

i simply whent to the dealer said i whant buy it as credit and got them to call my bank SCB... nothing more nothing as guarantee well only asked my payslips and workpermit but i have my own company

Posted
2 hours ago, Monomial said:

Car loans here are not "loans". They are hire-purchase agreements. Which are exactly like they sound. You "hire" the car for X number of years, and at the end of it, you get ownership. Think rent to own.  The car still legally belongs to the finance company until you finish paying and they transfer title, so there is no need to have a court case. If you stop paying, you need to return the car, or they will come take it from you. It is their car. Whether or not you still owe them anything after breaking the contract is dependent on the specific terms of your agreement. You will need to put this question to the finance company.

 

Your best bet is to get a payoff amount from the finance company, and then find a private buyer. Alternatively, find someone acceptable to the finance company who is willing to take over payments. Try to reach an agreement though. You have absolutely no rights in this situation, and after only 2 years of payments on a 4 year term don't count on the wholesale value of your car being large enough to merit a refund if you hand it back to them. More than likely you will wind up owing them money. And you will destroy your credit in the process.

Thanks mate, we have a private buyer but I was just covering all bases in case the deal falls through. Not too worried about credit rating as we are leaving the country and will not be buying another car here on a loan.

Posted
On 10/24/2019 at 2:55 PM, kralledr said:

Car loans here are not "loans". They are hire-purchase agreements. Which are exactly like they sound. You "hire" the car for X number of years, and at the end of it, you get

Sounds exactly like a loan to me. You borrow the money (the finance company loans you the money) and they hold the pink slip until you have fulfilled the terms of the loan, I.e. made all the payments. At that point your loan is paid off and you own the car. That is the definition of a loan. The car is

the collateral.

Posted
On 10/24/2019 at 6:28 PM, kralledr said:

No i not used my house lol...

i simply whent to the dealer said i whant buy it as credit and got them to call my bank SCB... nothing more nothing as guarantee well only asked my payslips and workpermit but i have my own company

Your bank SCB financed the car loan then, ie they paid the dealership and gave you a credit note on the car.

 

https://www.scb.co.th/en/personal-banking/loans/car-loans/auto-finance-new-car.html

 

The same as a dealership selling you a car on finance (from a finance company) who own the car until it's paid off and title transferred as mentioned earlier. Most commercial banks will facilitate a car loan these days. Most car purchase loans in Thailand used to be serviced by the specialist finance companies like Tisco, Kiatnakin and Thanachart but these have morphed into fully fledged banks over time.

Posted
On 10/24/2019 at 6:49 PM, Coota said:

Thanks mate, we have a private buyer but I was just covering all bases in case the deal falls through. Not too worried about credit rating as we are leaving the country and will not be buying another car here on a loan.

I wouldn't be too sure your credit rating here would not follow you elsewhere.

But hey, what do I know? The last time I owed anybody any money was 1974.

Posted

If you are Thai, you go and hide the car from the bank or the finance company.  There have been several in our village where they come to a friend in the village and ask him if it is okay to park the car.  They wait until the 'heat' is over and the financing company decides to stop the investigation.

 

If the loan is from a bank, then there is no savings to payoff early.  Read your contract.  If the 'loan' term is for 60 months and the monthly payment is 20,000 baht, then the early payout is the number of months left on the contract times 20,000 baht.  That is until recently, the bank regulator has released a new regulation which I think is only on new loans which has directed the banks to change the loans to simple interest loans where if you want to payoff early, then you can save the interest that would have been paid until the end of the loan.

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