Car Bought On Credit Seems So Expensive Now - Options?

[UKJASE]

Hi Guys, before i met the mrs she signed up with the farmer bank for a loan to buy a toyota pick up for her family for 400k baht.  she is paying 7000 baht a month, over 7 years, plus 100K upfront

 

This works out as nearly 700,000 baht.  It is now 1.5 years into it, and her remaining balance is 530k.  i asked her how old the pick up is and she said 8 years old.

 

so, she still has to pay 530k baht for an 8 year old truck.  i suggested, maybe she could just walk away from the payments, and i will buy the family a truck for 200k or so, then there is no more worries about payments.  she thinks she may have to either pay a big fee to walk away from the payments, or she would be black listed. 

 

As i say, her contarct is with the farmers bank, which is the pink bank up in issan i believe (i always thought those guys did loans that were reasonable)

What do you guys think we should do?  I am paying the 7k a month at minute, but dont really want to be paying it for more than 5 years, but i also dont want her to be black listed

PS i dont want to dump my mrs - i like her ????

[BritManToo]

4 minutes ago, UKJASE said:

What do you guys think we should do?  I am paying the 7k a month at minute, but dont really want to be paying it for more than 5 years, but i also dont want her to be black listed

1. How did she pay the 7k/month before you turned up?

2. And will she still want you if you aren't paying the 7k/month?

Are the two questions I'd be asking myself.

 

My personal opinion is 7k/month is a great price for a woman you like.

Edited November 24, 2021 by BritManToo

[Gsxrnz]

If she walks away she will get a bad credit rating and have difficulty borrowing again - this is not necessarily a bad thing!

 

There will be a buyout clause in the loan contract but because it is probably a rule of 78 interest calculation, you probably won't save much.  In simple terms, the 78 rule means that the majority of the first half of the payments are only interests and the second half of the payments increasingly compose of principal.  Classic HP loan -  it ain't a mortgage.

 

I'd guess the buyout amount will be about 80% of the original debt.  In other words, the damage is done and from a pure cashflow perspective it's probably touch and go whether you buy the loan out or continue the payments.

 

Ask the bank what the buyout amount is and make a decision from there.

Edited November 24, 2021 by Gsxrnz

[worgeordie]

8 minutes ago, UKJASE said:

PS i dont want to dump my mrs - i like her ????

I think that should be you love her .......I like pizza  .. ????,

It seems like she paid too much for a 2 nd hand truck in the first

place , its 8 years old now , and still has 5.5 years payments on it,

its going to be knakered  before its paid for , best get out of it now, best

way you can. 

regards Worgeordie

[BritManToo]

2 minutes ago, worgeordie said:

I think that should be you love her .......I like pizza  .. ????,

It seems like she paid too much for a 2 nd hand truck in the first

place , its 8 years old now , and still has 5.5 years payments on it,

its going to be knakered  before its paid for , best get out of it now, best

way you can. 

regards Worgeordie

My Nissen pickup is 24 years old, and still works very well.

But the OP should think carefully before rocking his boat, and risking falling out.

[sanuk711]

You wont get much of a truck for 200K--and the loss of face from the parents for the Downgrade/repossession,

will not be a small matter.

As Britmantoo writes---- IF...This is all the lady is costing you--then it seems OK.

 

She hasn't stopped work as soon as you appeared then.?????............

[jackdd]

Why do you even pay this for her?

Is she together with you because she likes you, or just because you pay her?

 

Does she own any other assets?

If she stops paying the bank, they will repossess the car, auction it off, and she still owes them the difference. If she has other assets the bank might try to go for these.

[ezzra]

Two facts, the minute you drive a new car out the showroom it drops about 20-30 of it's value depend on the make and model, banks and finance companies are not borrower's friendly, their interest rate and conditions are pretty tough and costly as many, many Thais have probably knows already, BUT, they're the only way to buy a car for 90% of the people and those banks and fiance companies take full advantage of it, in regards to the OP dilemma, sometimes leaving things be is the best course to take, who are we to figure out how Thai brains works?...

[nightfox]

My wife had the same issue. She took a loan from Thanchat bank to buy an 8 year old pick up. I stopped paying after a year as I realized its not worth paying that much for a second hand truck as by the time its payed off I could have bought a brand new truck.

 

Long story short, the truck got repossessed and she was blacklisted from obtaining another loan. It worked out in the end for me as I made some money in crypto and was able to buy a second hand truck in cash as theirs good deals these days on second hand trucks. Not from dealers as those guys are crooks, market place and facebook you can find good deals these days.

[nightfox]

7 minutes ago, jackdd said:

Why do you even pay this for her?

Is she together with you because she likes you, or just because you pay her?

 

Does she own any other assets?

If she stops paying the bank, they will repossess the car, auction it off, and she still owes them the difference. If she has other assets the bank might try to go for these.

No she wont own the bank the difference. My wife still gets letters from the bank that she owes the difference after our truck got repossessed from taking a loan from them and that happened 3 years ago. They will only blacklist her from getting other loans if she doesn't pay up.

[bkk6060]

If she stops paying is there actually a credit reporting/tracking system or minimum extended credit qualifications here?

I know plenty of Thais who make around 20,000 b a month and pay 8 to 10,000 a month for a car payment add their credit cars, rent, etc. way over extended seems no one cares.

 

 

Edited November 24, 2021 by bkk6060

[robblok]

Seems like quite a high interest rate

100.000 + 7 * 12 * 7000 =688.000 on a 400.000 truck

 

288000 financing costs. seems like a percentage that is higher then 10% (i could get a more accurate calculation but am lazy)

 

But her walking away is not the end of it, they can go after any property or possessions she had. So i would be careful. 

[robblok]

@UKJASE

 

So you only know your misses for 8-9 months ? you say 1.5 years but the math does not fit, unless she has stopped paying because of covid. 

[robblok]

19 minutes ago, nightfox said:

No she wont own the bank the difference. My wife still gets letters from the bank that she owes the difference after our truck got repossessed from taking a loan from them and that happened 3 years ago. They will only blacklist her from getting other loans if she doesn't pay up.

They will come after you a friend of mine had the same thing. Maybe you were lucky. Also it depends if your wife has possessions or not. I think most people love to do what you did if you don't have to pay anymore. Sorry but does not work that way.

[Pravda]

1 hour ago, BritManToo said:

1. How did she pay the 7k/month before you turned up?

2. And will she still want you if you aren't paying the 7k/month?

Are the two questions I'd be asking myself.

 

My personal opinion is 7k/month is a great price for a woman you like.

 

My personal opinion he's paying more than just a pickup truck.

[Henryford]

6 minutes ago, robblok said:

Seems like quite a high interest rate

100.000 + 7 * 12 * 7000 =688.000 on a 400.000 truck

 

288000 financing costs. seems like a percentage that is higher then 10% (i could get a more accurate calculation but am lazy)

 

But her walking away is not the end of it, they can go after any property or possessions she had. So i would be careful. 

If the truck was 400k and she paid 100k upfront then the payments 588k equate to  13.7% flat per year or over 27% APR, can't be from a bank surely, a loan shark? If she stops paying will they break her legs?

[robblok]

8 minutes ago, Henryford said:

If the truck was 400k and she paid 100k upfront then the payments 588k equate to  13.7% flat per year or over 27% APR, can't be from a bank surely, a loan shark? If she stops paying will they break her legs?

You did what i was lazy to do, did not want to take the effort to go to a site or use excel to get an accurate percentage. This is really a high percentage. Strange as i heard so many people always talking about the low finance interest they pay for cars. Many had 0% interest so im a bit shocked.

[Skallywag]

1 hour ago, BritManToo said:

1. How did she pay the 7k/month before you turned up?

2. And will she still want you if you aren't paying the 7k/month?

Are the two questions I'd be asking myself.

 

My personal opinion is 7k/month is a great price for a woman you like.

Yes, but he lives in Hua Hin and she lives in Issan from what I read.

[fredscats]

52 minutes ago, ezzra said:

Two facts, the minute you drive a new car out the showroom it drops about 20-30 of it's value depend on the make and model, banks and finance companies are not borrower's friendly, their interest rate and conditions are pretty tough and costly as many, many Thais have probably knows already, BUT, they're the only way to buy a car for 90% of the people and those banks and fiance companies take full advantage of it, in regards to the OP dilemma, sometimes leaving things be is the best course to take, who are we to figure out how Thai brains works?...

Of course,  the current form of Thai exercise is blank wall staring,   two hours at a time

[Doctor Tom]

OP, lots of unhelpful comments here about your relationship with your g/f. My g/f was in much the same position when we met. Paying 5,000 pm  for a car that was not worth it. Yes, I paid the monthly cost, for one year, then we sold the car and I paid off the balance, having negotiated the pay off with the bank, who were helpful. Cut your losses if you can and talk to the lender. As for the comments about 'buying your g/f', they are ignorant comments from largely bitter and twisted individuals, who have no idea about Thai life and culture.  There are a lot of them on Thai forums . 

[bbko]

Did she have a co-signer on the loan? Because if she just walks away, the co-signer could be in this mess also. 

[UKJASE]

8 minutes ago, Doctor Tom said:

OP, lots of unhelpful comments here about your relationship with your g/f. My g/f was in much the same position when we met. Paying 5,000 pm  for a car that was not worth it. Yes, I paid the monthly cost, for one year, then we sold the car and I paid off the balance, having negotiated the pay off with the bank, who were helpful. Cut your losses if you can and talk to the lender. As for the comments about 'buying your g/f', they are ignorant comments from largely bitter and twisted individuals, who have no idea about Thai life and culture.  There are a lot of them on Thai forums . 

dont worry Dr Tom - when i post on thaivisa i know what to expect (especially when a bird is involved in the story)

As Robblok said, the interest seems very high, but she showed me the app / statement with the balance last night and i am sure it is the farmer bank, altho the rate does seem more like a loan shark

 

she does have land, so that could be repossessed, so we will have to be careful.  Going up north with her (we live together in hua hin) soon, so as advised, will go to the bank and see what they can do.  unfortunately she was getting bucket loads of cash before, and signed up for the deal, but that bucket had a hole in it now,  and i am here to plug the cash flow ????

 

cheers for loads of advice so far guys - any more opinions are appreciated too (without getting too personal ???? )

[sniggie]

I am in a similar situation partly of my own making. When our old Jazz needed replacement I paid for our new car. Couldn't get credit due to being over 70. The Jazz got sold to a family member. My wife said that she would like a small car for herself. I gave her a challenge. You use the money from the Jazz as a deposit and get credit for the rest. With much effort and some chicanery she finally got an MG3,  I looked in horror at the usurious interest but then thought that her having the car on a long credit was actually a good benefit. Our main car is in my name, I made sure of that.  I have heard stories of farangs having the 'Where's the car, darling' moments. With her car on credit no family members can plead for money on the basis of her selling it. So, although it is pricey, it is a useful safeguard.  

[Liverpool Lou]

3 hours ago, UKJASE said:

she does have land, so that could be repossessed 

Only if ordered by a court (assuming that she didn't give it as collateral for the loan).

Edited November 24, 2021 by Liverpool Lou

[sometimewoodworker]

5 hours ago, Gsxrnz said:

If she walks away she will get a bad credit rating and have difficulty borrowing again - this is not necessarily a bad thing!

 

There will be a buyout clause in the loan contract but because it is probably a rule of 78 interest calculation, you probably won't save much.  In simple terms, the 78 rule means that the majority of the first half of the payments are only interests and the second half of the payments increasingly compose of principal.  Classic HP loan -  it ain't a mortgage.

 

I'd guess the buyout amount will be about 80% of the original debt.  In other words, the damage is done and from a pure cashflow perspective it's probably touch and go whether you buy the loan out or continue the payments.

 

Ask the bank what the buyout amount is and make a decision from there.

Thailand car loans are unlike loans in any other country. The “interest” is more like a loan arrangement fee, in that the amount payable does not change however soon you pay off the loan. Paying off early is of no benefit as far as reducing the total to be paid.

 

Walking away from the loan will black list the person for 5 years. You may find that even if you walk away and surrender the vehicle in perfect condition you are still liable for some amount.

[nightfox]

7 hours ago, robblok said:

They will come after you a friend of mine had the same thing. Maybe you were lucky. Also it depends if your wife has possessions or not. I think most people love to do what you did if you don't have to pay anymore. Sorry but does not work that way.

Your wrong, loans here are unsecured and there is no collection agency's in Thailand. Unless a person is stupid enough to use collateral against a loan the lender will not come looking for you, and yes my wife has possessions such as land etc. and nobody came to take them and we defaulted almost 4 years ago.

[robblok]

1 minute ago, nightfox said:

Your wrong, loans here are unsecured and there is no collection agency's in Thailand. Unless a person is stupid enough to use collateral against a loan the lender will not come looking for you, and yes my wife has possessions such as land etc. and nobody came to take them and we defaulted almost 4 years ago.

Your wife must have been lucky as my Thai friend had his bank account frozen. That a loan is unsecured does not mean they won't go after other assets. You been lucky but that is not the rule. Many Thais wish it was so easy.

[Stevemercer]

You have 3 options.

 

1. You can stop payment, allow the car to be repossessed and for the threatening letters to roll in. Your wife will be unable to take out any legal loans for 5 years. As long as the bank holds the loan nothing much will actually happen. After 3 years or so the bank will sell the debt to a third party who will aggressively pursue it. You will have to settle eventually if you love your wife.

 

2. You can request the pay-out details and negotiate a one-off settlement. Obviously you can sell the truck or keep it once you have the title. You might not save much off the total loan, but you won't know unless you ask. You/your wife might be able to get a loan at a far cheaper rate to cover off the pay-out which will save a lot of money.

 

3. You can keep to the status quo and just live with the situation day by day. Maybe a better solution will eventually suggest itself, but, in the meantime, don't worry about tomorrow.

 

Option 3 is the preferred Thai way. with Option 1 being the fall back. If you are the type of person who can live day by day then Option 1 would be the cheapest. The worst may never happen and who knows what good fortune tomorrow might bring. Maybe someone else will pay off the debt for you.

 

But for the typical Westerner, a debt of 7000 Baht every month for years will eat away at you. Most of us will eventually go for Option 2 if we can afford it or if we are getting a cheaper loan for another purpose anyway. Otherwise we are stuck with Option 3 and have to grind our teeth and get on with it

Edited November 24, 2021 by Stevemercer

[BritManToo]

5 minutes ago, Stevemercer said:

You have 3 options.

 

1. You can stop payment, allow the car to be repossessed and for the threatening letters to roll in. Your wife will be unable to take out any legal loans for 5 years. As long as the bank holds the loan nothing much will actually happen. After 3 years or so the bank will sell the debt to a third party who will aggressively pursue it. You will have to settle eventually if you love your wife.

My woman had a car loan for 500k, the car disappeared, she didn't repay the loan.

She just transferred everything she owned to her mom and sat it out.

One letter a year asking for the money to her registered address.

When the time ran out she immediately got a home loan for 1.5Mbht from the bank.

 

No consequences, and she got 500Kbht free.

[worgeordie]

18 minutes ago, BritManToo said:

 

No consequences, and she got 500Kbht free.

Tell her to do it again ....... easy money  

regards worgeordie