Motorcycle Buy or Installments

[Neeranam]

I have a friend who wants to rent a m/c. 

I am thinking I'll just buy one and rent it to him. 

Actually, I could buy it and ask him to pay the installments, many options.

 

What interest do these m/c shops charge for hire purchase?

[CharlieH]

MOVED TO Motorcycle forum

[CharlieH]

From what I have seen, around 50% over 4 years.and they also offer upto 7 yr !

 

Thais generally couldnt careless and dont think of the actual price being paid, they only think about what they have to pay each month and can they make that.

 

[richard_smith237]

Well… you’ve been here long enough to know the stories…

 

Will this ‘friend’ pay every month, not be late, end up stopping paying, then disappear fully with the bike.

Or, crash it, write it off, then you are stuck with the loss. 
 

 

The Honda website has a calculator to show the costs & interest.

 

https://www.thaihonda.co.th/honda/calculator

 

 

 

[impulse]

If you're going to be renting it to a friend, why would you buy a new scooter?

 

[scubascuba3]

Bad idea but guys also do it for their girlfriends and giks

[StevieAus]

From the experiences of some of my wife’s friends who have loaned money stood guarantor etc, the people they have helped seem to then suffer from amnesia when it comes to repayment time.

Unless you are prepared to potentially lose the money don’t help.

[thailand49]

Friend want to rent?   Then let him rent it from a shop why deal with the headaches if something happens.  

[digger70]

Don't get involved if you do Buy /Rent  it, Your Loss if it goes Pear shape. Don't use/invest money that you can't afford to lose. 

[Lacessit]

As other posters have noted, your generosity may end in an outcome where you lose the friend.

 

Is the friend Thai? If so, the odds are fairly high any arrangement will be treated as a gift.

 

Are you buying a friendship, or attempting to reinforce it?

[FriendlyFarang]

They charge the maximum legal APR interest rate, which is 18% or so. The real interest rate is twice the stated APR interest rate, so real interest rate will be about 36%.

If you finance it over 3 years, you pay nearly twice the price for the bike, so if the bike costs 50k cash, with finance over 3 years you pay nearly 100k.

 

Don't forget, that if he rents a motorcyle from a shop they also do the servicing for him. If the bike breaks down or has a flat tire, they will pick it up and get it fixed, and if the bike can't be used for few days while it gets fixed they will provide another bike for him to use. I've even seen offers like "once a week free cleaning included". Will you also provide these services to your friend?

[CLW]

3 hours ago, FriendlyFarang said:

They charge the maximum legal APR interest rate, which is 18% or so. The real interest rate is twice the stated APR interest rate, so real interest rate will be about 36%.

If you finance it over 3 years, you pay nearly twice the price for the bike, so if the bike costs 50k cash, with finance over 3 years you pay nearly 100k.

 

Don't forget, that if he rents a motorcyle from a shop they also do the servicing for him. If the bike breaks down or has a flat tire, they will pick it up and get it fixed, and if the bike can't be used for few days while it gets fixed they will provide another bike for him to use. I've even seen offers like "once a week free cleaning included". Will you also provide these services to your friend?

That is simply not true. At least not for small cc motorcycle. I'm currently having an installment for Honda scooter. With 20k down payment it's 0,59 % interest. Directly from Honda dealership

[papa al]

Sounds like a great plan

go for it.

[FriendlyFarang]

3 hours ago, CLW said:

That is simply not true. At least not for small cc motorcycle. I'm currently having an installment for Honda scooter. With 20k down payment it's 0,59 % interest. Directly from Honda dealership

Just because you got some promotional interest rate (your 0.59% are by the way also APR and per month, so you still pay 14.16% real interest rate per year) doesn't mean that what I say is wrong in general. Most people pay much more interest than you pay.

Here for example a random article that popped up on Google about the Honda click: https://www.ananmoney.com/honda-click125i/

Quote

ดอกเบี้ย : เริ่มต้นที่ 1.59% – 1.99% ต่อเดือน*

This is per month and APR, real interest rate would thus be 38 to 48% per year.

Edited April 14, 2022 by FriendlyFarang

[Kenneth White]

Borrowing money or lending money to a family member or friend is kind of risky. Never assume you will be paid back. Its like gambling if you have disposable income you can afford losing then go ahead. I have lived in Thailand for 10 year with my wife, and seems I am the family ATM. I hardly ever get paid back.

[Chongalulu]

23 hours ago, CLW said:

That is simply not true. At least not for small cc motorcycle. I'm currently having an installment for Honda scooter. With 20k down payment it's 0,59 % interest. Directly from Honda dealership

What do you mean " 0,59% interest" ?..and have you calculated the annual APR %? When a dealer quotes an annual interest rate ,those total charges are added on to the total loan and divided by the length of the loan to arrive at a monthly payment. Because you are paying back the capital sum in parts during the whole period you are still being charged the "interest rate" on the whole loan. So halfway through the plan when you’ve paid off half the capital sum you’re still being charged interest on the whole loan ! 
Therefore the actual rates you are paying (APR ) are roughly double the quoted annual rate. 

[Henryford]

BUY, they charge 2% PER MONTH.

[CLW]

23 hours ago, nchuckle said:

What do you mean " 0,59% interest" ?..and have you calculated the annual APR %? When a dealer quotes an annual interest rate ,those total charges are added on to the total loan and divided by the length of the loan to arrive at a monthly payment. Because you are paying back the capital sum in parts during the whole period you are still being charged the "interest rate" on the whole loan. So halfway through the plan when you’ve paid off half the capital sum you’re still being charged interest on the whole loan ! 
Therefore the actual rates you are paying (APR ) are roughly double the quoted annual rate. 

Thanks for explanation. But even with 1,2% annual interest rate it is less than inflation rate and a good deal to finance a vehicle.

[FriendlyFarang]

5 hours ago, CLW said:

Thanks for explanation. But even with 1,2% annual interest rate it is less than inflation rate and a good deal to finance a vehicle.

1.2% per month, not per year.

[OneMoreFarang]

Once I looked a 150cc bike and they offered something like 2% finance. I thought: that sounds good. 2% per year is a good rate.

But then they told me it's 2% per month...

That was many years ago, I have no idea about current rates and prices.

[BritManToo]

Just now, OneMoreFarang said:

Once I looked a 150cc bike and they offered something like 2% finance. I thought: that sounds good. 2% per year is a good rate.

But then they told me it's 2% per month...

That was many years ago, I have no idea about current rates and prices.

My daughter bought a 64k Honda Click 150i, total cost over 5 years 120kbht.

[OneMoreFarang]

13 minutes ago, BritManToo said:

My daughter bought a 64k Honda Click 150i, total cost over 5 years 120kbht.

No daddy, it was only 2000 per month. ???? 

[CLW]

Can someone explain yearly and monthly interest rate. What the difference? 2 percent is two percent....

[FriendlyFarang]

3 hours ago, CLW said:

Can someone explain yearly and monthly interest rate. What the difference? 2 percent is two percent....

But in case of monthly you get charged 2% interest every month, in case of yearly only once a year.

2% per month = 24% per year

 

[hughrection]

On 4/14/2022 at 2:13 PM, CLW said:

That is simply not true. At least not for small cc motorcycle. I'm currently having an installment for Honda scooter. With 20k down payment it's 0,59 % interest. Directly from Honda dealership

Per month on the outstanding balance. 

[CLW]

The finance company called to come tomorrow to sign the documents. It's Krungsri finance. They confirmed that the rate of 0,59 % is the effective, yearly rate.

[PJ71]

On 4/13/2022 at 2:41 PM, CharlieH said:

From what I have seen, around 50% over 4 years.and they also offer upto 7 yr !

 

Thais generally couldnt careless and dont think of the actual price being paid, they only think about what they have to pay each month and can they make that.

 

Correct, possibly more.

 

Someone i know recently bought a new bike at about 56K (ish), they're going to end up paying more than 90K (ish) but don't care, so long as they can find the monthly payment.

 

I thought about buying it for them and letting them pay me back at cost price, i quickly came to my senses and scrapped that idea.