Finance On New Car

[WHITESAND]

Tisco finance through a toyota dealer main dealer. The interest on a 48 month finance on a new car is worked out in advance, so even in the 4th year I will be paying 2.9% of the original price, so in reality it is 11.6% of the orginal loan. Is this normal for car finance?

[dave_boo]

Yes.

They figure your payments and then put the 2.9% yearly interest on each 12 months.

[gmac]

Tisco finance through a toyota dealer main dealer. The interest on a 48 month finance on a new car is worked out in advance, so even in the 4th year I will be paying 2.9% of the original price, so in reality it is 11.6% of the orginal loan. Is this normal for car finance?

Yes, they add the interest at the outset but the true rate is around 5.5% not the 11.6% you quote so not quite so bad. (Just ran it through an Excel payment calculator!)

[aussiebebe]

When I first came to Bangkok, I bought a second-hand Toyota using finance and was shocked by the interest. To this day I've no clue how they worked it out, but on a 260,000baht debt, I was charged 35,000baht interest over a two-year period. That figure included some form of tax and was through a finance company to Kinatarin Bank (forget the spelling). Never again! That was a lesson learnt for sure.

Since that time, my financial situation improved and I stuck to buying new cars, yet the terms of interest were far worse than originally quoted and I've no idea why. For example, when buying my current car (Wish) I was quoted 2.3% (this was two years ago) and yet the real amount I ended up paying was more like 6%.

[bojo]

Tisco finance through a toyota dealer main dealer. The interest on a 48 month finance on a new car is worked out in advance, so even in the 4th year I will be paying 2.9% of the original price, so in reality it is 11.6% of the orginal loan. Is this normal for car finance?

It's a pretty good deal as second hand cars are around 5% and money lenders 3% a month no less.

Our Jazz works out at 2.8% on capital per annum. Why pay cash when the interest is so low.

Regards bojo

[prakhonchai nick]

Buy a new car on credit rather than cash

Assuming you have the cash - become a loan shark for the duration of the car finance - lend out the money to reliable people (with a guarantee) at a rate of up to 3% a month. That way the new car is practically FREE!

[prakhonchai nick]

dual posting - 2nd one withdrawn

Edited August 2, 2009 by prakhonchai nick

[philo]

I have a car that was bought on 20 % downpayment, the rest financed over 6 years (stupid, too long). The car is now 3.5 y.o. and I would like to get rid of the debt now that I still have some bank savings. I have two children, living on a pension and we use more than the pension almost every month.

My finance was the same as the OP, they said (something like) 4% but it turned out to be effectivly much higher.

I have payd half of the 72 installments. If I want get rid of the debt now, is there any way I could negociate with the finance company / bank to just pay half of the original debt + some compensation, and then evrybody is ok.

It feels kind of stupid to pay a high interest for the remaining 36 months even if the debt is cleared.

Anybody knows?

Thanks

[thaicbr]

Well i just worked it out and my 200,000b loan at 4.55% per year is cheaper by 1,000baht a month than a personal loan from Halifax Building society for the same length of time. So i'm happy