Vehicle Financing

[tigerbeer]

So I get a loan for 48 months. Interest at 3.6%p/a. Lets say a loan of 600k Baht. They calculate interest expenses at (3.6% x 4 years = 14.4%). Loan + Interest equals= 686,400 Baht. Divide that by 48 months and its 14,300 payment per month. BUT! thats not my payment. The payment is 14,300 + 7% Vat = THB15,301 per month for 48 months.

Is that the way things work around here? cause it seems like daylight robbery. Any input on this?

[katabeachbum]

second hand car, yes

new car, VAT is first deducted and later added to monthly payments, making your total payments including VAT identical to purchase price pluss agreed interest

secondhand car financing in Thailand is very expensive, VAT pluss high interest

[tigerbeer]

katabeachbum,

i looked through the whole contract again just now in detail after your explanation. what they do is minus your deposit with the vat included, the balance which is to be financed is bulked in together with interest and vat on top of that. I still feel its unfair to charge vat on interest. seems like double tax!

financing a used car is however daylight robbery on the part of the bank and finance companies. shame on them.

[thaicbr]

"financing a used car is however daylight robbery on the part of the bank and finance companies. shame on them. "

I agree it can be. Depending on where you buy from.. If a car sales tent is trying to charge 10-12% flat yearly rate or more.. But is say 4.55% daylight robbery... I'm not exactly sure how to work out the APR.

so example for those that know

230,000 principle. 48 months 5270 per month. yearly flat rate 4.55%

= what is the APR?

[thaicbr]

Ok. I checked TSB bank in the UK... the same amount over the same period would cost me more in the Uk on a personal loan than i am currently paying..about 950b per month more..(20 pound).. the APR on the TSB loan was 13.9%.