I Wondered Why Cars Are So Expensive In Here

[WarpSpeed]

The automotive industry is very important to Thailand so they feel there is a need to protect themselves from foreign imports thus making imports more expensive in relation to those made here in Thailand.

They're all "foreign imports" just assembled here and still of foreign corporations as Thailand has no automobile manufacturers of their own. By any definition it's silly economics..

to qualify as a Thai made car, +80% of the parts its made from must be manufactored in Thailand. If not, its a CKD like BMW, Benz and Volvo. They are assembled here. The rest are made here, from mainly Thai made parts including bodys.

hmm, silly economics, that must be US car makers who would all be dead by now without US tax payers money.

Car makers in Thailand make money, and employ a few million people. All are owned at least 51% by Thai nationals

Thailand is the largest pickup exporter in the world. In addition they export parts (including bodys) to assemble another 30% of their pickup output in other countries. Thai plants cant presently handle larger output

Corporates like Nissan choose Thailand as one of 3 plants to manufactor their word model March/Micra

Canada does not have any brand name of their own either. Huge automotive industry tho

The silly economics I was referring to was over-taxing everything else but pick up trucks and cookie cutter, shit boxes with no originality.. There are no such restrictions on imports sold in the US which is why the U.S. auto industry almost tanked but as long as things are equal and prices are not fixed the US invites competition as it improves the breed and we all benefit..

[jb5music]

The automotive industry is very important to Thailand so they feel there is a need to protect themselves from foreign imports thus making imports more expensive in relation to those made here in Thailand.

It is not uncommon for business or other groups such as unions to feel threatened by foreign competion and for governments to protect them. Other examples would be the steel industry in the USA where duties for some products from China reach 450 % (steel drilling tubes) or the UK which for some reason need to protect the ring binder mechanism industy from the evils of Thai competion and impose an addition 17.2% duty on products from there.

Malaysia has it's own car manufacturing company called Proton. What exact brand name of Thai local auto manufacturing company are you talking about? There's no such thing is there.

[Atmos]

no shortage of info - a Google search (news) for 'thailand car manufacture' brings up plenty of recent items

SOURCE Thailand Board of Investment

Jul. 18, 2011 (PR Newswire US) --

Thailand Emerges as Global Hub for Fuel Efficient and Environment Friendly Car Manufacturing

PR Newswire

BANGKOK, July 18, 2011

BANGKOK, July 18, 2011/PRNewswire/ -- From its position as the world's No. 1 producer of one-ton pickup trucks, Thailandis quickly emerging as a global hub for fuel efficient, eco-friendly car manufacturing, with EURO-4emission standards and a fuel economy of nearly 50 miles per gallon. Six of the world's top auto producers have based their fuel efficient car production in Thailandin recent years.

Boding well for the country's eco-car future is the Obama administration's plan to require new cars sold in the U.S. to have a fuel economy of 56.2 miles per gallon by 2025. As the 12th largest auto producer in the world, Thailandoffers car producers working under the new fuel requirements a robust auto-making infrastructure built over two decades and easy access to Southeast Asia's 592 million consumers.

This year, Thailand's passenger car production has surpassed an annual capacity of 558,000 automobiles per year with support and attractive incentives offered from the Thai government to auto producers that encourage new investment in fuel efficient car production. Recent news includes:

• Ford Thailandannounced its Ford Fiesta helped year-over-year May sales grow by 327 percent.
• Mitsubishi recently made its largest Thailandinvestment to date, and largest investment outside of Japan, by building a $535 millionGlobal Small Concept vehicle in Thailand, due in 2012.
• Two major eco-car launches successfully took place from Thailand: Honda's Brio and Nissan's March. The companies also plan to launch four-door eco-car models from Thailandin the next two years.

Auto companies and their suppliers have looked to Thailandfor decades because it has the highest production capacity in the region with more than 1.6 million vehicles produced and more than $1 billioninvested by global vehicle makers in 2010. Thailandis expecting another $1.3 billionin investment this year.

[Atmos]

and a few more news items - full articles at links in headers.

The car industry here appears to have a strong future.

Toyota considers fourth car factory in Thailand

24 May 2011

Toyota seems poised to set up another manufacturing operation in Thailand and join the growing number of companies building small cars there.

Most Hondas sold in Australia now come from Thailand and Nissan began making the Micra hatch there last year. Mitsubishi is poised to follow with the replacement for its Colt small hatch. Suzuki too is looking at a Thai car-building operation.

Now Toyota is considering using Thailand as a base for its next Yaris small car, so that it can remain price competitive with its peers.

The Thai-made Nissan Micra starts from $13,990 while the Japanese-made Toyota Yaris starts from $15,990 in the price-sensitive market. Australia also has a free trade agreement with Thailand.

Manufacturing in Thailand greening the streets of America

July 18 2011

The world's foremost producer of one-ton pickup trucks, Thailand, is quickly becoming the golden gate to the greening of fuel efficient, eco-friendly car manufacturing. Here cars complete with EURO-4 emission standards and fuel economy nearing 50 mpg are produced, Six of the world's top automakers have recently based their fuel efficient car production in Thailand.

A portent of the country's eco-car future is the CAFE plan which may require new cars sold in the U.S. to have a fuel economy of 56.2 miles per gallon by 2025, though currently the administration is implying there might be a little wiggle room allowed.

Thailand is the 12th largest auto producer in the world, offering car producers working under the new fuel requirements a robust infrastructure built over the last two decades and easily accessible to Southeast Asia's 592 million consumers.

Honda

Currently, Honda manufacturing facilities in Thailand are highly acclaimed in respect to production quality, receiving an ISO 9002 certificate in recognition of quality management excellence in 1998 and an ISO 9001:2000 standards in 2001, and awarded an ISO 14001 certificate for excellence in environment management in 1999. All these, of course, reaffirm Honda's leading position among Thailand's automobile manufacturers along, not to mention the company's leadership in respect to environmental conservation.

At present, Honda's largest manufacturing facilities in Asia are located in Thailand. Not counting those in Japan, the Thai facilities constitute one of Honda's three largest manufacturing units worldwide. Consequently, customers can rest assured that the quality of Honda cars and parts manufactured in Thailand is up to international standards, and thus can compete proudly in international markets.

and from yesterday

2012 car production forecasted at 2mn units

BANGKOK, 26 July 2011 (NNT)

The Thai Automotive Industry Association (TAIA) expects Thailand's car production to rise to two million units in 2012 thanks to high demand in the market.

According to TAIA President Piengjai Kaewsuwan, the vehicle production in this year would reach the original target of 1.8 million units despite the devastation from the twin catastrophes in Japan in March while the figure for next year is expected to rise further to two million units.

[Orac]

The automotive industry is very important to Thailand so they feel there is a need to protect themselves from foreign imports thus making imports more expensive in relation to those made here in Thailand.

It is not uncommon for business or other groups such as unions to feel threatened by foreign competion and for governments to protect them. Other examples would be the steel industry in the USA where duties for some products from China reach 450 % (steel drilling tubes) or the UK which for some reason need to protect the ring binder mechanism industy from the evils of Thai competion and impose an addition 17.2% duty on products from there.

Malaysia has it's own car manufacturing company called Proton. What exact brand name of Thai local auto manufacturing company are you talking about? There's no such thing is there.

Erm, I never mentioned a brand. All I said was that the automotive industry was important here.

I did make a mistake in refering to import duties however when the OP is talking about excise duties/car tax.

[katabeachbum]

The automotive industry is very important to Thailand so they feel there is a need to protect themselves from foreign imports thus making imports more expensive in relation to those made here in Thailand.

It is not uncommon for business or other groups such as unions to feel threatened by foreign competion and for governments to protect them. Other examples would be the steel industry in the USA where duties for some products from China reach 450 % (steel drilling tubes) or the UK which for some reason need to protect the ring binder mechanism industy from the evils of Thai competion and impose an addition 17.2% duty on products from there.

Malaysia has it's own car manufacturing company called Proton. What exact brand name of Thai local auto manufacturing company are you talking about? There's no such thing is there.

Erm, I never mentioned a brand. All I said was that the automotive industry was important here.

I did make a mistake in refering to import duties however when the OP is talking about excise duties/car tax.

Importduty on cars to TH not manufactored in ASEAN is 80%, and as excicetax is based on cars Cif value and importduty, importduty does indeed have an impact on cars price

[CaptHaddock]

There are no such restrictions on imports sold in the US which is why the U.S. auto industry almost tanked but as long as things are equal and prices are not fixed the US invites competition as it improves the breed and we all benefit..

That claim overlooks important history. During the 70's the US imposed "voluntary" restrictions on the number of cars the Japanese could import into the US. These restrictions added over $1000 to the cost of a US car at the time. In addition, the govt bailed out Chrysler with direct cash inflows. The two actions taken together are the only reason that Chrysler survived, although Lee Iacocca subsequently enjoyed an underserved reputation as a turnaround "genius."

There are many other restraints to free trade in the US, e.g. restrictions on immigrations of foreign-trained doctors and other medical professionals, whose immigration could help lower health-care costs. Or foreign banks: both Canadian and Indian foreign banks did not risk collapse during the 2008 financial crisis because they had not exposed themselves excessively to credit risks as the US banks did. Instead of bailing out the failed US banks retaining their inept management, the govt could have invited in Canadian and Indian banks and provided them with the bailout funds which they would then have been able to lend since they did not have seriously impaired balance sheets.

Edited July 27, 2011 by CaptHaddock

[Nisa]

I think we may be confusing terminology. A Lease, in a sense, is nothing more than a rental agreement that includes a buyout option. What you are describing is a standard financed purchase. Leases, at least in the US, are tax deductible as an operating expense and why companies often choose to lease. However, the vast majority of the public leasing are simply doing so because it requires less money to start a lease (no down payment, since you are not buying it) and monthly payments are significantly less because you are only paying for the use of the car. At the end of the lease you have the option to buy off thee vehicle for the residual amount. In a sense, if you decide to purchase the care after the lease, it is like making the down payment at the end but you typically end up paying much more than if you simply purchased the vehicle.

Not sure about Thailand but leasing companies and finance companies are usually one in the same ... a bank of financial institution. There going out of business would simply means loans and leases would be passed off to the purchaser of the financial institutions assets. A lease vs. finance doesn't have anything to do with what happens to the financial institution. In both cases you have a contract and in both cases you are not the title holder of the vehicle unless all financial obligations to the financial institution are met. In reality a lease is also financing (there is an interest rate) but you simply are financing the use of the vehicle as opposed to the purchase of a vehicle.

A lease offers a significantly lower payment and was why I was wondering if cars are typically leased in Thailand or if the interest rate on a purchase is significantly lower since payments seem to be fairly low..

I fail to see how American lease conditions and terminology affect Thai lease conditions. I have made a picture of how it is in Thailand.

Added info would be,

typical downpayment is 25%,

and interest is fixed for the whole financeperiod and usually 2-3,5% of the initially borrowed/leased amount

To put it simple, sticker price, ad 6-11% finance cost over 4 years, and youv got the cars total price to become owner in 4 years

Lease amounts are deductable for tax reasons both for individuals and co ltd

The concept of lease over purchase don't differ between country. You can call it a lease all you want but when you finance purchasing a vehicle it is a PURCHASE. When you finance "the use" of a vehicle it is a Lease.

http://dictionary.reference.com/browse/lease

http://en.wikipedia.org/wiki/Lease

http://www.leaseguide.com/lease03.htm

Edited July 27, 2011 by Nisa

[samran]

I think the talk about tariffs also is a little misleading.

I'm guessing that a fair chunk of the vehicles produced in Thailand would be exported from a BOI trade zone, meaning that they'll never be touched by Thai taxes.

As already mentioned, it is the free trade agreements with ASEAN and Australia/NZ which makes the cause for Thai manufacture interesting.

[chops]

You ever wonder why they tax BMW's and Merc's so much ? Only rich Thai's can afford them. So they get lots of face when they drive around in their beamer. You imagine what would happen if they change the tax laws and suddenly lots of average Thai's are driving BMW's like in the UK. Would never happen. Some Thai's spend more on their car than they do on their house !

I've seen some very expensive Benzes parked out in front of very cheap houses(5k a month kind).

[katabeachbum]

I think we may be confusing terminology. A Lease, in a sense, is nothing more than a rental agreement that includes a buyout option. What you are describing is a standard financed purchase. Leases, at least in the US, are tax deductible as an operating expense and why companies often choose to lease. However, the vast majority of the public leasing are simply doing so because it requires less money to start a lease (no down payment, since you are not buying it) and monthly payments are significantly less because you are only paying for the use of the car. At the end of the lease you have the option to buy off thee vehicle for the residual amount. In a sense, if you decide to purchase the care after the lease, it is like making the down payment at the end but you typically end up paying much more than if you simply purchased the vehicle.

Not sure about Thailand but leasing companies and finance companies are usually one in the same ... a bank of financial institution. There going out of business would simply means loans and leases would be passed off to the purchaser of the financial institutions assets. A lease vs. finance doesn't have anything to do with what happens to the financial institution. In both cases you have a contract and in both cases you are not the title holder of the vehicle unless all financial obligations to the financial institution are met. In reality a lease is also financing (there is an interest rate) but you simply are financing the use of the vehicle as opposed to the purchase of a vehicle.

A lease offers a significantly lower payment and was why I was wondering if cars are typically leased in Thailand or if the interest rate on a purchase is significantly lower since payments seem to be fairly low..

I fail to see how American lease conditions and terminology affect Thai lease conditions. I have made a picture of how it is in Thailand.

Added info would be,

typical downpayment is 25%,

and interest is fixed for the whole financeperiod and usually 2-3,5% of the initially borrowed/leased amount

To put it simple, sticker price, ad 6-11% finance cost over 4 years, and youv got the cars total price to become owner in 4 years

Lease amounts are deductable for tax reasons both for individuals and co ltd

The concept of lease over purchase don't differ between country. You can call it a lease all you want but when you finance purchasing a vehicle it is a PURCHASE. When you finance "the use" of a vehicle it is a Lease.

http://dictionary.re...om/browse/lease

http://en.wikipedia.org/wiki/Lease

http://www.leaseguide.com/lease03.htm

If you purchase a vehicle in TH, you pay 7% VAT on the Invoice issued to you and become the registered owner. This vehicle can be used as colateral/security for a loan

If you lease a vehicle in TH, the leasecompany purchases the vehicle and has it registered in its name, deduct VAT on the Invoice issued to leasecompany, ad VAT to your monthly Invoice. The special deal in TH is, when lease is completed you become the owner and this transfer of ownership is actually free of DLT charge.

as long as the lease is runing, the vehicle is not your asset, and thus will not be affected if you go bankrupsy. As you do not own it, you are by most leasecompanies not allowed to use it outside TH, or if allowed need to have it in writing from owner (leasecompany) when crossing border

[Nisa]

I think we may be confusing terminology. A Lease, in a sense, is nothing more than a rental agreement that includes a buyout option. What you are describing is a standard financed purchase. Leases, at least in the US, are tax deductible as an operating expense and why companies often choose to lease. However, the vast majority of the public leasing are simply doing so because it requires less money to start a lease (no down payment, since you are not buying it) and monthly payments are significantly less because you are only paying for the use of the car. At the end of the lease you have the option to buy off thee vehicle for the residual amount. In a sense, if you decide to purchase the care after the lease, it is like making the down payment at the end but you typically end up paying much more than if you simply purchased the vehicle.

Not sure about Thailand but leasing companies and finance companies are usually one in the same ... a bank of financial institution. There going out of business would simply means loans and leases would be passed off to the purchaser of the financial institutions assets. A lease vs. finance doesn't have anything to do with what happens to the financial institution. In both cases you have a contract and in both cases you are not the title holder of the vehicle unless all financial obligations to the financial institution are met. In reality a lease is also financing (there is an interest rate) but you simply are financing the use of the vehicle as opposed to the purchase of a vehicle.

A lease offers a significantly lower payment and was why I was wondering if cars are typically leased in Thailand or if the interest rate on a purchase is significantly lower since payments seem to be fairly low..

I fail to see how American lease conditions and terminology affect Thai lease conditions. I have made a picture of how it is in Thailand.

Added info would be,

typical downpayment is 25%,

and interest is fixed for the whole financeperiod and usually 2-3,5% of the initially borrowed/leased amount

To put it simple, sticker price, ad 6-11% finance cost over 4 years, and youv got the cars total price to become owner in 4 years

Lease amounts are deductable for tax reasons both for individuals and co ltd

The concept of lease over purchase don't differ between country. You can call it a lease all you want but when you finance purchasing a vehicle it is a PURCHASE. When you finance "the use" of a vehicle it is a Lease.

http://dictionary.re...om/browse/lease

http://en.wikipedia.org/wiki/Lease

http://www.leaseguide.com/lease03.htm

If you purchase a vehicle in TH, you pay 7% VAT on the Invoice issued to you and become the registered owner. This vehicle can be used as colateral/security for a loan

If you lease a vehicle in TH, the leasecompany purchases the vehicle and has it registered in its name, deduct VAT on the Invoice issued to leasecompany, ad VAT to your monthly Invoice. The special deal in TH is, when lease is completed you become the owner and this transfer of ownership is actually free of DLT charge.

as long as the lease is runing, the vehicle is not your asset, and thus will not be affected if you go bankrupsy. As you do not own it, you are by most leasecompanies not allowed to use it outside TH, or if allowed need to have it in writing from owner (leasecompany) when crossing border

When you finance a vehicle, you don't own it and cannot use it as collateral as the bank holds the title.

When you finance a vehicle, since the bank owns it, you may also be restricted on where you can drive it. An example is that finance companies that I know of actually say you cannot bring the car into Mexico. One reason for this is Mexico doesn't allow for easy repossession as they do in the US.

When you finance a vehicle, the financing company is the Lien Holder of the vehicle and their name appears on the registration along with yours. This is true on a lease too but the their title is Lessor.

A lease also requires that you pay tax and it is part of your monthly payment as with finance purchase or the taxes need to be paid up front.

As for filing a BK, if you make your payments on a lease or a purchase you keep the car. In neither case of a Lease or a Purchase are you the full owner of the vehicle. However, in a purchase you may have equity in the car and this can be considered an asset. But in a lease, you have NO equity because you have NO ownership in the vehicle and your payments are NOT going to purchasing the vehicle but are ONLY going towards the use of the vehicle. So, why would a company simply give you a car at the end of the lease when you have paid NOTHING towards owning it?

The only way you can own a vehicle without paying more (the residual) at the end of the lease is if you were to pay the residual upfront which is difficult to do an eliminates many of the benefits of a lease because you have now made a commitment/contract to purchase and NOT lease ... on say a 24-month lease it is often more than 50% of the cars sticker price in the US and I would imagine more in Thailand. The residual value of a vehicle is simply the fair market value at the end of the lease.

If what you are saying is true then these leases you describe in Thailand are simply purchases with a different name because there is absolutely no difference than a purchase. No lower monthly payment, no lower up front costs, no option to buy or not at the end of the lease .... The ONLY advantage would be that they are simply calling a purchase a lease for tax reasons.

[katabeachbum]

When you finance a vehicle, you don't own it and cannot use it as collateral as the bank holds the title.

When you finance a vehicle, since the bank owns it, you may also be restricted on where you can drive it. An example is that finance companies that I know of actually say you cannot bring the car into Mexico. One reason for this is Mexico doesn't allow for easy repossession as they do in the US.

When you finance a vehicle, the financing company is the Lien Holder of the vehicle and their name appears on the registration along with yours. This is true on a lease too but the their title is Lessor.

A lease also requires that you pay tax and it is part of your monthly payment as with finance purchase or the taxes need to be paid up front.

As for filing a BK, if you make your payments on a lease or a purchase you keep the car. In neither case of a Lease or a Purchase are you the full owner of the vehicle. However, in a purchase you may have equity in the car and this can be considered an asset. But in a lease, you have NO equity because you have NO ownership in the vehicle and your payments are NOT going to purchasing the vehicle but are ONLY going towards the use of the vehicle. So, why would a company simply give you a car at the end of the lease when you have paid NOTHING towards owning it?

The only way you can own a vehicle without paying more (the residual) at the end of the lease is if you were to pay the residual upfront which is difficult to do an eliminates many of the benefits of a lease because you have now made a commitment/contract to purchase and NOT lease ... on say a 24-month lease it is often more than 50% of the cars sticker price in the US and I would imagine more in Thailand. The residual value of a vehicle is simply the fair market value at the end of the lease.

If what you are saying is true then these leases you describe in Thailand are simply purchases with a different name because there is absolutely no difference than a purchase. No lower monthly payment, no lower up front costs, no option to buy or not at the end of the lease .... The ONLY advantage would be that they are simply calling a purchase a lease for tax reasons.

You are still in USA

This is Thailand, and Thai car market and finance options

Several countries where you finance, car is security, registered in your name as your asset, and you hold the "title". I used to own a car import/export/dealer for 2 decades.

Then there is lease, as I have described, and any lease can be paid to zero value in most countrys, if you prefere. In some countries lessee is not allowed to purchase for one dollar when lease ends as it would be tax avoiding, so wife or brother purchases. In Thailand this purchase is automated, and free of DLT transfertax to lessee.

Huge difference to a purhase. Purchase is Invoiced and registered to buyer, and if you finance, you need to finance VAT to as a part of the balance. Lease is Invoiced as in previous post, and VAT is charged monthly

A loan finance with car as security is free of VAT on monthly payments, as you as buyer have paid VAT on your purchase

A lease, you have never purchased, so Invoice is to buyer = leasecompany, and as it is a lease, they must charge you VAY on every monthly Invoice

K-lease (kasikornbanks financecompany) has information in English if you wan to learn more about Thailands financeoptions for car.

To make it short, leasing a car in a financial healthy company is inexpensive and beneficial,, and despite the low payments, you become the owner when all payments completed. Not bad

The leases you are used to from USA do not exist here, thus the car rental companies make huge business in long term rent. Monthly lease for x years, return car to owner when agreement expired and get a new one if you want

[barryofthailand]

The main reason why cars are so expensive in Thailand is that all the parts are imported. for the cars that are assembled here, their is no import tax, but their are shipping expenses. People think the cars are made here in Thailand. not true. they are only assembled here.

Barry

[katabeachbum]

The main reason why cars are so expensive in Thailand is that all the parts are imported. for the cars that are assembled here, their is no import tax, but their are shipping expenses. People think the cars are made here in Thailand. not true. they are only assembled here.

Barry

true for benz, bmw and volvo, its called CKD (completely knocked down). Parts imported with importduty, cars assembled here

not correct for volume manufactorers as Toyota, Honda, Nissan, Mitsubishi, Mazda, Ford, Isuzu, Chevrolet, list goes on

These are made in Thailand from at least 80% Thai manufactored parts, the amount of parts required by BoI(Board of Investments) to not be considered CKD, but Thai made. Thai made car parts is a major exportindustry, in addition to supplying Thai car makers.

Same with bikes, Kawasaki Ninja650R is made in Thailand from minimum 70% Thai made parts, making it sell at half the price of imported bikes, or Thai assembled bikes like Triumph from imported parts

[Atmos]

The main reason why cars are so expensive in Thailand is that all the parts are imported. for the cars that are assembled here, their is no import tax, but their are shipping expenses. People think the cars are made here in Thailand. not true. they are only assembled here.

Barry

refer posts 33 and 34.

The word is manufactured, not assembled.

[Heng]

Cars should be more expensive. Taxes included. Fewer accidents, and fewer folks who can't really afford to be on the road (for example, the myriad number who can't afford and don't perform proper prevenative maintenance).

[Nisa]

When you finance a vehicle, you don't own it and cannot use it as collateral as the bank holds the title.

When you finance a vehicle, since the bank owns it, you may also be restricted on where you can drive it. An example is that finance companies that I know of actually say you cannot bring the car into Mexico. One reason for this is Mexico doesn't allow for easy repossession as they do in the US.

When you finance a vehicle, the financing company is the Lien Holder of the vehicle and their name appears on the registration along with yours. This is true on a lease too but the their title is Lessor.

A lease also requires that you pay tax and it is part of your monthly payment as with finance purchase or the taxes need to be paid up front.

As for filing a BK, if you make your payments on a lease or a purchase you keep the car. In neither case of a Lease or a Purchase are you the full owner of the vehicle. However, in a purchase you may have equity in the car and this can be considered an asset. But in a lease, you have NO equity because you have NO ownership in the vehicle and your payments are NOT going to purchasing the vehicle but are ONLY going towards the use of the vehicle. So, why would a company simply give you a car at the end of the lease when you have paid NOTHING towards owning it?

The only way you can own a vehicle without paying more (the residual) at the end of the lease is if you were to pay the residual upfront which is difficult to do an eliminates many of the benefits of a lease because you have now made a commitment/contract to purchase and NOT lease ... on say a 24-month lease it is often more than 50% of the cars sticker price in the US and I would imagine more in Thailand. The residual value of a vehicle is simply the fair market value at the end of the lease.

If what you are saying is true then these leases you describe in Thailand are simply purchases with a different name because there is absolutely no difference than a purchase. No lower monthly payment, no lower up front costs, no option to buy or not at the end of the lease .... The ONLY advantage would be that they are simply calling a purchase a lease for tax reasons.

You are still in USA

This is Thailand, and Thai car market and finance options

Several countries where you finance, car is security, registered in your name as your asset, and you hold the "title". I used to own a car import/export/dealer for 2 decades.

Then there is lease, as I have described, and any lease can be paid to zero value in most countrys, if you prefere. In some countries lessee is not allowed to purchase for one dollar when lease ends as it would be tax avoiding, so wife or brother purchases. In Thailand this purchase is automated, and free of DLT transfertax to lessee.

Huge difference to a purhase. Purchase is Invoiced and registered to buyer, and if you finance, you need to finance VAT to as a part of the balance. Lease is Invoiced as in previous post, and VAT is charged monthly

A loan finance with car as security is free of VAT on monthly payments, as you as buyer have paid VAT on your purchase

A lease, you have never purchased, so Invoice is to buyer = leasecompany, and as it is a lease, they must charge you VAY on every monthly Invoice

K-lease (kasikornbanks financecompany) has information in English if you wan to learn more about Thailands financeoptions for car.

To make it short, leasing a car in a financial healthy company is inexpensive and beneficial,, and despite the low payments, you become the owner when all payments completed. Not bad

The leases you are used to from USA do not exist here, thus the car rental companies make huge business in long term rent. Monthly lease for x years, return car to owner when agreement expired and get a new one if you want

http://www.hondaleasing.co.th/en/calculator_advance.php

[katabeachbum]

When you finance a vehicle, you don't own it and cannot use it as collateral as the bank holds the title.

When you finance a vehicle, since the bank owns it, you may also be restricted on where you can drive it. An example is that finance companies that I know of actually say you cannot bring the car into Mexico. One reason for this is Mexico doesn't allow for easy repossession as they do in the US.

When you finance a vehicle, the financing company is the Lien Holder of the vehicle and their name appears on the registration along with yours. This is true on a lease too but the their title is Lessor.

A lease also requires that you pay tax and it is part of your monthly payment as with finance purchase or the taxes need to be paid up front.

As for filing a BK, if you make your payments on a lease or a purchase you keep the car. In neither case of a Lease or a Purchase are you the full owner of the vehicle. However, in a purchase you may have equity in the car and this can be considered an asset. But in a lease, you have NO equity because you have NO ownership in the vehicle and your payments are NOT going to purchasing the vehicle but are ONLY going towards the use of the vehicle. So, why would a company simply give you a car at the end of the lease when you have paid NOTHING towards owning it?

The only way you can own a vehicle without paying more (the residual) at the end of the lease is if you were to pay the residual upfront which is difficult to do an eliminates many of the benefits of a lease because you have now made a commitment/contract to purchase and NOT lease ... on say a 24-month lease it is often more than 50% of the cars sticker price in the US and I would imagine more in Thailand. The residual value of a vehicle is simply the fair market value at the end of the lease.

If what you are saying is true then these leases you describe in Thailand are simply purchases with a different name because there is absolutely no difference than a purchase. No lower monthly payment, no lower up front costs, no option to buy or not at the end of the lease .... The ONLY advantage would be that they are simply calling a purchase a lease for tax reasons.

You are still in USA

This is Thailand, and Thai car market and finance options

Several countries where you finance, car is security, registered in your name as your asset, and you hold the "title". I used to own a car import/export/dealer for 2 decades.

Then there is lease, as I have described, and any lease can be paid to zero value in most countrys, if you prefere. In some countries lessee is not allowed to purchase for one dollar when lease ends as it would be tax avoiding, so wife or brother purchases. In Thailand this purchase is automated, and free of DLT transfertax to lessee.

Huge difference to a purhase. Purchase is Invoiced and registered to buyer, and if you finance, you need to finance VAT to as a part of the balance. Lease is Invoiced as in previous post, and VAT is charged monthly

A loan finance with car as security is free of VAT on monthly payments, as you as buyer have paid VAT on your purchase

A lease, you have never purchased, so Invoice is to buyer = leasecompany, and as it is a lease, they must charge you VAY on every monthly Invoice

K-lease (kasikornbanks financecompany) has information in English if you wan to learn more about Thailands financeoptions for car.

To make it short, leasing a car in a financial healthy company is inexpensive and beneficial,, and despite the low payments, you become the owner when all payments completed. Not bad

The leases you are used to from USA do not exist here, thus the car rental companies make huge business in long term rent. Monthly lease for x years, return car to owner when agreement expired and get a new one if you want

http://www.hondaleas...tor_advance.php

yes, and your point being balloon? Which I mentioned some 20 posts ago

as a balloon lease customer YOU are responsible for paying the final balloon payment, not dealer or anyone else.

[groovyc]

Question ... Are most Thais (Honda/Toyota drivers) who are driving new cars leasing or buying them?

When casually looking at new vehicles a year ago, the dealers had handouts with what your payment would be with X% down. I think these payment amounts were also in the manufacturer brochure. The payments seemed incredibly low to me and I never really got a straight answer regarding lease vs. buy but was told the car would be mine when paid off. I even think I did a quick total of the payments and they barely added up to the total vehicle cost but there seemed to be no mention of any kind of residual payment at the end as there would be for a lease if you wanted to keep the car.

Anyway, just curious if interest rates are incredibly low or if there are leases and there is a buyout option at the end.

I am sure you got something wrong there! I can't speak for current interest rates, but I know for a fact that you get charged more than they claim.

For example a 4% interest rate on a 1m loan paid in 5 yrs will cost you 1,000,000 * 4% * 5 = 200,000

Your monthly payment will be 1.2m/ (5*12) = 20,000 plus VAT

ie. you will be paying interest for the WHOLE capital for the ENTIRE period of time, giving an effective interest rate of more than double the 4% promised.

(I am not even sure if this is how it is done in other countries, coz I've never taken a lease elsewhere. Either way, I consider it a scam)

[vpi78]

The main reason why cars are so expensive in Thailand is that all the parts are imported. for the cars that are assembled here, their is no import tax, but their are shipping expenses. People think the cars are made here in Thailand. not true. they are only assembled here.

Barry

You are either an idiot or you have never been to a Thai automobile facility, probably both.

Then there is the poster that thinks Thai pricies for Japanese cars are so much less expensive than in the US. Are you on drugs? A well equipped 6-cylinder Honda Accord will go for 2 million baht in Thailand or about 65 -70,000 George Washingtons. Even in his best fantasy a dealer will not get 35,000 for the same product in the US.

[katabeachbum]

The main reason why cars are so expensive in Thailand is that all the parts are imported. for the cars that are assembled here, their is no import tax, but their are shipping expenses. People think the cars are made here in Thailand. not true. they are only assembled here.

Barry

You are either an idiot or you have never been to a Thai automobile facility, probably both.

Then there is the poster that thinks Thai pricies for Japanese cars are so much less expensive than in the US. Are you on drugs? A well equipped 6-cylinder Honda Accord will go for 2 million baht in Thailand or about 65 -70,000 George Washingtons. Even in his best fantasy a dealer will not get 35,000 for the same product in the US.

Accord 3,5 V6 loaded is 2.940.000 baht. Engine and many parts imported, top excicetax above 3000cc/220hp. TH sales isnt that great

Accord 2,0 with leather and some goodies is 1.265.000 baht, Thai made from Thai parts

[JeffreyMcCollum]

I get it, it is simple.

The luxury things have higher tax

The low priced and every day things do not. Thus the poor people live nearly Tax free and those of us who desire better also pay tax.

With little or not property tax. The goevrnment gets it's money from imports we desire and luxury items.

Seems like the fairest system I have ever seen or lived with

[katabeachbum]

I get it, it is simple.

The luxury things have higher tax

The low priced and every day things do not. Thus the poor people live nearly Tax free and those of us who desire better also pay tax.

With little or not property tax. The goevrnment gets it's money from imports we desire and luxury items.

Seems like the fairest system I have ever seen or lived with

yep

2 door pickups 3% excicetax. luxury import cars 280% duty/taxes

lao kao cheap. fancy red wines taxed and expenisve