97000 Baht For A Honda Click ?

[pattayadingo]

I'm not sure if this should be here or in the business / finance section. Mods feel free to move this if they feel it better elsewhere

A new Honda Click for 36000 Baht. 36 monthly payments of 2700 Baht. That equals near enough 97000 Baht for a Honda Click. It seems an insane amount of money to me. And yes, I have seen the payments being made.

Some questions......

Is this usual practice here in Thailand for credit for a m/c like this one?

Is this not excessive?

Without seeing the actual agreement, would this sort of finance arrangement be able to be paid off in one lump sum minus the interest?

Thanks for any useful info.

[TommoPhysicist]

A new Honda Click costs 48-53k depending on model.

[MAJIC]

I paid 46000 baht for my Click 110 cc three years ago,so they have come down in price considerably.

I can't believe someone would pay 3 times the cash price for this scooter,on HP,surely a mistake somewhere???

[SumetCycle]

Because of the price I'm guessing it is second hand. That works out to about 4.8% interest per month, way too much. It should be 2.2 - 3.0% per month at the most.

[TommoPhysicist]

I paid 46000 baht for my Click 110 cc three years ago,so they have come down in price considerably.

I can't believe someone would pay 3 times the cash price for this scooter,on HP,surely a mistake somewhere???

Did you bother to read my post?

Too many people on this forum posting without reading IMHO.

Edited September 28, 2012 by TommoPhysicist

[BSJ]

3% a month is loan shark territory! Is that on the outstanding balance or the original sum lent?

[scotto]

Yes usual practice here in thai when i first met my wife she was paying off her honda

i offered to pay it outright and was told cannot have to make monthly payments till the end of contract

and yes they are sharks they no not many thais can pay for a bike outright so they bend them over for 3yrs.

[pattayadingo]

Yes usual practice here in thai when i first met my wife she was paying off her honda

i offered to pay it outright and was told cannot have to make monthly payments till the end of contract

and yes they are sharks they no not many thais can pay for a bike outright so they bend them over for 3yrs.

Thanks for this.

The idea of making monthly payments until the end of the contract is horrendous. This is what I was not really wanting to hear but I did expect to hear.

I will have to check on the contract details when we go up to Roi Et and then make a decision on what to do.

Do you (or others) know what would happen if the payments simply stopped and they repossessed the bike? Would there be some penalty or enforcement of the interest payments?

[pattayadingo]

3% a month is loan shark territory! Is that on the outstanding balance or the original sum lent?

Until I can get to see the contract - that is in Roi Et - I am uncertain. All I know at the moment is that it is 36 monthly payments of 2700.

[TommoPhysicist]

Do you (or others) know what would happen if the payments simply stopped and they repossessed the bike? Would there be some penalty or enforcement of the interest payments?

No credit for ten years.

[pattayadingo]

Because of the price I'm guessing it is second hand. That works out to about 4.8% interest per month, way too much. It should be 2.2 - 3.0% per month at the most.

I agree it is way too much. Horrifying amount of interest.

[pattayadingo]

I paid 46000 baht for my Click 110 cc three years ago,so they have come down in price considerably.

I can't believe someone would pay 3 times the cash price for this scooter,on HP,surely a mistake somewhere???

Depends on your credit / repayment history previously?

I do not think many Thai people take full consideration of what they are really paying in total. But this amount does seem way over the top to me, which is why I was asking

[TommoPhysicist]

Paying this amount in interest is not daft at all, if you don't have the cash.

3k a month is affordable (same as rental but you keep the m/c at the end) , especially if you can find a foreigner daft enough to pay it off for you. (In which case you wouldn't care if it were twice as much, cos not your money)

Edited September 28, 2012 by TommoPhysicist

[transam]

Near 100K for a click. Sounds like ''off shore'' money lenders here.

[Rancid]

Well, getting screwed by bankers or related (often susbsidiary) finance companies has always been the western way, good to see the Thais are getting on board the joys of debt slavery. When you see the signs for almost zero deposit loans with easy approval there are two things in play, one that the buyer will get screwed with payments they probably can't afford and the other that a tipping point is approaching as the mania phase of a bubble is in play. Sharks getting bloated on minnows.

[cbrer]

Near 100K for a click. Sounds like ''off shore'' money lenders here.

Sounds like someone (or his GF) paying for a family member's loan here.

I'm sure he'll get to the bottom of it when he gets back to Roi-Et.

Edited September 28, 2012 by cbrer

[transam]

Near 100K for a click. Sounds like ''off shore'' money lenders here.

Sounds like someone (or his GF) paying for a family member's loan here.

I'm sure he'll get to the bottom of it when he gets back to Roi-Et.

Perhaps the family Buffalo now has a cool colour scheme.

[NomadJoe]

I paid 46000 baht for my Click 110 cc three years ago,so they have come down in price considerably.

I can't believe someone would pay 3 times the cash price for this scooter,on HP,surely a mistake somewhere???

Did you bother to read my post?

Too many people on this forum posting without reading IMHO.

I would imagine quite a few people have you on ignore TP. That could explain it.

[pattayadingo]

Not a case of buffalo either. Nor foreigner money rates. I did say I have seen the payments being made. The payments are done through 7/11.

But I can see that people with little or no credit history or previously failed payments might pay extra but this does seem very high. Extortionate, in fact. Maybe this shows why so many do get their bikes repossessed.

No, I am not going to walk in there and pay the bike off and she does pay it herself, though I did give her 500 towards the last payment. That does not stop me thinking about people being ripped off.

[Newguy70]

Some questions......

Is this usual practice here in Thailand for credit for a m/c like this one?

I asked the family about credit in Surin when I 1st moved to Thailand, and the answer was yes. I have always purchased everything outright via cash (Then again I'm able to understand financing).

Is this not excessive? Yes.

I think that most people who sign these types of deals either. . .

a. don't understand the structure

b. understand the structure but don't care

c. understand the structure but have no alternative financing

Edited September 29, 2012 by Newguy70

[cbrer]

d. Have a foreigner in the family so know that they'll pay it off as soon as there's a tear shed.

[soi41]

Not a case of buffalo either. Nor foreigner money rates. I did say I have seen the payments being made. The payments are done through 7/11.

But I can see that people with little or no credit history or previously failed payments might pay extra but this does seem very high. Extortionate, in fact. Maybe this shows why so many do get their bikes repossessed.

No, I am not going to walk in there and pay the bike off and she does pay it herself, though I did give her 500 towards the last payment. That does not stop me thinking about people being ripped off.

PD on a low-season-mission to save the BG's. Farang jai dee! Btw the 500 is called a barfine!

[rixalex]

Paying this amount in interest is not daft at all, if you don't have the cash.

3k a month is affordable (same as rental but you keep the m/c at the end) ,

It is daft actually. If you can afford 3k a month, why not just put 3k aside every month yourself, and after a year, buy something outright for 36k. Or wait 18 months and you'll have enough money for a new Click. Problem is people want things instantly, can't be bothered to wait, so they end up paying two, three times the amount. This sort of "must have it now" mentaliity is understandable with 5 year olds, but why adults behave in the same way, i really don't know. Still, great business for the credit companies and loan sharks.

[SumetCycle]

3%, while high, is not a loan shark rate. They charge more like 10-20% per month. One could certainly borrow money off a loan shark and go buy a bike. However, when you finance through a dealer, you will either get the dealer's registered finance company or other registered finance companies such as Krungsri Leasing, Summit Capital, etc..

Edited September 29, 2012 by SumetCycle

[TommoPhysicist]

I'm fairly sure many of the girls in Pattaya make very few repayments themselves.

So how much the repayments are, hardly matter.

[JeffreyMcCollum]

When I met my wife she had a good job paying over 15,000 Bt a month

She had purchased a wave with 5000 down and every month paid "Easy Buy" 1400 Bt nearly 3 years later I asked what debit she had before we married and she said the motorbike. we checked the balance owed and it was 56,000 bt on the 36,000 wave she got. We paid in full and it was a lesson, In total nearly 3 times the price, All she thought about was she could easily make the 1400 a month payment and not the total. to be paid

Out in the country they also do this with Home items like TV washers and refrigerators

[cbrer]

Paying this amount in interest is not daft at all, if you don't have the cash.

3k a month is affordable (same as rental but you keep the m/c at the end) ,

It is daft actually. If you can afford 3k a month, why not just put 3k aside every month yourself, and after a year, buy something outright for 36k. Or wait 18 months and you'll have enough money for a new Click. Problem is people want things instantly, can't be bothered to wait, so they end up paying two, three times the amount. This sort of "must have it now" mentaliity is understandable with 5 year olds, but why adults behave in the same way, i really don't know. Still, great business for the credit companies and loan sharks.

Perhaps the 3k payments couldn't be put aside if they didn't have a vehicle and thus had to rely on public transport.

I thought that even a 5 year old could see that as a realistic possibilty.

[nikster]

When I met my wife she had a good job paying over 15,000 Bt a month

She had purchased a wave with 5000 down and every month paid "Easy Buy" 1400 Bt nearly 3 years later I asked what debit she had before we married and she said the motorbike. we checked the balance owed and it was 56,000 bt on the 36,000 wave she got. We paid in full and it was a lesson, In total nearly 3 times the price, All she thought about was she could easily make the 1400 a month payment and not the total. to be paid

Out in the country they also do this with Home items like TV washers and refrigerators

Yeah, I think a lot of Thais are just really weak in math. Like you said, they only think about whether or not they can afford the loan payment, not about how much interest they're going to pay.

The other side is that this probably also means that loan defaults are very common. Which in turn would increase the risk, and the rates...

[naboo]

When I met my wife she had a good job paying over 15,000 Bt a month

She had purchased a wave with 5000 down and every month paid "Easy Buy" 1400 Bt nearly 3 years later I asked what debit she had before we married and she said the motorbike. we checked the balance owed and it was 56,000 bt on the 36,000 wave she got. We paid in full and it was a lesson, In total nearly 3 times the price, All she thought about was she could easily make the 1400 a month payment and not the total. to be paid

I just did some calculations which suggest this was a loan at 2.7% a month over 6 years, a rate our sponsor seems to think is acceptable. Its normal, but I'd not want to be in business selling things on finance at those rates myself. I'd rather not exploit the poor.

[SumetCycle]

When I met my wife she had a good job paying over 15,000 Bt a month

She had purchased a wave with 5000 down and every month paid "Easy Buy" 1400 Bt nearly 3 years later I asked what debit she had before we married and she said the motorbike. we checked the balance owed and it was 56,000 bt on the 36,000 wave she got. We paid in full and it was a lesson, In total nearly 3 times the price, All she thought about was she could easily make the 1400 a month payment and not the total. to be paid

I just did some calculations which suggest this was a loan at 2.7% a month over 6 years, a rate our sponsor seems to think is acceptable. Its normal, but I'd not want to be in business selling things on finance at those rates myself. I'd rather not exploit the poor.

Where on this thread did I ever say that I thought that 2.7% over 6 years was acceptable? I'm just trying to let you guys know how finance for small bikes works here, that's all. No need to shoot the messenger. By the way, most of my customers are middle class Thais and expats. No exploitation of poor people at Sumet. Take your veiled libelous words elsewhere please.