Can I Use A (Foreign) Credit Card To Help Buy A Car? Or Choose Monthly Financing?

[ywamer]

Hi all,

I've been in Thailand a few years, but have no Thai credit history. Just a plain Bangkok Bank savings account.

I recently sold my Yaris and have 400,000 in cash. Now I want to upgrade to a used Doublecab Triton or something similar - likely in the price range of 550,000 - 600,000 baht.

Question is: Instead of monthly financing, can I bring along my US credit card and pay off the balance (up to 200,000 baht) by charging it to my credit card?

I'm thinking this might be my best bet as I have relatively high credit limits on my US credit cards, and my income is sourced from the States, so paying off a credit card bill there will save me the transfer fees & hassle of paying off a high-interest loan locally.

Is this possible? Of course, a second hard car dealer will charge me an additional 3% to use my US card, so that might kill any savings.

Alternatively, has anybody here financed a used car recently? Are the rates decent? High? Absurdly high?

Cheers!

[scorecard]

I'm aware of a guy from California (spends most of his time in Thailand), who walked into a Benz showroom in Pattaya and said 'I'll take that car there' and handed over his US issued AMEX card. He did exactly the same at a volvo showroom in Bangkok. (Not a standard issue AMEX, the top of the range card.)

On both ocasions the showroom staff obviously called AMEX IN Bkk, who checked with US, all approved and completed in 5 minutes.

Edited February 4, 2013 by scorecard

[Crossy]

A used car dealer probably won't have the facilities to accept credit cards (main dealers likely will of course, people pay for servicing with them).

BUT, why not go into your local bank with your card and passport and withdraw cash over the counter, it's quick and painless and there is no 150Baht fee

[hansgruber]

If you have 50% deposit. Its easy to get finance without a work permit or job.

I'd go that route and you'll be paying less than 10k a month in repayments.

Interest rates here are near zero compared to Amex which has to be 10%+

Edited February 5, 2013 by hansgruber

[DILLIGAD]

A used car dealer probably won't have the facilities to accept credit cards (main dealers likely will of course, people pay for servicing with them).

BUT, why not go into your local bank with your card and passport and withdraw cash over the counter, it's quick and painless and there is no 150Baht fee

If Credit cards in US are simular to UK, you cannot withdraw your credit limit in cash like you suggest. Its usually something in the region of 25% allowed PLUS interest is accrued from the day of withdrawal and not after the CC statement date.

I paid a deposit by Credit card here in LOS but its worth a call to the card company first to ensure they will not see an unusual debit from Thailand as a possible fraud.

[petercallen]

I bought a Toyota vios in 2006 and did not have enough cash with me for the final payment when i picked it up

Charged 80K baht to my Australian credit card and the phuket Toyota dealer charged me a extra 3%

[petercallen]

A used car dealer probably won't have the facilities to accept credit cards (main dealers likely will of course, people pay for servicing with them).

BUT, why not go into your local bank with your card and passport and withdraw cash over the counter, it's quick and painless and there is no 150Baht fee

Cash withdrawals on credit cards are charged interest at the credit card rate from the day you withdraw the money which can be as high as 20% per annum

[Crossy]

Peter, I do of course know about the immediate interest charge on cash withdrawals, our OP was asking how he could use his card to pay for the car I cited one potential option.

[Foxhound]

If you have 50% deposit. Its easy to get finance without a work permit or job.

I'd go that route and you'll be paying less than 10k a month in repayments.

Interest rates here are near zero compared to Amex which has to be 10%+

Can you advise which local Bank or Finance Company can we approach for financing a second hand car?

I was told by a second car dealer interest rate is about 5.5% and as I did not get the car from him, hence, I did not enquire further.

[stevenl]

If you have 50% deposit. Its easy to get finance without a work permit or job.

I'd go that route and you'll be paying less than 10k a month in repayments.

Interest rates here are near zero compared to Amex which has to be 10%+

Can you advise which local Bank or Finance Company can we approach for financing a second hand car?

I was told by a second car dealer interest rate is about 5.5% and as I did not get the car from him, hence, I did not enquire further.

All second hand dealers will have finance offers. You can check out e.g. Tanachart. But also the major banks will have finance offers, and they can be cheaper, especially compared to second hand dealers.

Take into account than in Thailand 5.5% equals a lot more in western finance terms, since the interest rate here is calculated over the full amount for the whole duration of the loan. Also add VAT.

Edited February 5, 2013 by stevenl

[hansgruber]

If you have 50% deposit. Its easy to get finance without a work permit or job.

I'd go that route and you'll be paying less than 10k a month in repayments.

Interest rates here are near zero compared to Amex which has to be 10%+

Can you advise which local Bank or Finance Company can we approach for financing a second hand car?

I was told by a second car dealer interest rate is about 5.5% and as I did not get the car from him, hence, I did not enquire further.

I'm not sure about used cars but scb bank loaned my friend money for a new jazz and interest was 2.2%. 50% down and no work permit or job required.

Used car dealers charge high rates. Go see a bank.

I don't understand why someone would pay on the credit card at huge interest when the finance is available at such a low rate when buying new in Thailand.

He has 400k, use it as deposit and repayments can be under 10k a month.

Its common sense really.

[DILLIGAD]

If you have 50% deposit. Its easy to get finance without a work permit or job.

I'd go that route and you'll be paying less than 10k a month in repayments.

Interest rates here are near zero compared to Amex which has to be 10%+

Can you advise which local Bank or Finance Company can we approach for financing a second hand car?

I was told by a second car dealer interest rate is about 5.5% and as I did not get the car from him, hence, I did not enquire further.

I'm not sure about used cars but scb bank loaned my friend money for a new jazz and interest was 2.2%. 50% down and no work permit or job required.

Used car dealers charge high rates. Go see a bank.

I don't understand why someone would pay on the credit card at huge interest when the finance is available at such a low rate when buying new in Thailand.

He has 400k, use it as deposit and repayments can be under 10k a month.

Its common sense really.

Sorry to ask the obvious, but here goes anyways.......

Was this purchase was for a farang with no 'Thai' involvement? Guarantor/House Book etc??????????????

[naboo]

I bought new with 20% down and 0% finance over 4 years through Ford and Tisco. A work permit and resourceful sales manager work well together - and no Thai involvement.

2nd hand loan prices are ridiculous, and the 7% VAT addition takes the biscuit.

The OP would be better looking at a new car with his 400k down making it straightforward.

[hansgruber]

If you have 50% deposit. Its easy to get finance without a work permit or job.

I'd go that route and you'll be paying less than 10k a month in repayments.

Interest rates here are near zero compared to Amex which has to be 10%+

Can you advise which local Bank or Finance Company can we approach for financing a second hand car?

I was told by a second car dealer interest rate is about 5.5% and as I did not get the car from him, hence, I did not enquire further.

I'm not sure about used cars but scb bank loaned my friend money for a new jazz and interest was 2.2%. 50% down and no work permit or job required.

Used car dealers charge high rates. Go see a bank.

I don't understand why someone would pay on the credit card at huge interest when the finance is available at such a low rate when buying new in Thailand.

He has 400k, use it as deposit and repayments can be under 10k a month.

Its common sense really.

Sorry to ask the obvious, but here goes anyways.......

Was this purchase was for a farang with no 'Thai' involvement? Guarantor/House Book etc??????????????

Yes. Farang bought with no guarantor.

The only requirement is 50% cash down payment. No work permit.

Ask any dealership or your bank.

Bank doesn't lose if you default or complete the term. Win win for them.

[marstons]

credit card is going to be high interest rate I would imagine, UK ones certainly are, drawing cash as stated incurs interest from the minute you draw it, OP stated that 3% might kill it also no interest free time is a downer. Also it in the UK effects card holders credit rating as withdrawing cash with a credit card is seen as not a credible way to get money. From a loan point of view banks always turn me down with no work permit, even though I bring in more money than many with a work permit who can get credit. Loans are cheap money here.

[stevenl]

I bought new with 20% down and 0% finance over 4 years through Ford and Tisco. A work permit and resourceful sales manager work well together - and no Thai involvement.

2nd hand loan prices are ridiculous, and the 7% VAT addition takes the biscuit.

The OP would be better looking at a new car with his 400k down making it straightforward.

That is only possible with credit history, otherwise a higher downpayment is required.

[scorecard]

If you have 50% deposit. Its easy to get finance without a work permit or job.

I'd go that route and you'll be paying less than 10k a month in repayments.

Interest rates here are near zero compared to Amex which has to be 10%+

Can you advise which local Bank or Finance Company can we approach for financing a second hand car?

I was told by a second car dealer interest rate is about 5.5% and as I did not get the car from him, hence, I did not enquire further.

All second hand dealers will have finance offers. You can check out e.g. Tanachart. But also the major banks will have finance offers, and they can be cheaper, especially compared to second hand dealers.

Take into account than in Thailand 5.5% equals a lot more in western finance terms, since the interest rate here is calculated over the full amount for the whole duration of the loan. Also add VAT.

Take finance arranged by the car dealer (dealewr arranged it with a bank of finance co.,) and of course the dealer gets a commission. In some countries he gets a cut of every installment.

Far better to search around for direct financing with a bank etc., but keep in mind that with some banks the cost to you will be the same as taking it through the dealer. In other words the bank makes an extra (large) margin on the loan because they don't have to pay out a commission.

Check the numbers.

[keemapoot]

I'm aware of a guy from California (spends most of his time in Thailand), who walked into a Benz showroom in Pattaya and said 'I'll take that car there' and handed over his US issued AMEX card. He did exactly the same at a volvo showroom in Bangkok. (Not a standard issue AMEX, the top of the range card.)

On both ocasions the showroom staff obviously called AMEX IN Bkk, who checked with US, all approved and completed in 5 minutes.

Yes, I did the same at the Honda dealer on Rama 4 some years back, though this was a Thai-issued platinum card.

[manzan]

I bought new with 20% down and 0% finance over 4 years through Ford and Tisco. A work permit and resourceful sales manager work well together - and no Thai involvement.

2nd hand loan prices are ridiculous, and the 7% VAT addition takes the biscuit.

The OP would be better looking at a new car with his 400k down making it straightforward.

I bought new also with Ford and Tisco, with WP, 15% down , 2.5% over 4 years.

However, i do also see VAT in my repayments, but it seems they first deducted the VAT from the initial purchase sum, and are now adding it in as i pay for the car? is that the normal procedure?

[stevenl]

However, i do also see VAT in my repayments, but it seems they first deducted the VAT from the initial purchase sum, and are now adding it in as i pay for the car? is that the normal procedure?

No, you pay VAT over the finance amount, no connection with the initial purchase sum.

[Digitalbanana]

Peter, I do of course know about the immediate interest charge on cash withdrawals, our OP was asking how he could use his card to pay for the car I cited one potential option.

With tongue firmly in cheek of course.

[naboo]

However, i do also see VAT in my repayments, but it seems they first deducted the VAT from the initial purchase sum, and are now adding it in as i pay for the car? is that the normal procedure?

No, you pay VAT over the finance amount, no connection with the initial purchase sum.

On new cars there is no VAT on the loan, only on the car.

With loans for 2nd hand cars, there is VAT on the loan value.

[stevenl]

However, i do also see VAT in my repayments, but it seems they first deducted the VAT from the initial purchase sum, and are now adding it in as i pay for the car? is that the normal procedure?

No, you pay VAT over the finance amount, no connection with the initial purchase sum.

On new cars there is no VAT on the loan, only on the car.

With loans for 2nd hand cars, there is VAT on the loan value.

Sorry, from quite a few experiences: not true, there is VAT on the loan (without having all paperwork on hand I would presume on the interest).

Edit, just checked: the VAT is added on the full amount, so repayment + interest.

Edited February 6, 2013 by stevenl

[manzan]

hmm, well,when i consider the price i bought my car for, and then i deduct the downpayment, it doesnt equal the amount of the loan, it seems to be about 7% less, so logically i assumed the VAT was deducted from the purchase price , which made the loan less, and the VAT is then now monthly added to the repayments. anyone else have the same?

[naboo]

hmm, well,when i consider the price i bought my car for, and then i deduct the downpayment, it doesnt equal the amount of the loan, it seems to be about 7% less, so logically i assumed the VAT was deducted from the purchase price , which made the loan less, and the VAT is then now monthly added to the repayments. anyone else have the same?

Yes, the VAT on your monthly statement is part of the cost of the car, not VAT on the loan.

VAT is charged on the value of a loan for a 2nd hand car, but not on a new purchase car loan.

[stevenl]

hmm, well,when i consider the price i bought my car for, and then i deduct the downpayment, it doesnt equal the amount of the loan, it seems to be about 7% less, so logically i assumed the VAT was deducted from the purchase price , which made the loan less, and the VAT is then now monthly added to the repayments. anyone else have the same?

Yes, the VAT on your monthly statement is part of the cost of the car, not VAT on the loan.

VAT is charged on the value of a loan for a 2nd hand car, but not on a new purchase car loan.

Again, not true. I have the statements here in my hand proving otherwise.

[naboo]

hmm, well,when i consider the price i bought my car for, and then i deduct the downpayment, it doesnt equal the amount of the loan, it seems to be about 7% less, so logically i assumed the VAT was deducted from the purchase price , which made the loan less, and the VAT is then now monthly added to the repayments. anyone else have the same?

Yes, the VAT on your monthly statement is part of the cost of the car, not VAT on the loan.

VAT is charged on the value of a loan for a 2nd hand car, but not on a new purchase car loan.

Again, not true. I have the statements here in my hand proving otherwise.

Someone has robbed you of 7% of the loan then.

My car - 618000B. Down payment 130,000B

Financed:488,000

Monthly repayment: 10167B

*48=488000

Total cost of car - 618,000B, 0% finance

Statement quotes: 9502B repayment, 665B VAT.

The 7% on a 2nd hand car loan was the straw that broke the camel's back when looking at an ex-demo Vigo. New cars don't have it.

[stevenl]

Ah, 0% interest, so VAT is paid over 0%, making also the VAT 0% of course. But your conclusion 'no VAT over loans for new cars' is not correct.

[naboo]

Ah, 0% interest, so VAT is paid over 0%, making also the VAT 0% of course. But your conclusion 'no VAT over loans for new cars' is not correct.

So VAT is paid on the interest, not on the full amount of the loan.

Clear.

[dluek]

I looked into this last year. All the new car dealers we checked out would accept an American credit card (it's a Mastercard) and charge a fee. Used car dealers generally don't take credit cards.