New Honda Jazz Buyer

[allcladrad]

I was wondering if anyone knew a Honda car dealer that offered discounts on new hondas? I live in Chumpon and will be going to Bangkok the first of next week.

[Nickkbh]

Honda,Ram Intra-Ekkamai,gave me 20.000 bht discount.

Blew it on insurance,and a cd player.....

And chrome side mirrors.....

Love it though.

[allcladrad]

Thanks Nickkbh,

I was lured to the Honda based on their advertisement of a 3.45% loan, turns out it was really 6.7%. The finance guy multiplied the loan amount by the interest rate and multiplied that by the term of the loan. Are all Thai loans calculated that way?

[Gary A]

That interest rate is a come on. What I found was if the car is 700,000 baht and advertised for 3.5 percent interest they take off your down payment, say 100,000 then multiply the 3.5 percent times 600,000 which is 21,000 baht. They then take that figure and multiply it times the number of years, usually a five year loan. That is 105,000 over the five years. If you divide the amount loaned, 600,000 into the interest, you will find that the intertest rate is actually about 17 1/2 percent. No bargain for sure. I think that is the way they all do it. I tried to get a loan for one year and there was no way they would do that.

Thanks Nickkbh,

I was lured to the Honda based on their advertisement of a 3.45% loan, turns out it was really 6.7%. The finance guy multiplied the loan amount by the interest rate and multiplied that by the term of the loan. Are all Thai loans calculated that way?

[Thaising]

Loan interest rates are calculated this way globally or have I missed something that is not correct.

[raro]

The interest is p.a., annualized. If you run the credit over five years, of course you pay 3.5% every year.

Actually I planned to sell my car (financed by TISCO) after 18 months into a 60 month finance and learned some stunning business practice:

1) The installments have in the beginning a high content of interest and a low content of principal. Evry month this interst/principal ratio becomes a little bit better. Throughout the 60 months it does not really matter, but if you want to exit the financing earlier, you owe much more to the finance company than you expected.

2) There is something in the fineprint that you have to pay 50% of the outstanding interest if you exit the contract earlier. I argued that if I pay off the whole outstanding principal in one shot I do not owe anything anymore to TISCO, but they see that somewhat different and are bold enough to call that a "50% discount".

3) The interest rate for financing used cars is more than 1% higher than for new cars. I argued that the depreciation on new cars is higher, hence more collateral and less risk on a used one, but again, all finance companies I talked to see that differently.

As a result I kept the Jazz and did not buy the 3y old Accord in excellent condition as the deal would have been about 200k more expensive than I expected.

[allcladrad]

I expect that if we let them they will continue to use deceptive practices. In the US and Australia, at least, the lender is required to provide you with a list of loan costs and the annual percentage rate (APR). The loan I was asking for was quoted at 3.55%, however the APR was 8.25. That was for two years, they would not accept a one year loan or a smaller amount. I didn't buy the car. Inthe face of all of the evidence to the contrary the loan guy steadfastly claimed the loan was only 3.55%. I don't know if he actually believed that, that would be truly sad, or was holding the company line. They did offer me 30% "discount" if I paid early.

This is the third time I have walked away from a Thai lender. Once because of 10,000 baht in hidden costs and once because the bank wanted me to pay the interest owed by the person that they had foreclosed on. Took them 5 years to foreclose and the owner did not make any payments during that time. I guess I am missing something.