First car deal defaults jump 25 folds: Thai Excise Dept

[BSJ]

When defaults get over 2% then we worry!

[trogers]

- Brought forward many sales which makes the manufacturers and sellers' business slump after that.

- Caused a lot of bad loans to banks and finance companies.

- Caused the second hand car market to go into a slump.

Sounds like the path the real estate market is heading towards...lol

[thailiketoo]

- Brought forward many sales which makes the manufacturers and sellers' business slump after that.

- Caused a lot of bad loans to banks and finance companies.

- Caused the second hand car market to go into a slump.

Sounds like the path the real estate market is heading towards...lol

In whose dreams? A link would be nice if true.

[Soi Sauce]

- Brought forward many sales which makes the manufacturers and sellers' business slump after that.

- Caused a lot of bad loans to banks and finance companies.

- Caused the second hand car market to go into a slump.

Sounds like the path the real estate market is heading towards...lol

Definitely. With every road becoming a canyon, and developers telling customers that an overpriced small apartment in a large block is a condo m, and charging 3 times the worth of it, where is the cash in a declining economy to buy all this goimg to come from?; plus the fone, tablet, etc.

Btw, who were the main developers, and who gave the cheap home loans to buy their boxes.

Look at Myanmar and telecoms and you have your answer.

Nice ways to screw good, but uneducated people, and make yerself a fortune.

A major crash is coming.

Edited August 15, 2014 by Soi Sauce

[thailiketoo]

- Brought forward many sales which makes the manufacturers and sellers' business slump after that.

- Caused a lot of bad loans to banks and finance companies.

- Caused the second hand car market to go into a slump.

Sounds like the path the real estate market is heading towards...lol

Definitely. With every road becoming a canyon, and developers telling customers that an overpriced small apartment in a large block is a condo m, and charging 3 times the worth of it, where is the cash in a declining economy to buy all this goimg to come from?; plus the fone, tablet, etc.

A major crash is coming.

In your dreams; link please.

[Soi Sauce]

- Brought forward many sales which makes the manufacturers and sellers' business slump after that.

- Caused a lot of bad loans to banks and finance companies.

- Caused the second hand car market to go into a slump.

Sounds like the path the real estate market is heading towards...lol

Definitely. With every road becoming a canyon, and developers telling customers that an overpriced small apartment in a large block is a condo m, and charging 3 times the worth of it, where is the cash in a declining economy to buy all this goimg to come from?; plus the fone, tablet, etc.

A major crash is coming.

In your dreams; link please.

No dreams, just facts.Unless you can give me the figures otherwise.

I will respect your superior knowledge over any respected economist and financial journalist I've evr read.

[seajae]

The first car buyers programme was always going to end in disaster. There will be 50,000 - 100,000+ defaulters in this scheme

If only 500 defaulted it is a rousing success not a disaster. Better check your math.

you need to read more than the first sentence, 500 is only this year(so far), there are 12,000 not paying their money or had the cars seized but dont let the truth get in the way of praising the ptp, some people just cant help themselves.......

[thailiketoo]

The first car buyers programme was always going to end in disaster. There will be 50,000 - 100,000+ defaulters in this scheme

If only 500 defaulted it is a rousing success not a disaster. Better check your math.

you need to read more than the first sentence, 500 is only this year(so far), there are 12,000 not paying their money or had the cars seized but dont let the truth get in the way of praising the ptp, some people just cant help themselves.......

Unless you are a mind reader I'm correct and you are wrong. The USA default rate is 1.22% the Thai rate is not even close. I know you are anxious for everything Thai to fail but you are getting over anxious some people just can't help themselves. Just the facts. Just the facts. You, seeing in the future? Ya sure.

2% I would have said last year but it turned out to be less than a half of one percent. 2% was expected, 3% would be bad. When it gets close raise your hand. Would a bank loan money at a 3% default rate? You bet they would.

Not every news article is appropriately swung into the anti camp. Pick your targets a bit better.

Edited August 15, 2014 by thailiketoo

[ginjag]

OK I will try.

1 quote the poor-------------------what poor people were able to afford a 500,000 baht car when their house is only worth 50,000.

2 quote First car owners...........Are still awaiting the money back.

3....quote manufacturers............boost in sales---then---- but all sales are down now due to the selling quickly for the scheme, job losses, go-slow.

4..................................................same

5 quote oil companies...............never loose.

6 quote insurance companies ...never lose.

Not quite that simple is it.

1% default would have been over 10,000 and that would have been good but only 500 defaulted which is great. It was a great idea.

Your pro Shin agenda, has nothing to do with my post Why use mine to answer the main topic-----have you lost your way or is it you have joined the wind up gang.

You wrote, "1 quote the poor-------------------what poor people were able to afford a 500,000 baht car when their house is only worth 50,000."

The answer more than a million poor people who did not default on their loans. 500 out of 1,000,000 is a minuscule, negotiable almost non existent rate of default. Apparently you are 99.99% wrong.

You wrote, "3....quote manufacturers............boost in sales---then---- but all sales are down now due to the selling quickly for the scheme, job losses, go-slow." Increase in sales means more people employed and more money for the economy. Slow down? Link it.

You wrote, "5 quote oil companies...............never loose." If they did they would go out of business. Why would you want them to lose?

The same for insurance companies. They are in business to make money. They employ people. They drive the economic engine. You want them to lose money? Why?

Stupid reply-no comment, just a load of dung-example the "poor" 1 million were NOT poor. get it.

[CanInBKK]

An alarmingly high number of posters in this thread have a poor understanding of finance in general and mathematics in particular.

The first car scheme was a primarily 2012 focused policy. To date if there are 500-600 (~2 years combined) of the total 1 million plus cars sold in default, then that's a great NPL rate! Literally a banker's dream. Of the 12,000 loans "at risk of default", how many of those are just people who forgot to pay that month (i.e. are a couple days overdue)? This is normal of EVERY lending portfolio and should not be spun by the media to create panic and be used as fuel for slander. Lets give this scheme 2 more years when a good chunk of the loans are mature and tally the results then (note to those hoping for an NPL landslide, the default rate drops dramatically with each month as is the nature of every loan portfolio).

[ginjag]

An alarmingly high number of posters in this thread have a poor understanding of finance in general and mathematics in particular.

The first car scheme was a primarily 2012 focused policy. To date if there are 500-600 (~2 years combined) of the total 1 million plus cars sold in default, then that's a great NPL rate! Literally a banker's dream. Of the 12,000 loans "at risk of default", how many of those are just people who forgot to pay that month (i.e. are a couple days overdue)? This is normal of EVERY lending portfolio and should not be spun by the media to create panic and be used as fuel for slander. Lets give this scheme 2 more years when a good chunk of the loans are mature and tally the results then (note to those hoping for an NPL landslide, the default rate drops dramatically with each month as is the nature of every loan portfolio).

What about the rebates not paid, same the farmers ?? what about the % of others that may default, big problems here, your stance is somewhat BENT.

[northernjohn]

What a stupid scheme.

- Create a large number of sales to people who couldn't afford cars. Now they have lost their cars and their credit histories are ruined.

- Brought forward many sales which makes the manufacturers and sellers' business slump after that.

- Caused a lot of bad loans to banks and finance companies.

- Caused the second hand car market to go into a slump.

- Caused greater pollution and traffic jams.

- Made the roads more dangerous.

Yingluck should face another criminal case for this.

500 people defaulted out of over a million. Are you OK. That is a great percent. What can't you read?

According to the article you are a little bit off in your figures.

He added that there are over 12,000 cases at risk of defaults and their cars seized by leasing companies after the car buyers under the government-sponsored first-car purchase programme have failed to pay several instalments.

that doesn't even figure in the ones that never got the money in the first place remember the Government ran out of money on that one also. Plus the ones who will have to default in the future due to the rising cost of living. this popular vote getting scam is far from over.

[northernjohn]

An alarmingly high number of posters in this thread have a poor understanding of finance in general and mathematics in particular.

The first car scheme was a primarily 2012 focused policy. To date if there are 500-600 (~2 years combined) of the total 1 million plus cars sold in default, then that's a great NPL rate! Literally a banker's dream. Of the 12,000 loans "at risk of default", how many of those are just people who forgot to pay that month (i.e. are a couple days overdue)? This is normal of EVERY lending portfolio and should not be spun by the media to create panic and be used as fuel for slander. Lets give this scheme 2 more years when a good chunk of the loans are mature and tally the results then (note to those hoping for an NPL landslide, the default rate drops dramatically with each month as is the nature of every loan portfolio).

What about the rebates not paid, same the farmers ?? what about the % of others that may default, big problems here, your stance is somewhat BENT.

According to the article it is 12,000 who are several payments behind not just one day late as the PTP lovers would have you believe. I wonder how many are just one month behind working on being two months behind?

[kcore]

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It appears that we have been defaulted on , the missus bought a 1.5 in December 2012 with the promise of 100,000 back from the government and we still have nothing

The missus has never previously had a car in her name ?

Nope she passed her test in 2012 and we got a fiesta for her. She went with a bit of an angry mob to Bangkok in April this year and they promised everyone would get their money. Ive read up about it once and apparently it should happen in this tax year. To be honest its not really hurting us financially but I imagine it is hurting some people. It also doesn't instill much confidence if future "Schemes" are introduced

We bought ours in December 2012 also. Payment was delivered as promised in December of 2013. And to the poster who said the tax rebates stopped the same time as the rice payments to farmers.........wrong!

[dieter1]

1. reminder: this government is the one making everyone happy

(meaning: criticising the government is a criminal act!) what does this mean for the trustworthy of their official statements ?)

2. money, governments led rain from the sky, in fact does not just come from the sky !

there are sources for the money: f.e.

- money printing (leading to inflation which is kind of expropriation of people with money/ income ...

- raising taxes (what the actual government is actually doing !)

- decrease spending for other things, f. e. health care (notoric undersupply of government owned hospitals)

- raising depts of the state, meaning less money in the future or higher taxes

state grants for buying cars means, someone has to pay for it.Roughly everyone who is not benefiting (not buying first car)is paying for it

(why? Why should/must they do this?)

People will have to use a big part of their income for buying cars for years. What is good about that? Why not build a house, or buy a new PC, smart-phone, refrigerator, meals, healthy food instead?

Why using tax-money to get millions of people being indebted up to the roof? Limiting their ability to decide for what they use their wages for many years?

In general, government subsidies like this, are decreasing the chance of the people to chose what to do with their money, raising the portion of spending, the state is in control of.

Is this a good thing?(why?)

Edited August 15, 2014 by dieter1

[BlackArtemis]

[asdecas]

About as predictable as dawn tomorrow.

[al007]

Seems to me as a simple retired Chartered Accountant,and with a brain, a very sucessful scheme,

The default rate around 1% at present,is better than most major countries, however as time goes forward it will probably increase, but to offset the increase a lot more payments will have been made, and profit taken on them

I believe the leasing and finance companies will be very happy with the buisness from this scheme, from the statistics stated probably better than the normal buisness

Created more car ownership as it set out to do WELL DONE

[AlphMichaels]

Predicted this when first announced. See many young people park their cars from work, take a quick look back whilst holding their 40THB plastic bag dinner as they enter their 3K THB/month room to stay until morning only to repeat drive to a job that pays 12-15KTHB. Trip to Ma's every other month if they have petrol money.

Looks way too much like the west and I feel for them because they've been caught up in the consumer the concept of a great opportunity soon fades with the reality they can't afford something that bites 30-40% off their income each month.

Sad

[jacko45k]

Another one bites the dust, along with ??????

The numbers of defaulters strikes me as rather small for 1.06 million purchasers.

The scheme was very likely to push people into new car purchases when in reality they couldn't afford it... up to the leasing/ financial companies to do their checks correctly.

I can think of a few people who have bought vehicles, or upgraded to new who didn't need to. A lot of Thai wives going about in nice new little cars.....

[chrisrazz]

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It appears that we have been defaulted on , the missus bought a 1.5 in December 2012 with the promise of 100,000 back from the government and we still have nothing

The missus has never previously had a car in her name ?

Nope she passed her test in 2012 and we got a fiesta for her. She went with a bit of an angry mob to Bangkok in April this year and they promised everyone would get their money. Ive read up about it once and apparently it should happen in this tax year. To be honest its not really hurting us financially but I imagine it is hurting some people. It also doesn't instill much confidence if future "Schemes" are introduced

Maybe it would be good to see the default figures of government unpaid rebates.

My son was due his rebate in April this year. On enquiry he was told they had lost the paperwork and new forms were required with the promise it would be rectified within 2 months. He followed up in May, the officer had apparently incorrectly filled out the 2nd lot of forms and he had to go back to the office again, new forms and a further 2 months. None of these problems were proactively advised, the information only proffered under enquiry. Needless to say, we are still waiting. We are dealing with the provincial office, they are now blaming Bangkok. It is a 100km round trip to this office, the boy has been at least 4 times. It smells very much like a delaying tactic to me. Maybe he should start claiming expenses.

I know of another such case, with an even longer delay.

I wonder how quickly the Finance Dept. will reclaim, and to what extent enforce, the reimbursement of rebates paid that are now voided by defaults. - No doubt with astonishing efficiency.

Edited August 16, 2014 by chrisrazz

[DGS1244]

The restriction on which cars were allowed to be purchased, small etc. means that the secondhand market will have a lot of unsellable cars for ages to come. They are not the type people purchase secondhand. Well done government yet again. Doomed to failure from day 1.

[godden]

please no more schemes, Thailand can't afford it.

[Lupatria]

What a stupid scheme.

- Create a large number of sales to people who couldn't afford cars. Now they have lost their cars and their credit histories are ruined.

- Brought forward many sales which makes the manufacturers and sellers' business slump after that.

- Caused a lot of bad loans to banks and finance companies.

- Caused the second hand car market to go into a slump.

- Caused greater pollution and traffic jams.

- Made the roads more dangerous.

Yingluck should face another criminal case for this.

However, the loan sharks like it...

[Johnnie99]

Well seriously, who is really surprised?

All these people with their pay-monthly Mercedes, trying their best to impress.

A sad reflection on Thai culture rather than a failed government initiative.

[elzach]

Why encourage Thais to have more cars? that is the question. Was that measure in force in BKK as well?

This is typical Asian mentality, I've seen it in China as well. Give them the illusion that they "made it", worry about health issues and road carnage later.

[GinBoy2]

To get back to the defaults. The plan itself was a tax rebate, not at all dissimilar to the 'cash for clunkers' programs than ran all over the west to stimulate new car sales.

It was the banks that made the loans, so no matter how much you people desperately want this to be some PT corruption scandal, it's really just a total failure of the banks in their lending practices.

The policy itself may well have been misguided and a waste of money, as I also believe a good deal of the stimulus programs in the US & Europe were, but the defaults lie fairly and squarely on the banks and their poor lending criteria...sub prime mortgage crisis, Greece, Irish, Icelandic, Spanish, British, Portuguese, Cypriot banks,,,shall we go on. Bad loans are hardly unique to Thailand

[Sena Dave]

chrisrazz , I'd imagine as a young man your boy could do with the money as well. There must be loads of people who scraped the money together or got loans and were relying on getting the money back. As mentioned the missus went to the Bangkok office but they just told them all they would all be paid. We're just going to wait , not much else we can do. Its not really the dough its more the felling of getting ripped off

[andy8017]

It's the same old story ,in the UK it's known as keeping up with the "Jones" I.E.-,He's got a new car so we had better get a better one ! Crass stupidity.

[arthurwait]

Weren't there already very different numbers to this before ?