Financing the upcoming Ducati Scrambler

[Kf6vci]

Saw nothing yet on the Ducati website. What kind of terms can one get at the main dealer / from a bank?

Thai borrower with good credit would be my guarantor.

Thanks,

Chris

[Hili]

theres NO "good" financing in Thailand.....

Official rates from Ducati

[BoneRanger]

theres NO "good" financing in Thailand.....

Official rates from Ducati

scrambler_pricelist.jpg

Total interest on the Scrambler Full Throttle model with 48 month schedule? 67,850Bt.

[nikster]

5% isn't great, but not terrible either.

I'm not sure the Thai guarantor will work - it might. Would def. work if in the Thai person's name, e.g. they buy it.... generally as a foreigner they want to see you have a work permit and job.

[eisfeld]

People with less money pay more. Always love this fact.

BTW if you can't get financing here, maybe you could borrow money from a bank in your home country? But in general I'd say stay clear from financing for something non-essential or even luxurious. And definitely don't borrow money from something other than a bank.

[yankee99]

5% isn't great, but not terrible either.

I'm not sure the Thai guarantor will work - it might. Would def. work if in the Thai person's name, e.g. they buy it.... generally as a foreigner they want to see you have a work permit and job.

Its terrible! Remember this is a flat calculation which is the equivalent of 10% calculated on principal owed. Also paying off in advance does not forgive interest due.

[Kf6vci]

theres NO "good" financing in Thailand.....

Official rates from Ducati

scrambler_pricelist.jpg

Thank you so much for this! (I hadn't found it on their website...)

4.99% sounds pretty reasonable to me. Was expecting a higher rate!

[Sure]

It might be 4.99% per year

[BoneRanger]

5% isn't great, but not terrible either.

I'm not sure the Thai guarantor will work - it might. Would def. work if in the Thai person's name, e.g. they buy it.... generally as a foreigner they want to see you have a work permit and job.

Its terrible! Remember this is a flat calculation which is the equivalent of 10% calculated on principal owed. Also paying off in advance does not forgive interest due.

Yep. No early pay off on the loan.

I guess that is why you see some second hand bikes advertised for more than new!

These guys want to recover the interest on the loan + all the needless accessories they bought.

[Kf6vci]

People with less money pay more. Always love this fact.

BTW if you can't get financing here, maybe you could borrow money from a bank in your home country? But in general I'd say stay clear from financing for something non-essential or even luxurious. And definitely don't borrow money from something other than a bank.

My credit card would cost me about 11%..., Maybe the bike will be in my wife's name? Would I need some document stating I'm allowed to ride it?

[DILLIGAD]

No but you could never ride it alone into another country if it's in her name.

[Shurup]

In civilized countries the interest is calculated monthly on the amount owed at the time. Here it's not like that, you pay the same interest each month until the loan is paid off and you end up paying a lot more than you would if you financed in your home country. You may be better of paying with your 11% interest CC. There are many online finance calculators, google one and see how much extra would you pay by the end of term in your home country. Then compare to the total you'd pay here with this financing. With CC you also have an option to pay it off at any time without any penalty. Think about it.

[dave_boo]

In civilized countries the interest is calculated monthly on the amount owed at the time. Here it's not like that, you pay the same interest each month until the loan is paid off and you end up paying a lot more than you would if you financed in your home country. You may be better of paying with your 11% interest CC. There are many online finance calculators, google one and see how much extra would you pay by the end of term in your home country. Then compare to the total you'd pay here with this financing. With CC you also have an option to pay it off at any time without any penalty. Think about it.

I could be wrong, but my numbers work out this way using the 11% interest. I of course made sure that I used the 48 month payment plan from the Ducati graphic above.

Down - 0% (using your credit card means 0 down as it will pay for all of it from the get go)

Total Principle - 369,900 baht

Interest rate - 11%

Number of Terms - 48

Total Interest Due - 88,992.42 baht

Payments per month - 9,560.26 baht

Almost a full 30,000 baht more dear than using the 4.99% flat rate offered by Ducati (59,088 baht of interest for the cheapest model). If your card has a 7.5% rate it is equal though.

That doesn't invalidate what you pointed out about being able to pay it off early though! One could potentially save quite a bit of money doing that.

[eisfeld]

With the CC you can decide the upfront and monthly payments (both amount and duration) yourself. That has to be factored in and if these numbers are high enough, then the 11% CC will beat the 5% Ducati financing plan.

[Shurup]

I could be wrong, but my numbers work out this way using the 11% interest. I of course made sure that I used the 48 month payment plan from the Ducati graphic above.

Down - 0% (using your credit card means 0 down as it will pay for all of it from the get go)

Total Principle - 369,900 baht

Interest rate - 11%

Number of Terms - 48

Total Interest Due - 88,992.42 baht

Payments per month - 9,560.26 baht

Almost a full 30,000 baht more dear than using the 4.99% flat rate offered by Ducati (59,088 baht of interest for the cheapest model). If your card has a 7.5% rate it is equal though.

That doesn't invalidate what you pointed out about being able to pay it off early though! One could potentially save quite a bit of money doing that.

I didn't do any calculations and that's why I said may be. So I'm not arguing. But yes there's always an option to make larger payments and to pay it off sooner.

[dave_boo]

With the CC you can decide the upfront and monthly payments (both amount and duration) yourself. That has to be factored in and if these numbers are high enough, then the 11% CC will beat the 5% Ducati financing plan.

Doing 32 months of payments at 11% interest rate takes one down to where the 5% flat rate, over 48 months, is for total amount paid for interest.

**edit**

It also takes you from the 7,396 thb per month at 5% flat rate to 13,390.

Edited January 8, 2015 by dave_boo

[Kf6vci]

In civilized countries the interest is calculated monthly on the amount owed at the time. Here it's not like that, you pay the same interest each month until the loan is paid off and you end up paying a lot more than you would if you financed in your home country. You may be better of paying with your 11% interest CC. There are many online finance calculators, google one and see how much extra would you pay by the end of term in your home country. Then compare to the total you'd pay here with this financing. With CC you also have an option to pay it off at any time without any penalty. Think about it.

I like the flexibility of deciding how much to repay. Make an effort early on => reap huge benefits and pay off the loan months earlier. This kind of thing. A programmed business calculator shows the results...

How come such a weird interest rate is even legal? Any idea who okayed this bill and who lobbied for it?

Thanks for really helpful and informative posts. I had no idea!

[nikster]

Lots of Thais borrow from loan sharks. Instant approval. The only downside is, it's 5% or 10% per month... then after 6 months you pay back the entire amount, having paid a total of 30% or 60% of interest...

Ducati is definitely a better choice

[BoneRanger]

Lots of Thais borrow from loan sharks. Instant approval. The only downside is, it's 5% or 10% per month... then after 6 months you pay back the entire amount, having paid a total of 30% or 60% of interest...

Ducati is definitely a better choice

At least Ducati won't threaten to turn you into fish food.

[dave_boo]

In civilized countries the interest is calculated monthly on the amount owed at the time. Here it's not like that, you pay the same interest each month until the loan is paid off and you end up paying a lot more than you would if you financed in your home country. You may be better of paying with your 11% interest CC. There are many online finance calculators, google one and see how much extra would you pay by the end of term in your home country. Then compare to the total you'd pay here with this financing. With CC you also have an option to pay it off at any time without any penalty. Think about it.

I like the flexibility of deciding how much to repay. Make an effort early on => reap huge benefits and pay off the loan months earlier. This kind of thing. A programmed business calculator shows the results...

How come such a weird interest rate is even legal? Any idea who okayed this bill and who lobbied for it?

Thanks for really helpful and informative posts. I had no idea!

Actually to me it makes perfect sense. It's the exact opposite as you would do if you deposited money in a bank to live off the interest. Let's say that you live on 30,000 baht a month. You have 7,200,000 baht that you deposit in a bank account. Each year the bank pays out 360,000 baht interest. Voila, you skim off the interest and leave the initial deposit in the bank. Next year it does the same. That is generally accepted isn't it?

Well, the loan companies are using YOU as the bank. They 'deposit' the loan amount as credit against you and then you pay pay their money + 5% back. Of course it is paid back a little each month, but the idea is the same. And the same as if you leave your money in the bank for 48 months, you expect 5% x 4 (1,440,000 baht) paid to you, the loan company should expect their money to work the same.

My big beef is that, in 'civilised countries', you pay 11%, per period (using that credit card example), for the remaining principle. That means for the first 6 months of a 48 month payment plan your monthly payments are about 50% interest! It's not until the 38th month that the percentage of your monthly payment that is interest drops to actually 11%. Contrast that with the way it is done here and each and every month you are paying 1/48 of the principal + 0.42%.

Let's imagine that you have a 80,000 baht monthly income. You want to spend 25% of that on monthly payments. Meaning that you can afford approximately 20,000 baht month payments. Using that 11% interest rate you could reckon that you'd pay it off in 21 months. You would pay 19,444 baht each month and total amount paid for interest would be 38,432 baht. Had you let it ride for 48 months, you'd only have to pay 9,560 baht monthly and your total payment for interest would have been 88,992 baht. So you save 57%. Seems a lot.

However, paying for it through Ducati, going from the 48 months of payments (where you pay 7,396 baht per month and 59,066 baht total interest) down to 24 months (13,561 per month and a total of 29,533 baht total interest) or 50%. Not only that, but you have a lot more disposable income each month. Could invest it, put it in savings account, whatever.

[eisfeld]

With the 11% CC it will only make sense with a sizeable up front cash payment and a good monthly one. For example if you just have to borrow 200k THB with the CC and can do 20k each month, you'll be done after 11 months with a total interest of about 12k THB paid. You see the numbers can change very quickly based on the parameters.

Putting money into a savings account rather than paying off debt is a bad idea. The debt interest rate will always be higher than your savings account. Also with the debt it's starting at a high amount working down instead the other way. So don't do this if you have the choice.