Vehicle finance interest rates

[Chongalulu]

wanting to buy a new car and the interest rates the dealer quotes are written as between about 2.9%- 3.2% depending on length. These aren't however the real rates or what we call APR ( annualised percentage rate) because as the capital sum reduces due to the monthly repayments you are still paying the same amount meaning that the APR ,or real interest rate, is higher than the quoted figure. That much I do know but wondered if there were any financial experts who have worked out the actual APR as I'm not sure how to calculate it. Please,this is not a subject for unqualified opinion,so would appreciate answers only from someone who actually knows.

Any tips regarding best places to obtain finance are welcome however. Also I'm considering a range of vehicles from a 3 litre 4 door pickup to a Isuzu MUX/ Fortuner Toyota or Honda CRV 2.4 (2 wheel drive). I know this is quite a wide choice but all have their disadvantages. Pickup ,agricultural ride but like manual gearbox. MUX type ( is the ride any better due to rear coil springs but with crude live axle?) and a bit large. CRV probably nicest to drive I guess (did use one couple of years ago) and big enough but why the hell don't they offer the diesel version Honda makes?...makes no sense. I prefer manual gearbox and bigger engine size but know that's not possible other than on pickup. .. but can live with automatic as missus would prefer. I notice the Honda is CVT which top gear boys hate. Anyone tried it and have opinion?

Many questions I know so grateful for some answers,especially on finance APR.

[dave_boo]

It's a simple flat rate. You finance the vehicle at X years; the interest rate is Y years and you pay X*Y interest.

To convert that to APR, find out how much your monthly payments will be. Let's go with a 1,000,000 over 2 years @ 3%. That's 60,000 baht interest paid. Added with the loan amount that's 1,060,000 divided up by 24 payments...44,167 baht month.

c=^(rP)/_1-(1+r)-N

r=¹/₁₂ interest rate

P=principal

N=number of payments

44,167=(1/12r*1,000,000)/1-(1+1/12r)^-24

Or 5.66% APR.

I took the liberty of whipping up a spreadsheet where you can adjust the parameters of the flat rate loan and it will spit out an equivalent APR. This of course assumes same monthly payments. But I believe that's what you are asking for.

I'll leave the 'best choice' for others. I'm much more active in the motorcycle forum, but am good with math...so that's why I jumped on this thread.

flat rate to apr calculator.xls

[IMHO]

The Toyota Hilux is currently on a run-out sale (new model in March) with 0% interest, free insurance and a free Galaxy Note 4, if you want to avoid all the math

[mango66]

The Toyota Hilux is currently on a run-out sale (new model in March) with 0% interest, free insurance and a free Galaxy Note 4, if you want to avoid all the math

are you a farmer that you need a lorry ??

[Jeffrey346]

The Toyota Hilux is currently on a run-out sale (new model in March) with 0% interest, free insurance and a free Galaxy Note 4, if you want to avoid all the math

I am just about to buy a Hilux. I thought the Hilux was just redesigned. Where is your info coming from? Doesn't seem to be anything on the net. Need to know if I should wait...

[Tassie Norm]

Thai brother-in-law works at a respectability high level with Toyota - he advised me over Christmas there will be a new hilux this year. Perhaps a bit of research.

[Jeffrey346]

Thai brother-in-law works at a respectability high level with Toyota - he advised me over Christmas there will be a new hilux this year. Perhaps a bit of research.

Thanks for the update. Doesn't seem to be anything on the net though I did read that the Hilux will become an international model this year.

[dotpoom]

It's a simple flat rate. You finance the vehicle at X years; the interest rate is Y years and you pay X*Y interest.

To convert that to APR, find out how much your monthly payments will be. Let's go with a 1,000,000 over 2 years @ 3%. That's 60,000 baht interest paid. Added with the loan amount that's 1,060,000 divided up by 24 payments...44,167 baht month.

c=^(rP)/_1-(1+r)-N

r=¹/₁₂ interest rate

P=principal

N=number of payments

44,167=(1/12r*1,000,000)/1-(1+1/12r)^-24

Or 5.66% APR.

I took the liberty of whipping up a spreadsheet where you can adjust the parameters of the flat rate loan and it will spit out an equivalent APR. This of course assumes same monthly payments. But I believe that's what you are asking for.

I'll leave the 'best choice' for others. I'm much more active in the motorcycle forum, but am good with math...so that's why I jumped on this thread.

flat rate to apr calculator.xls

Could you be more specific please.....just joking, nice one.

[Graemej100]

Hey dave_boo,

That's fantastic.

I'm interested to see that your specialty is bikes. I've been tossing up wether to buy new with cash or over time. I know that you'll probably tell me that cash is always the best, and I know that, but sometimes it's not always the most convenient.

It would seem to me, on the example you gave, that the rates are not really all that expensive - compared to vehicle financing rates in say New Zealand or Aust. There may well be some other things that make financing a worthwhile proposition in things like servicing, insurance etc.

I'd love to hear your thoughts.

The vehicle in question would be a Honda PCX.

Cheers

[IMHO]

The Toyota Hilux is currently on a run-out sale (new model in March) with 0% interest, free insurance and a free Galaxy Note 4, if you want to avoid all the math

are you a farmer that you need a lorry ??

Yo dood, it's the OP that has trucks on his shopping list

[dave_boo]

Hey dave_boo,

That's fantastic.

I'm interested to see that your specialty is bikes. I've been tossing up wether to buy new with cash or over time. I know that you'll probably tell me that cash is always the best, and I know that, but sometimes it's not always the most convenient.

It would seem to me, on the example you gave, that the rates are not really all that expensive - compared to vehicle financing rates in say New Zealand or Aust. There may well be some other things that make financing a worthwhile proposition in things like servicing, insurance etc.

I'd love to hear your thoughts.

The vehicle in question would be a Honda PCX.

Cheers

If you or the missus don't have credit here, buy it on a loan. You can put quite a bit down (say up to 50%) and finance it over 12 - 18 months. Make the payments on time and it's a quick easy way to build up a good score.

If you get financing through the dealer, they are happier as that's where they make most of their profit. Very little profit on the bikes sold cash as you can purchase them just down the road and, excepting places that have cartels who own all the dealerships, competition has depressed the price quite a bit for them.

Does this translate into better service? Can't say as it does. I'd definitely ask around and see which dealership has the best customer care. You can also tell a lot simply by walking in and looking at the models. Don't wear anything fancy, nor too much of a bum tourist look, and see if they are actually interested in selling you the bike by approaching and engaging you. If not, turn heels and go to another dealership.

And when you do find a good dealer...treat them well. A bottle of whiskey for Christmas/Father's Day works wonders when you bring your bike by later.

I carry full coverage on my bikes. Luckily enough I haven't had to collect on it yet, but the peace of mind for a bit more money sure does rub me the right way.

And finally, the PCX is a great bike. The old 125 had a nasty hump in the seat that shoved me forward and left me feeling funny. The new 150 has good power and more importantly it got rid of the hump. Could I also recommend looking at the Forza? It's a 300cc bike that has a bigger presence and wouldn't cost all that much more if financing over time.

[IMHO]

The Toyota Hilux is currently on a run-out sale (new model in March) with 0% interest, free insurance and a free Galaxy Note 4, if you want to avoid all the math

I am just about to buy a Hilux. I thought the Hilux was just redesigned. Where is your info coming from? Doesn't seem to be anything on the net. Need to know if I should wait...

I have posted news on this a couple of months ago. The next-gen Hilux launches in Thailand (before anywhere else) this March.

It will debut with two new engines: a 2.2L and a 2.8L diesel.

I can't reveal sources, so take that with as many grains of salt as you want

There are spy shots online if you want to Google them.

Edited January 27, 2015 by IMHO

[IMHO]

Thai brother-in-law works at a respectability high level with Toyota - he advised me over Christmas there will be a new hilux this year. Perhaps a bit of research.

Thanks for the update. Doesn't seem to be anything on the net though I did read that the Hilux will become an international model this year.

Since when hasn't it been an international model? Or do you mean something different to "it's the same basic car in all markets"?

[questionsreplies]

Which car make offers 0% loan ?

[IMHO]

Which car make offers 0% loan ?

Toyota are doing 0% on the outgoing Hilux

Mitsubishi are doing 0% on the Pajero Sport (new model expected by June)

Ford are doing 0% on the outgoing Fiesta, and the new Fiesta minor change, the Focus, the EcoSport, and the Ranger (minor change soon. March/April?)

Outside of that, expect more 0% or low % deals at the motor show which starts March 25th.

Edited January 27, 2015 by IMHO

[fxe1200]

It's a simple flat rate. You finance the vehicle at X years; the interest rate is Y years and you pay X*Y interest.

To convert that to APR, find out how much your monthly payments will be. Let's go with a 1,000,000 over 2 years @ 3%. That's 60,000 baht interest paid. Added with the loan amount that's 1,060,000 divided up by 24 payments...44,167 baht month.

c=^(rP)/_1-(1+r)-N

r=¹/₁₂ interest rate

P=principal

N=number of payments

44,167=(1/12r*1,000,000)/1-(1+1/12r)^-24

Or 5.66% APR.

I took the liberty of whipping up a spreadsheet where you can adjust the parameters of the flat rate loan and it will spit out an equivalent APR. This of course assumes same monthly payments. But I believe that's what you are asking for.

I'll leave the 'best choice' for others. I'm much more active in the motorcycle forum, but am good with math...so that's why I jumped on this thread.

flat rate to apr calculator.xls

I always use an easy online calculator like : http://vindeep.com/Calculators/EMICalc.aspx ,where one can calculated either the EMI (Equated monthly Installment), or the nominal or effective interest rate, or whatever. The effective interest rate in the case given is 5.81%.

I have made the experience, that motorcycle dealers like Triumph and Ducati charge their interest direct from the complete amount loaned. As these loans are being paid during a certain amount of time towards zero (annuity), the average amount equals roughly 50% of the complete loan amount over the payment period. Therefore the advertised interest rates of those dealers are completely wrong, they are about double as high as advertised.

Am I right Dave_boo???

[dave_boo]

I always use an easy online calculator like : http://vindeep.com/Calculators/EMICalc.aspx ,where one can calculated either the EMI (Equated monthly Installment), or the nominal or effective interest rate, or whatever. The effective interest rate in the case given is 5.81%.

I have made the experience, that motorcycle dealers like Triumph and Ducati charge their interest direct from the complete amount loaned. As these loans are being paid during a certain amount of time towards zero (annuity), the average amount equals roughly 50% of the complete loan amount over the payment period. Therefore the advertised interest rates of those dealers are completely wrong, they are about double as high as advertised.

Am I right Dave_boo???

I have not noted that.

The loans I have taken out have been at a certain rate...say 3%. They take how many periods you'll pay (12,18, 24, 36, etc) and divide that by 12. The result is multiplied by the rate. So a 1 year loan is 3% of the total principal, 1 1/2 year is 4.5%, 2 year is 6%, etc. The total interest is added to the principal and that sum is divided up by the desired intervals (how many months you want to pay).

You can check that. Next time you get a loan, multiply the monthly payment out by the number of months. Subtract the principle. Divide the remainder by the principal. Should be a multiple of the claimed rate.

[yankee99]

Thats about the only good thing about thai loans. You can calculate the total amount of interest in seconds.

[Jeffrey346]

Thai brother-in-law works at a respectability high level with Toyota - he advised me over Christmas there will be a new hilux this year. Perhaps a bit of research.

Thanks for the update. Doesn't seem to be anything on the net though I did read that the Hilux will become an international model this year.

Since when hasn't it been an international model? Or do you mean something different to "it's the same basic car in all markets"?

Same truck in all markets.. What about a CNG option? Any news?

[fxe1200]

I always use an easy online calculator like : http://vindeep.com/Calculators/EMICalc.aspx ,where one can calculated either the EMI (Equated monthly Installment), or the nominal or effective interest rate, or whatever. The effective interest rate in the case given is 5.81%.

I have made the experience, that motorcycle dealers like Triumph and Ducati charge their interest direct from the complete amount loaned. As these loans are being paid during a certain amount of time towards zero (annuity), the average amount equals roughly 50% of the complete loan amount over the payment period. Therefore the advertised interest rates of those dealers are completely wrong, they are about double as high as advertised.

Am I right Dave_boo???

I have not noted that.

The loans I have taken out have been at a certain rate...say 3%. They take how many periods you'll pay (12,18, 24, 36, etc) and divide that by 12. The result is multiplied by the rate. So a 1 year loan is 3% of the total principal, 1 1/2 year is 4.5%, 2 year is 6%, etc. The total interest is added to the principal and that sum is divided up by the desired intervals (how many months you want to pay).

You can check that. Next time you get a loan, multiply the monthly payment out by the number of months. Subtract the principle. Divide the remainder by the principal. Should be a multiple of the claimed rate.

As I said, I am only disturbed by the fact that the rate of x%, which is being offered by dealers, is being called interest. The unaware customer will think: Oh, that is just 0.2% higher than my fixed account at the BKBK. And he is wrong. Actually there should be a law, just like in other countries, to publish the effective interest rate for all loans offered.

[bkkjames]

Which car make offers 0% loan ?

do you have a narrowed down list of preferred vehicles? Shall I drive your new car for you as well?

[dave_boo]

As I said, I am only disturbed by the fact that the rate of x%, which is being offered by dealers, is being called interest. The unaware customer will think: Oh, that is just 0.2% higher than my fixed account at the BKBK. And he is wrong. Actually there should be a law, just like in other countries, to publish the effective interest rate for all loans offered.

Hmm...if you have a fixed account the interest is paid yearly isn't it? So over the course of 2 years, you'll get 5.7% (got to get that compound interest) right? Just like you have to pay a total 6% on that 3% per annum loan.

[fxe1200]

As I said, I am only disturbed by the fact that the rate of x%, which is being offered by dealers, is being called interest. The unaware customer will think: Oh, that is just 0.2% higher than my fixed account at the BKBK. And he is wrong. Actually there should be a law, just like in other countries, to publish the effective interest rate for all loans offered.

Hmm...if you have a fixed account the interest is paid yearly isn't it? So over the course of 2 years, you'll get 5.7% (got to get that compound interest) right? Just like you have to pay a total 6% on that 3% per annum loan.

My earning, not the interest rate, would be 5,6784% over the period of 2 years, if I would leave the interest on my bank account. Interest though is always calculated annually!

The amount of money in the bank is a fixed amount (in my case for 11month only), which is sitting there from the first to the last day and not being altered, whilst a loan changes the amount to be paid back with every payment (annuity!) done. Besides there are cases, where they will try to sell you a credit loss insurance on the quiet. But this is a different story. Are you now satisfied?

[dave_boo]

My earning, not the interest rate, would be 5,6784% over the period of 2 years, if I would leave the interest on my bank account. Interest though is always calculated annually!

The amount of money in the bank is a fixed amount (in my case for 11month only), which is sitting there from the first to the last day and not being altered, whilst a loan changes the amount to be paid back with every payment (annuity!) done. Besides there are cases, where they will try to sell you a credit loss insurance on the quiet. But this is a different story. Are you now satisfied?

Satisfied?

It doesn't bother me either way if you like or dislike the way Thai loans are offered.

The simplified way it is done here is just the way banks work, with one exception. You earn the 5.6784% on the compounded interest. The loan company earns 6% with NO compounded interest. It's a simple way to understand how much you have to pay (APR means you are paying interest mostly in the beginning and get about 75% of the way through the payments before you actually get around to the point where you're paying off more principal than interest).

The fact that some people don't want to understand it or get their knickers in a knot over it is inconsequential. A poster asked how to convert this simple interest into something that he apparently has experience with. I did that and provided a tool so that he could figure out other ones. As I have completed that task, and it looks like this thread is destined to descend into ennui, I shall bid my adieu.

[fxe1200]

My earning, not the interest rate, would be 5,6784% over the period of 2 years, if I would leave the interest on my bank account. Interest though is always calculated annually!

The amount of money in the bank is a fixed amount (in my case for 11month only), which is sitting there from the first to the last day and not being altered, whilst a loan changes the amount to be paid back with every payment (annuity!) done. Besides there are cases, where they will try to sell you a credit loss insurance on the quiet. But this is a different story. Are you now satisfied?

Satisfied?

It doesn't bother me either way if you like or dislike the way Thai loans are offered.

The simplified way it is done here is just the way banks work, with one exception. You earn the 5.6784% on the compounded interest. The loan company earns 6% with NO compounded interest. It's a simple way to understand how much you have to pay (APR means you are paying interest mostly in the beginning and get about 75% of the way through the payments before you actually get around to the point where you're paying off more principal than interest).

The fact that some people don't want to understand it or get their knickers in a knot over it is inconsequential. A poster asked how to convert this simple interest into something that he apparently has experience with. I did that and provided a tool so that he could figure out other ones. As I have completed that task, and it looks like this thread is destined to descend into ennui, I shall bid my adieu.

Granted.

[IMHO]

Thai brother-in-law works at a respectability high level with Toyota - he advised me over Christmas there will be a new hilux this year. Perhaps a bit of research.

Thanks for the update. Doesn't seem to be anything on the net though I did read that the Hilux will become an international model this year.

Since when hasn't it been an international model? Or do you mean something different to "it's the same basic car in all markets"?

Same truck in all markets.. What about a CNG option? Any news?

Only old news I'm afraid: http://www.toyota.co.th/hiluxvigochamp/vigocng/

[ChiangmaiRob]

Thai brother-in-law works at a respectability high level with Toyota - he advised me over Christmas there will be a new hilux this year. Perhaps a bit of research.

Thanks for the update. Doesn't seem to be anything on the net though I did read that the Hilux will become an international model this year.

Hilux badly need an updated model as Ford are kicking Toyotas ass since the new Ranger came out. I bought a 2.2 Hi-Rider just over a year ago, it's done 32,000km already and never had a problem. Another year and I'll trade it for a new Wildtrak, nicer looking truck and much higher spec. I had a new Civic for 3 years before the Ranger, and although I liked it, I much prefer the Ranger, much more practical and with all the idiots on the road, I feel a lot safer sitting higher up with a good strong chassis around me. As for the "agricultural" references to trucks .... well each to his own, but I like the truck, It's just a 4 door saloon with a very big boot, currently covered with a Carryboy GMX sports cover. To answer the OP's other question ... well I've no idea about interest rates, API and loan repayments as I'm a cash up front kinda guy, for everything.

[IMHO]

Hilux badly need an updated model as Ford are kicking Toyotas ass since the new Ranger came out.

Not sure by which metric you base that on, but it's not sales

[ChiangmaiRob]

Hilux badly need an updated model as Ford are kicking Toyotas ass since the new Ranger came out.

Not sure by which metric you base that on, but it's not sales

Toyota had the biggest chunk of the truck market in Thailand for a long time, and still do, but that sales margin had been cut quite significantly by Ford with their new Ranger. The Vigo is still a great reliable workhorse but it's design is old and tired looking and they need a complete new facelift to keep that top spot. I've driven most of the trucks, and Ford, Toyota, Izuzu and Mitsubishi and they are all pretty much on par with each other performance, specs, cost and reliability wise, but IMHO, the Ranger is the best looking truck and if Toyota don't come up with something new and sexy, even the diehard Toyota drivers will be thinking twice before buying another Vigo.

[MYKTHEMIN]

Ford will never compete here with Toyota, Thai mind set will never change, second hand prices for Toyota are far higher than Ford and always will be, parts prices for Ford are crazy high, fords look good but depreciate like a brick falling through water.