Questions on buying a car on finance

[DineshR]

Hi all,

 

I've read pretty much all the posts on buying a car on finance but wanted some clarification on the below items. Would appreciate your experience this area.

 

1. I've been to a few dealers here(Korat) and without exception, they quote a monthly payment which is based on calculating interest on the full loan amount for the full loan period and then calculating a monthly payment based on the total (loan amount + total period interest) divided by the total period months. This is different to how they calculate car loan payment in the US as they reduce the principal each month to account for your monthly payments. Hence in the US, for the same loan amount and term, the monthly payment is about 5% lower than it is with the Thai car dealer method. Question is - how do banks calculate monthly payments ? (Haven't visited a bank yet but that's on the to-do list for next week)

 

2. Anyone have experience with getting a car loan from a bank as opposed to a dealer ? Which is a farang loan friendly bank ?

 

3. On the car monthly payments, do they add any loan insurance amount or any other amount ? I've calculated what my monthly payments will be based on the interest rate and the loan amount but don't want to be surprised later with other things they tack on to the monthly payment.

 

Thanks in advance for your inputs.

[naboo]

You don't state if buying new or second hand. There are additional fees buying second hand, including 7% VAT. 

 

Interest is calculated as you state by all providers of car loans, due to a law on charging interest on interest I think.

 

In my experience, Tisco are very Non-Thai friendly.

[DineshR]

Thanks naboo ! I am buying a new car.

[naboo]

No loan insurance then, just the loan plus interest.

 

At the beginning, there were no fees that I paid (maybe Ford paid fees for me).

 

At the end, I had a fee of a few thousand Baht to transfer the name to me, an additional fee charged if you have moved house. They offered to pay my annual road tax, their admin fee was about 500B a time, I paid it myself with the copy of the book they gave me.

[DineshR]

Thanks a ton naboo. Much appreciated. They said they will pay the first years car insurance for me - grade 1 insurance but we haven't discussed details yet so I don't know about the road tax.

[Henryford]

The Thais seem to quote interest here as a "flat" rate as opposed to the APR that is quoted in most western countries. So a rate of say 3% which might not seem too bad is in effect 6% APR.

[Kwasaki]

23 hours ago, naboo said:

You don't state if buying new or second hand. There are additional fees buying second hand, including 7% VAT. 

 

We sold privately don't think VAT was involved.

VAT only applies to company car dealers l believe. 

[DineshR]

I agree Henryford ... if you are poor in this country, you get it coming and going !

[naboo]

18 hours ago, Kwasaki said:

 

We sold privately don't think VAT was involved.

VAT only applies to company car dealers l believe. 

 

On the loan?

 

I was looking at buying a 2nd hand car on finance and there was 7℅ VAT on the quote from Tanachart Bank. I was looking to buy from a dealer though.

[DineshR]

Just thought I would update everyone on this. I finally applied for the loan through the Ford dealer and it turned out that the financing company that Ford here (Korat) uses is Tisco. Given what I had heard about Tisco being farang unfriendly, I was quite nervous to say the least. However, I was pleasantly surprised that the agent was quite friendly and the fact that I did not have a yellow tabian baan or a permanent resident visa nor a work permit did not kill the discussion. She was willing to work with me and asked questions about the source of my funds etc. I think the fact that I was putting in a large downpayment (48%) was enough for her to consider my application. It should be said that the loan is in my wife's name(who has no income nor any source of funds and who is solely dependent on me). I was asked to provide a copy of my passport/visa, copy of my last tax return, copies of the tabian baan, and a copy of my wife's bank passbook to show regular deposits from me. 

 

As for the loan itself, I did get 1.96% on the loan for 48 months (calculated the Thai way) but interestingly, she told me that I had to take out loan insurance which was based on the loan amount and on my wife's age. The insurance worked out to be about 500 baht per month. I was somewhat skeptical about this and was wondering if this was just a ploy to get in more interest on the loan in the guise of this 'insurance' but since I was quite happy I was getting the loan and the fact that if I had gotten the loan in the US (to buy the car outright here) it would have cost me 4% in interest. On balance, I think this was still a better deal than getting the money from the US - so I agreed to this 'insurance'. The deal is not in the bag as yet - she has to send the paperwork to Bangkok and if approved, I would know by the end of this week. When I get the final paperwork , I can see how they have called out this insurance in the loan papers.

 

As an aside, Ford is paying my first year's car insurance as well as road tax.

[stubuzz]

The vat and interest on a 2nd hand car over a 4 year period adds about 25% to the total cost.

[GARYZX6R]

Dinesh Iam with Tisco and had the same thing,an insurance policy in girlfriends name before we could get the loan.

[naboo]

Dinesh, if you got the info from me re. Tisco being Farang unfriendly, its because I wrote it badly. I think they're very farang friendly, but perhaps my phrase "Tisco are very Non-Thai friendly" was badly put. They are friendly to non-Thais.

 

Loan insurance, I paid none with them, through Ford. This was 5 years ago though. I also had the loan, and car, in my name. I do have a work permit which makes this easier.

[Mrjlh]

Loan insurance is standard even for Thais.  We've bought three cars over the last 10 years and the loan insurance was always added on after the main loan amount. It varied to the total amount of the loan.  Some banks will not tell you this so we avoided them. Also there is no savings if you pay the loan off early. Just the way they do business here.

[DineshR]

Thank you all. Just for clarification - this is for a new car.

 

Reassuring to know that I wasn't stiffed ... looks like standard practice when the loan is in the name of a person who is not the one paying for it ... I think with you Naboo - since you had the loan in your name and you were the one paying off the loan AND you had a work permit, which is why they did not have the loan insurance. I understand your comment on Tisco being farang friendly now. Thanks.

[canthai55]

good idea - loan insurance. Who knows what could happen ?  At least you - or your significant other - has the payments covered if something untoward happens.

[DineshR]

I do have to check on this loan insurance thing ...i.e. exactly what is covered with this insurance and will report back once I understand it better. Just a further update. After all the documentation was sent a couple of days ago, TISCO called and wanted to get a statement of my bank account to see the international transfers into my account. Going to do that tomorrow and will let you all know what happens.

[DGS1244]

It was mentioned that the loan was in the wife's name, technically unless you have a work permit a farang cannot obtain credit to purchase a new car, and normally no way for a second hand one. Some 'agents' seemed to get around this problem but reputable dealers can have a problem unless you have a third party name and guarantee.

[ToddinChonburi]

You can not pay off car loan early.  48 months is 48 months .  can not add extra to principle. And yes a farang can get a loan for a new vehicle.  I just did .

[prakhonchai nick]

Krungsri were extremely helpful when I financed my car. Not only did they come to my house within 3 hours of asking via email, but they also phoned the dealer, and arranged for a test drive car to come to my home...65kms away within 2 hours. Loan approved within 1 day.

[DineshR]

A quick update. Went to the bank today to get a bank statement for my account and was told that it would take approx 3-5 working days to get it since they had to request it from Bangkok. And it would cost 200 baht. I went ahead and ordered it but then I went back home, logged in to my bank account and printed out 6 months of transactions (the most it would allow me to do). I then took this print out to Tisco and they said it would suffice. Later on in the afternoon, they called and said the loan was approved. Woo-hoo ! Done. Thank you all for your help. Picking up the car on the 28th.

[Mansell]

Interested in what you bought Dinesh.

[DineshR]

@Mansell ... I bought a Ford Everest 2.2L Titanium +.

 

I did forget to mention one other thing in my earlier post. I did check on this loan insurance. It covers the one in whose name the loan is in (in my case, my wife) and should my wife die during the term of the loan, the insurance pays off the remaining loan amount. 

[willr]

You can pay off a car loan early,and get a discount on the pay out rate.i have done that with 2 cars with 2 different companies. 

[rendos]

You can pay off a car loan early,and get a discount on the pay out rate.i have done that with 2 cars with 2 different companies. 

Are any of those 2 banks by any chance krung Sri? I plan to pay oof my second car from private Thai owner earlier than they agreed to.

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[BEVUP]

Hello all 

First a reply to early payment - I think you will probably have to pay half the remaining due amount 

? what is the current rate of Int in real terms not Thai - may looking at Toyo or Honda as I might do a 200,000 over 2yr deal if possible ( need to work on those figures just to keep it under HP )

? Are there any (haven't done full research yet ) just plain reasonably sized diesel only sedans concerning above or maybe others (not into Hy Breds ) as i would think of higher fuel costs ? & maintenance 

* Have a 2009 Vigo smart cab 2 x D / 5 sp/ man - 200,000 km / Mech A1(allways serv) / Body 8/10 - Would like to trade in, any thoughts on value (I might say 250 - 300,000 )

Thanks all if can help 

 

 

[BEVUP]

On 11/18/2016 at 9:32 PM, DineshR said:

@Mansell ... I bought a Ford Everest 2.2L Titanium +.

 

I did forget to mention one other thing in my earlier post. I did check on this loan insurance. It covers the one in whose name the loan is in (in my case, my wife) and should my wife die during the term of the loan, the insurance pays off the remaining loan amount. 

I like this Dinesh as i'm about to enter into 50 % of the finance under my name 

So this would then be classed as a Falang loan & i was wandering if you came across any points that if one got injured whilst working (& out of work for a period) or ended up being unemployed would the Loan Insurance cover

Thanks

[DineshR]

I like this Dinesh as i'm about to enter into 50 % of the finance under my name 
So this would then be classed as a Falang loan & i was wandering if you came across any points that if one got injured whilst working (& out of work for a period) or ended up being unemployed would the Loan Insurance cover
Thanks

Sorry I don't know the answer to your question. I think it would depend on the type of loan insurance you got - death and disability... I will go check the policy I got and revert back to you ...


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[DDbkh]

An important to thing to consider if you are buying a used car is that Krungsri offer a warranty included in the loan. This warranty is backed by a major international insurance company.

[BEVUP]

1 hour ago, DineshR said:

Sorry I don't know the answer to your question. I think it would depend on the type of loan insurance you got - death and disability... I will go check the policy I got and revert back to you ...


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Well just got back from Toyota

* The actual 2.5 % works out to be 5% on my Homeland banking computer

* It's 500 bht p/mt for loan Insurance - cheaper if you scrap the life insurance bit

* if paid out early you get 50% discount on remaining interest

Got the top model Sienta

* 1st class ins

* Window tint

* Gov Rego / plates - There is a Gov tax that I had to pay 2800 bht

* Floor mats all round

* Front camera - in replacement to no window trims

* Free wax every 3 mth for a yr

* Chrome handles

* Free labour on services up to 50,000km

* Full tank o fuel

- He would not give the air pump 

+ Had to give 3000 bht deposit on Red plates