Refused Credit by Honda Car Leasing

[Ace of Pop]

[stevenl]

Take into account that the 1% will work out to more than 2% according to western norms.

[JAS21]

On Friday, March 10, 2017 at 8:08 PM, Boatman37210 said:

Livina  is on the Nissan website, but we called our dealer and the manager said they no longer make it.  They're pushing the Note which I do not care for.  One thing I can't understand, if the dealer is being straight, is why would a big company like Nissan continue to show the Livina on their website if they no longer will continue to make it.  Is it really about being slow to update their website?

 

We test drove a Sienta, but at least to me it is over priced for what you get.  You can get a Mobilio or Avanza or the Ertega for 100K less.  That's comparing the top models for each. 

 

One of the problems we ran into during our search was models appearing on a company's website only to be told by a dealer that they do not make it anymore.  We were interested in the Avanza.  Told by one dealer they quit making it and was being replaced by the Sienta..  Another dealer said you can get them, but you have to order.  Unable to find any on display.  We are trying to buy a Honda Mobilio.  Was told by one dealer they quit making them.  We had to go to Bangkok to find one.  It seems the 2016 they have quit making, but according to Honda's website the 2017 will come mid year.  Dealers did not tell us that.

 

The thing is we got so many different answers we could not tell what was true and what was not.  Tried calling the company direct and line always stayed busy. 

 

Supposedly we now have financing.  According to the dealer Honda owns other financing companies and they have agreed to finance at the same terms as Honda Leasing was offering.  Interest rate is only 1% .  Honda has also agreed to pay 2,500 baht each month toward our payment for the first 12 months.  Not sure how that works. 

 

While we could pay cash, it would put a pretty good dent in our savings.  The 1% was hard to pass up.  This whole process has made me leery.  I am concerned that when I sit down with the papers that in some form or fashion they will not be as how I understood the terms.   

 

 

 

 

You might get a suprise ...

Just add the total payments together with the deposit and then take away the list price of the car.

 

And see if you can work out where the 1% comes in. Credit to you if you can.

 

You can of course subtract any bank interest that you will receive from investing the cash.

 

Could be that you are charged each year  1%  on the amount that you borrowed ... hope not. It should be on what you owe.

 

Often credit deals at the Motor Show can be less than at other times of the year.

 

The dealer gets 'a stack of cash' when someone buys on credit ....so he can afford to return some to you.

[mortenaa]

On 3/10/2017 at 0:23 PM, Don Mega said:

So basically a loan using the car as collateral, luckily no balloon payment like a lease typically does.

 

Both BMW and Mercedes often use Balloon payments here.

[Don Mega]

42 minutes ago, mortenaa said:

 

Both BMW and Mercedes often use Balloon payments here.

Yes, they are lease's.

[sometimewoodworker]

When you get an "interest" rate on a loan in Thailand don't expect that you can relate it to a western interest rate.

 

In the rest of the world the total amount of interest you pay will drop if you pay off the loan early.

 

In Thailand it should really be called a loan arrangement fee of x% of the loan amount  with a 0% interest loan attached, as there is no change to the total amount you pay however soon you pay off the loan.

 

 

This doesn't make the Thai system bad just different and it often catches non Thai's by surprise. The benefit is no early repayment fees, the downside is no early repayment saving 

[Boatman37210]

Final update:

 

Pulled the plug on the Honda Mobilio. Nothing against the car. If I could have purchased from a local dealer, gotten the 5 seat S model, and had been able to get a decent test drive, most likely I would have bought the Mobilio. The only test drive they allowed was around the back parking lot.

 

Ended up getting a Suzuki Ertiga. Don't think it was a bad decision, but came away thinking maybe it was not the best decision. Being able to give the Mobilio a decent test drive would have determine which was best for me I think.

 

Ertiga is a good car. Good value for the money. Most reviews say the Mobilio is the better car, but half the reviews say that the price difference is too great and give the edge to Ertiga. The other half said the Mobilio is worth the extra money and gave the edge to the Mobilio. Right now there are deals for the Mobilio that get that price difference down to where I think the edge would go to Mobilio.

 

Supposedly though they have stopped making the Mobilio. That was all anyone was saying. It does appear on Honda's web site for 2017, so it may be what they meant was they stopped making the 2016 model. They did not elaborate, so I took it they stopped all together. I read an article where they have stopped making it in India because of poor sales. The Ertica is popular there and is a direct competitor of the Mobilio. It was just too hard for the Mobilio to compete price wise with the Ertiga.

 

If anyone has driven both, I would be interested in knowing which car is best as far as ride and handling.

 

Thanks for all your input.

 

 

[harrry]

A suggestion regarding test drives.  Check which of the hire companies have the car you want and hire it for a day.  this gives a proper chance to see if it suits your needs.

[Mattd]

On 12/03/2017 at 8:04 AM, JAS21 said:

Could be that you are charged each year  1%  on the amount that you borrowed ... hope not. It should be on what you owe.

That is exactly how the financing of cars in Thailand works, the rate looks low and attractive, however it is a percentage of the total amount over the number of years the finance is taken for.

So for example, if you were to pay a deposit of 50% of a 1 Million Baht car and the balance of 500,000 THB was taken on finance at a typical rate of 2% over 36 months, then the interest paid per year would be 10,000 THB with total interest charges of 30,000 THB over the loan period.

 

On 14/03/2017 at 8:28 AM, sometimewoodworker said:

The benefit is no early repayment fees, the downside is no early repayment saving 

This depends on the company who is providing the loan, for instance BMW Finance will discount 50% of the remaining interest if the loan is paid off early, worth checking with the loan company prior to deciding.

[NanLaew]

On 3/9/2017 at 10:22 AM, catman20 said:

not so im retired, i got fiance from Honda 

So, did getting a potential marriage partner from the dealership earn you any breaks on the financing?

[catman20]

On 3/31/2017 at 1:11 PM, NanLaew said:

So, did getting a potential marriage partner from the dealership earn you any breaks on the financing?

not at all. I obviously looked like a good risk to them no like most here. and if you look at some of my other post here your see that i think marriage is a mugs game.

[Jamestaylor]

On 3/9/2017 at 4:57 PM, bsdthai said:

There are high interest no check type loaners out there.

Know one in bkk. Youll find if you put down 50% or more it wouldnt be an issue and would try another dealer if they are playing the typical honda smug game. Years ago it was easy for farang. Not so nowadays. Really its wiser to save. Hard to do because the idea of a new cars is good but give it a month and youll wish you waited anyway

Do elaborate on this. No check meaning no salary or credentials needed? I'd pay high rates to get past not having a salary.

[bazza73]

On 3/10/2017 at 8:08 PM, Boatman37210 said:

 

While we could pay cash, it would put a pretty good dent in our savings.  The 1% was hard to pass up.  This whole process has made me leery.  I am concerned that when I sit down with the papers that in some form or fashion they will not be as how I understood the terms.   

 

 

 

 

If you are uncomfortable with it, or don't understand it, then don't do it. Plenty of falangs have got burnt with contracts in Thailand that they did not understand.

The sensible thing financially to do with the old Nissan is run it into the ground. If you leave good kilometres on it, you are throwing money away for the sake of impressing your friends and neighbors.

[canthai55]

2 hours ago, bazza73 said:

The sensible thing financially to do with the old Nissan is run it into the ground. If you leave good kilometres on it, you are throwing money away for the sake of impressing your friends and neighbors.

You sound like my wife - in a good way. Told here we are going to BKK to buy Teana. She said "Why ? Our car runs good, we get in, drive, finished. Replied that the Teana is nicer. She said having the money better" Altho she likes it now !

[balo]

If your wife has no income , no wonder they turned down the credit.   If you still managed to borrow money without a work permit in Thailand consider yourself lucky . 

 

 

 

 

[Boatman37210]

On ‎4‎/‎5‎/‎2017 at 3:07 PM, balo said:

If your wife has no income , no wonder they turned down the credit.   If you still managed to borrow money without a work permit in Thailand consider yourself lucky . 

 

 

 

 

Wife still does not have income, but we were able to finance the Suzuki.  Interest rate was higher than what Honda was offering, but we checked with a couple of other Suzuki dealers and the rate was in line with what they were charging.  We had to go to the embassy to get an income letter which was a pain since we live 2 hours away and it cost 1,800 baht.  We figured we would have to do that with any company.  But then the bank wanted us to go to immigration and have my wife report me as living in her house.  They wanted a stamped receipt showing she had done the report.  She had already done the report previous year plus my drivers license has my address and I get mail.  After having gone through what we did with Honda, we were fed up and told them we were not going to immigration.  They backed off and apologized saying that the lady processing the paper work was new.  She had made a mistake requiring the immigration paper.

 

I was a credit manager for a distributor of Detroit Diesel engines and Allison transmissions for 10 years.  None of what happened makes any sense to me from a business standpoint.   There have been several things in Thailand that I did not understand the why, but given time the why was discovered and it made sense.  There is probably a good reason why finance companies in Thailand are turning down falang business.  I just do not know what it is unless losses are just too great.  Managed right I would think it could be profitable.

 

[Boatman37210]

On ‎4‎/‎5‎/‎2017 at 5:59 AM, bazza73 said:

If you are uncomfortable with it, or don't understand it, then don't do it. Plenty of falangs have got burnt with contracts in Thailand that they did not understand.

You are exactly right. 

 

I should have at least taken pics or scanned each document at the time of signing.  I am going to request copies of what we signed, but then how do I know if they send me everything.   Wife and I have decided that if there is another new car in our future, we are going to save and pay cash as was suggested in an earlier comment.