Do you want to buy something and pay by credit?

[thalenoi]

Well we needed a second motorbike: she can go visit her parents nearby whilst I can explore the surroundings....

 

Looked at second hand motorbikes, too expensive for what you get. At one shop all were priced 18500 baht or 1500 cash and monthly payments of 1100, no idea how many months you need to pay though :alert:

 

Then we saw a shop advertising new Honda Click's: pay 4900 and 0% interest, an other bike (125cc) had the sing 9900 and 0% interest. Well that got me interested....So we asked: You have to pay the thing in 3 (THREE) monthly installments. Which came to 3x16k = 48k. So I asked how much if I pay cash? 47k. I went into an argument on interest: if I pay in 3 months I will pay 1k more, so that's NOT 0% and anyway I did not see the advantage of paying just in 3 months. Found this to be a set-up.

 

We went to the next Honda shop in town and asked how much for the same thing in their show room? Answer 46k Then I asked what if I give you 10k now and pay you 3k every month? (In one year 3x12 = 36k + 10 downpayment = the 46k. After some calculations on paper and with the help of a machine she came up with the answer: total to pay will be 60K !!!!! Wow, that's 14k interest on a loan of 36k which you pay off in monthly installments of 16.66 months or 28%!!! There goes the theory of 0%

 

Finally I did buy the thing for 45k, off 3k from the so-called 0% interest promotion. Lets call this Cash Discount?

 

Seems to me LOS is not the place to buy by credit :thumbdown:

[Denarius]

Honda click:

 

 

[khunsanuk]

Hi,

 

Heard this a lot, and mostly related to motorbikes (more scamming of the poor uneducated masses?).

Interest rates on motorbikes are often outrageous.

 

Sanuk!

 

[Bangkoktraveler]

If you go to the bank reposessed auctions, Thais buy the bikes but have a tendancy to make a few payments and after about 6 months, the banks reposess them. Talk about a great way to build up your credit.

[saucier01]

not too far off from what some dealers do in the states. they will guarentee credit for anyone. what they don't tell you is that the interest rate will be 24% or more.

[torrenova]

Went to get a new truck on tick. Best deal in the missus' place in Nangrong for a Toyota Hilux. No deals on Isuzu as they walk out of the showrooms up there. Quite the opposite in Pattaya.

 

So we agree 25% down and balance over 4 years.

 

We wanted to borrow Bt583,991 at 3.7% over 48 months which he worked out at Bt13,967 whilst my calculation was Bt13,108 per month.

 

Now the difference is Bt859 per month or Bt41,252 over the 48 months.

 

Could I get him to understand that you cannot work out interest on a depreciating balance on a basic plus minus calculator ? Could I get him to understand that I was not borrowing the whole sum for 4 years which is how he calculated the interest ?

 

After a few phone calls back to him and after explaining it to my missus, we are actually getting the figures from the finance company. i suspect that they are trying to pocket the Bt41,252 due to ignorance of the local population. They will not get it anyway.

 

Going back up at the end of the month. We will see !

[SingaporeSteve]

The formula you describe the salesman used is the standard way of calculating this type of loan - it works exactly the same for most un-secured loans anywhere in the world, where they can get away with a low headline interest rate value due to absence of consumer protection laws - the reality is that money costs circa 7-8% to borrow. there is no real subsidy from the manufacturer, so they say the interest rate is say, 3.9% but of course its not as you rightly point out the balance is reducing over the period of the loan. However thats just the way it works - go to the bank and borrow on a capital reducing loan and see how much more expensive or cheap it is. i suspect it will end up more expensive from a bank as they are very unlikely to lend to you at the MLR which is about 8% at the moment unless your buying property.

 

Cheers

SS