New-car sale promotions hit loans for used vehicles
Saving on maintenance, free insurance outweigh 'cheaper prices' for some
The Thai Hire Purchase Association expects lending for used-car purchases to return to normal growth next year once the intensive campaigns by automakers and their dealers to buy new vehicles ease off.
So far this year, lenders have seen a 20-per-cent reduction in used-car loans, said association chairman Anuchart Deeprasert.
Some dealers have launched strong promotions to clear their inventories of used cars but there has been little response from consumers because the new-car promotions are more enticing, he said.
Anuchart, who is a senior vice president at Thanachart Bank, the leader in the instalment-loan market, said TBank’s used-car loans had dropped by 30 per cent from 7,000-8,000 units a month.
Even though used cars are cheaper than new ones, buyers consider that they can save costs on maintenance and first-class insurance while also enjoying zero-interest loans for three to four years, he said.
The aggressive new-car sales campaigns have been fuelled by the desire of automakers and dealers to continue the sales growth they enjoyed during the government’s first-car-buyer scheme last year.
These attractive promotions have been running since July, but new-car sales have shown flat monthly growth, Anuchart said. New-car sales in August were 98,000 units, similar to July, and this month’s figure is expected to remain unchanged.
Many people have already acquired vehicles under the first-car scheme, which wound up at the end of last year. Other prospective buyers are waiting for Motor Expo 2013, which will be held in December.
“One reason that the promotions are not being welcomed by potential buyers, apart from the low season, is that they expected the promotions at the Motor Expo will be better than the current ones,” he said.
However, sales of 98,000 cars a month are reasonable and represent real demand, he said.
Commercial banks might not launch campaigns at the Motor Expo if auto manufacturers and dealers keep using the current promotions, Anuchart said.
“We may join with some dealers to launch a low-down-payment scheme for civil servants or state-enterprise officers as this kind of customer is low-risk,” he said.
Anuchart said zero-interest instalment plans remained the priority campaigns to lure car buyers, and a grace period could be an additional incentive seen at the Motor Expo.
