Lenders plan special interest rates at motor show

The show kicks off on Wednesday and runs until April 5 at Impact Muang Thong Thani.
The most attractive auto-loan packages on offer will feature a 72-month term with zero interest, or an 84-instalment term for those who pay 5 per cent of the car’s price up front. Other lenders working in cooperation with auto producers will offer interest rates starting at 1.59 per cent per annum. In general, the zero-interest deals offered by banks will be subsidised by automakers trying to push sales after suffering a decline in January. Domestic car sales in the first month of the year plunged by 14 per cent to 590,000 units.
At the motor show, Thanachart Bank, the market leader in auto loans, will focus on offering special interest rates to its existing customers. Praphan Anupongongarch, executive vice president, said the bank knew the records of its existing clients, enabling it to offer them special rates. Furthermore, new customers at the show are expected to be chased by several lenders.
“They [new customers] will get special conditions from car sellers and hire-purchase partners. We believe that we should build a deep relationship with our existing customers by offering special rates for all vehicle models at this fair,” he said.
Zero-interest gimmicks are primarily aimed at drawing visitors to the show in order to stimulate sales, he said.
“We have to accept that the incomes of our customers have dropped, even though we have maintained our loan-approval criteria. Domestic consumption is expected to pick up when the government starts its investment projects,” he said.
Sakchai Peechapat, senior executive vice president of Tisco Bank, said it was not counting on much growth in auto lending this year and was instead focusing on quality loans. Uncertainty over future excise-tax structures is also affecting people’s car-buying decisions. For example, if the excise regime favours eco-cars next year, some think it might be worthwhile to put off buying one in hopes of lower prices.
On the other hand, those in the market for a vehicle with a larger engine might decide they are better off buying one now before the taxes on such cars go up, Sakchai said.
He agreed with Praphan, however, that overall purchasing power was not expected to show bright prospects in the first half of the year, but would recover in the second half after the government injects money into the economy through its projects.
Kusumann Lowsalaraks, executive vice president of Krungsri Auto, said the company would launch a “Krungsri New Car” campaign, highlighting a 90-month term for customers who pay 5 per cent of their new car’s price up front. These borrowers also will not need a guarantor.
The firm will also offer flexible instalment plans, while borrowers approved at the motor show will receive an expressway Easy Pass credit worth Bt1,000. Existing customers will also get fuel coupons worth Bt1,000.