'Out of 10 customers who ask to buy a car, 7-8 people pay in installments with the bank'

Mr. Quang Huy (25 years old, Hanoi), an employee of a large car dealership in Hanoi, said that since the beginning of 2017, most customers who have come to buy cars have bought on installments.

"Most customers only borrow 50% of the car's value, but many customers borrow up to 70 - 80% of the car's value," said Mr. Huy.

He also shared that banks, car dealers and employees like him all want customers to borrow money to buy cars on installments. If customers borrow money to buy cars on installments, he will receive both a sales commission and a percentage of the debt that customers borrow from the bank.

Legal guarantee is a certified copy of the "vehicle under mortgage" certificate

The director of a large car dealership in Hanoi also said that since the beginning of the year, out of 10 customers who came to ask about buying a car, 7-8 people bought it on installments.

According to this person, buying a car on installments is currently popular in two ways: the customer borrows from the bank and then goes to the dealer to buy, or the dealer acts as an intermediary between the bank and the buyer.

Recently, commercial banks have promoted preferential policies for customers to borrow money to buy cars on installments.

Accordingly, in addition to collaborating with car dealers to offer promotional programs to customers, commercial banks also continuously launch their own policies for customers borrowing money to buy cars.

More and more people buy cars by installment bank loans.

In the first half of 2017, many banks simultaneously launched car loan packages with commitments of simple procedures, limits of 70-100% of the car's value, loan terms of up to 5-7 years, and even free fees for early repayment...

The director of a commercial bank branch in Ho Chi Minh City said that the bank is currently applying 3 very preferential interest rate packages for customers borrowing to buy cars. The interest rates for car loans are even much lower than the interest rates mobilized at this bank.

Specifically, the lowest interest rate package is 6.29%/year, but only applies for the first 3 months, after which the interest rate will float according to the market. The interest rate package of 7.49%/year is maintained for 6 months, then also floats. The interest rate package most popular with car loan customers is 8.09%/year, fixed for 12 months.

The floating market interest rate is currently around 11.59%.

"Current bank loan packages all lend up to 80% of the car's value. With all three interest rate packages, if customers maintain the loan for 4 years, from the 5th year onwards, they will be exempt from prepayment fees and will not be charged interest penalties," he said.

Many banks have simultaneously launched car loan packages with commitments of simple procedures, limits of 70-100% of the car's value, and loan terms of up to 5-7 years.

According to this person, the interest rate mobilized at the bank is currently more than 7%/year, so the interest rate for car loans is quite low. After completing the procedure, the customer will keep the car, the bank will keep all the original documents according to regulations. The bank will issue the customer a copy of the car registration with a stamp that the car is mortgaged at the bank to participate in traffic.

Every 3 months, customers must go to the bank to renew their temporary papers.

Mr. Bui Long (24 years old, Hanoi), a credit officer at a commercial bank, was excited when a customer expressed interest in borrowing money to buy a car on installments. However, this employee also said that the current preferential loan interest rate packages are just a formality.

"The current interest rate is around 10.5%/year. The banks announced preferential interest rates of 7-8%/year are only special interest rates applied in the first few months, after that they will be released according to the market, up to 11-12%/year," said Mr. Long.

After introducing preferential policies at the bank, such as interest rates of only 0.75% in the first month and loans of up to 90% of the car's value, Mr. Long also carefully advised customers on ways to enjoy lower interest rates.

"If customers do not declare that they are borrowing money to buy a car but to use it for production and business purposes, they will enjoy a more preferential interest rate. Customers only need to prove their income and commit to being able to repay the debt. I will take care of all the remaining procedures and paperwork from A to Z," Mr. Long affirmed.

This credit officer also said that the car market has seen a sharp decline in prices since the beginning of 2017, and many customers have come to him for advice on buying cars on installments. There are days when he advises 2-3 customers in need.

Mr. Van Tin (32 years old, Hanoi), a customer of Mr. Long who just bought a pickup truck, shared that he borrowed more than 200 million VND from the bank with a term of 4 years. Currently, he pays the bank nearly 7 million VND in principal and interest each month.

"The original vehicle registration is kept by the bank. They gave me a copy and a bank certificate, but it is only valid for 3 months. Every 3 months I have to go to the bank to reconfirm," said Mr. Tin.

According to Zing