Help: Rule78 bank loan matters.

[Ladykillerz]

if you have no intention to drive for long, it is advisable to lessen your loan period or rather no loan at all.

either go for 100% payment or go for min. loan and get the 3+2yrs warranty.

just my POV.

[SimonTan]

I agree by right it would seems fair to based it on monthly rest.

But the current system is very simple for layman to understand and each month is fixed payment.

 

You see, even if you think monthly rest is more fair, but banks are profit center. The bank will increase the car loan interest rates to a higher level to 'recoup' back or at least 'earn' the same $$$ from loan.

 

Old method instrest rate now is 2%, if bank changed to monthly rest then it might charged interest at 4%(for example only), to get the same $$$ profit from the car loan.

 

So over the 7 years loan period of the current one vs the monthly rest one, the $$$ paid to bank as interest will more or less be the same. If not the bank will not survive as they have gotten used to the expected profit margins from car loans.

 

Take my 30 years housing loan....from the breakdown of the monthly payment, the first 15years has a higher interest component to it. Meaning if I pay $2000 per month, maybe $1400 will go towards bank interest, while $600 will go towards deduction of the loan debt.

 

I assume that if banks were to change to the "monthly rest" method....I think monthly repayment component will also goes more towards the interest rather than clearing the loan amount. Only halfway thru the loan period will it equalise. By the halfway mark, the bank would already have comfortably earned maybe 75% of the total interest profits!

 

I might be wrong.

 

 

 

 

 

By the way, the way Auto loans are calculated is really b-------t. By rights should be "monthly rest" calculation. The way it is currently done is out of bad practise from the 60s, so backwards and cut so many carrot head.

 

[Carer]

sibei cham leh, buy car need to like that calculate. jialat. its a happy thing, if u can afford, like it, den go sign already. happy buying simontan.

 

or u waiting for people to say simon says, go and sign?

[SimonTan]

Waiting for you to cheer for me for being smart and I have made a right choice asking so many questions.

So how, should I sigh or not hur?

 

 

sibei cham leh, buy car need to like that calculate. jialat. its a happy thing, if u can afford, like it, den go sign already. happy buying simontan.

 

or u waiting for people to say simon says, go and sign?

 

[Mach23]

Waiting for you to cheer for me for being smart and I have made a right choice asking so many questions.

So how, should I sigh or not hur?

 

At the end of the day, what matter most is timing: whether you need to change the car now and whether further quota cut = higher COE will pan out over the next few months.

 

On hindsight (which is of course 6/6), i could have bite the bullet to trade in my car at a loss and buy a new one last year, then I can sell them today at little or no depreciation....

 

You can try to take advantage of the SE or he/she can take advantage of you, but COE will be the key determinant of your car ownership cost.

[SimonTan]

"You can try to take advantage of the SE or he/she can take advantage of you"

 

Wah...cannot lah. Although the SE is indeed sexy. But I cannot do that just because I want to buy a car from her.

What if she not happy and complain to her boss?

Edited July 12, 2010 by SimonTan

[Iisterry]

http://www.mycarforum.com/index.php?showto...639731&hl=*

[Ben5266]

The +2 year warranty is actually to secure business for their service center.

I am sure, there will be a clause state that, the car must be serviced at KM workshop during the warranty. Miss one service, warranty void.

So, they use your money, from the Bank to secure future business for their workshop. Genius!

 

$77k for Jazz with $23k OMV is indeed very attractive.

I would suggest you go and counter offer them, $76k, with free 1st year insurance, free first 3 servicing, 50k@ 4y loan and 3+2y warranty.

Don't forget to ask for guaranteed COE too.

Happy buying!

 

BTW, I am going for my 40k servicing by KM soon. The damage could be $800! I am searching for lobang to minimize the damage. It will be your turn 2 years later if you decide to buy a Honda today.

[Naruto13]

The +2 year warranty is actually to secure business for their service center.

I am sure, there will be a clause state that, the car must be serviced at KM workshop during the warranty. Miss one service, warranty void.

So, they use your money, from the Bank to secure future business for their workshop. Genius!

 

$77k for Jazz with $23k OMV is indeed very attractive.

I would suggest you go and counter offer them, $76k, with free 1st year insurance, free first 3 servicing, 50k@ 4y loan and 3+2y warranty.

Don't forget to ask for guaranteed COE too.

Happy buying!

 

BTW, I am going for my 40k servicing by KM soon. The damage could be $800! I am searching for lobang to minimize the damage. It will be your turn 2 years later if you decide to buy a Honda today.

 

because i think its a 2008 model. seems they have been for clearing very long. plus honda business seems weak lately if u compare against other AD.

 

wonder how will it affect the resale price in years to come though, or no effect. as in purchase in 2010 but 2008 model.

[7007]

I believe the offer Jazz YOM is 2008 YOM, on the paper KM is selling at loss....ask yourself why it is so...

 

mind you that it is sitting at dock or whatever place KM is holding for more than one & half year under rain & shine...

 

Initially the price also attracted me but on second thought in view of future sales... unless you are can drive for next 10 years

[7007]

What was the OMV your SE quoted? I was told it is at least $24K but I check online is only $22K..

 

If you really want to buy. make sure OMV is written in black & white and counter-signed a senior manager.....else like PM case....xiao liao!!!

[Carer]

Waiting for you to cheer for me for being smart and I have made a right choice asking so many questions.

So how, should I sigh or not hur?

 

actually the only dilemma is not to sign for the car or not, it is whether to take up 4yr or 7yr loan am i right?

 

u already decided tat the price is good, willing to buy, but why let the 4 yr or 7 yr thing drag your purchase? remember, time and tide waits for no man.

 

i am giving u advice but it seems to me that you are not receiving it the right way. wat do u actually wan to hear from forummers? just sign lor if u wan.

 

calculation tells u the $1k difference should you redeem the car after 2 yrs. pls bear in mind, what you plan now is not the same 4 yrs down the road.

 

aiya, put it simply, just do it. i will see you later.

[Darryn]

I agree by right it would seems fair to based it on monthly rest.

But the current system is very simple for layman to understand and each month is fixed payment.

 

You see, even if you think monthly rest is more fair, but banks are profit center. The bank will increase the car loan interest rates to a higher level to 'recoup' back or at least 'earn' the same $$$ from loan.

 

Old method instrest rate now is 2%, if bank changed to monthly rest then it might charged interest at 4%(for example only), to get the same $$$ profit from the car loan.

 

So over the 7 years loan period of the current one vs the monthly rest one, the $$$ paid to bank as interest will more or less be the same. If not the bank will not survive as they have gotten used to the expected profit margins from car loans.

 

Take my 30 years housing loan....from the breakdown of the monthly payment, the first 15years has a higher interest component to it. Meaning if I pay $2000 per month, maybe $1400 will go towards bank interest, while $600 will go towards deduction of the loan debt.

 

I assume that if banks were to change to the "monthly rest" method....I think monthly repayment component will also goes more towards the interest rather than clearing the loan amount. Only halfway thru the loan period will it equalise. By the halfway mark, the bank would already have comfortably earned maybe 75% of the total interest profits!

 

I might be wrong.

 

No you're mostly right, and yes, they will still earn the same profit.

 

I just feel that "monthly rest" is far more transparent.

 

One other thing that I would love to be declared here, is the effective finance rate, in addition to the interest rate. (the two are different).

 

I like monthly rest because it encourages early lump sum payments. And the borrower should never be penalised for paying off early - that is also crap

[Kerwen]

just pay wat u can afford mthly le... if u r comfortable with 4yr loan 1k mthly and drive 3-4yrs only, it only makes sense to take 4yr loan...

but if u intend to drive 10yrs, then maybe u can spread ur loan and keep the remaining $ for other use

[Desmondtwb]

TS, you bought already ?

[SimonTan]

Yes, SE say I very smart to book just before the LTA announced quota cut.

Anyway, SE very confident say next bidding likely to get. And all goes well can chute chia around mid august.

 

I think kah is desperate to clear stocks. The maths done on the arf and Coe really indicates kah is not making much profit. Whatever lah! Old stocks in the warehouse or not, got warranty I not worried!

My friends advice me to physically checked the undercarriage on the day of collection! If got rust must report, and get it rectified at the first services.

 

anyway sign already, now only have to wait patiently.