PHV Bank Loan Help for my Dad!

[Jusnel]

Hi all.

I intend to purchase a car for my Dad to drive for Grab.

 

I will pay the 30% downpayment.

 

The thing is I was initially quoted 2.4% interest rate.

But upon hearing that my Dad is using it for Grab, the sales person increase the interest rate to 3.4% on the basis that PHV car loan will have higher interest rate even though Im only taking 70% loan.

 

I called LTA to clarify and they say they there is no such regulation.

I called the bank and the CSO tells me that as long as I register the vehicle under my Dads name (you can do that now for PHV) and not under a business entity, then the interest rate will not change.

 

The thing is I told the agent about this but she is adamant that she is right and says that I am flouting the law if my Dad attempt to drive PHV under the usual car loan. She is even willing to give up my sales.

 

So... who is right?!

Have u talk to a bank rep yet? Hearing from the horse's mouth is the best.

 

Just simply call up any bank (or the bank that the car agent going to get) and they will tell u.

 

As far as I know, no such rules. The only rule is the Insurance part.

[cmcex]

Buy in private name. Register as private car P10. Get normal loan rates. Buy normal private insurance on NTUC.

 

After car collected. Call NTUC insurance and request top up premium to change to commercial Ins. NTUC is the best.

 

Login to LTA an convert to Z10.

Go to vicom paste phv sticker.

 

Update the converted z10 car to grab.

 

My 2 cents.

 

Yes you can do so like that, and if the Hire Purchase/Bank/Finance knows and they do not agree, the loan will be voided and ful sum will be demanded to be settled in full. Unless the financier has been informed or they agree prior to loan activation.

 

Never never try this.

Edited June 9, 2018 by cmcex

[Jusnel]

Buy in private name. Register as private car P10. Get normal loan rates. Buy normal private insurance on NTUC.

 

After car collected. Call NTUC insurance and request top up premium to change to commercial Ins. NTUC is the best.

 

Login to LTA an convert to Z10.

Go to vicom paste phv sticker.

 

Update the converted z10 car to grab.

Just asking.

 

No need to pay up the loan when converting to commercial insurance?

[Jamesc]

Since you believe the salesperson is honest.

 

TS should just pay the higher interest rate.

 

Edited June 9, 2018 by Jamesc

[cmcex]

Thanks all for the advice.

 

I feel that the agent is honest because she is willing to give up the sales if I insist on the 2.4% interest rate.

 

But I am asking because I feel that she may be misinform. Because I called up Grab as well and they themselves is unsure of the circumstances, what more an agent.

In any case, I called up the AD and spoke to another agent who gave me the same reply.

 

So Im assuming either the top management is misinform and hence the whole AD.

Or the bank is indeed setting such a term.

The polarising outcome can have dire consequences.

 

In any case, a LTA officer just called me back and confirm that there is NO NEED to take a loan with the higher interest rate because of the new regulation where PHV can be the direct owner of the vehicle. I am requesting an email reply from them just to cover myself.

 

Ive also inform the Sales Agent but she have once again refuted what I say and say that it is per the Bank's terms. Which again put me in a spot.

 

As for bros who advice me to get my Dad to drive a rental car first or buy 2nd hand, thanks alot for the kind advice.

He have been driving for a few years now and Ive been helping to finance his car but having to change the car every year is time consuming and some of them break down every now and then which convert to income loss.

 

Especially thanks to @Wildfaye29 for the clear direction. :)

 

LTA knows nothing about loan, infact LTA knows s**t. Banks are the one controlling, cars meant for private hire carries more risk in general, hence they wanna tag on higher interest rates. PHV can be owned under personal name now but it has nothing to do with loan. P10 loans are meant for domestic leisure use and Z/R class are of a different class, in bank's context, these cars will garner higher mileage, risk of higher wear and tear, owner may not have the money to repair or maintain the car in the end cars repo chances higher.

 

Some banks approval advise will indicate clearly, "NO RENTAL/PRIVATE HIRE CAR" in this instance, if the banks find out, like i said, they can declare the loan voided and full sum be paid immediately to them.

 

Never try this stunt, i do know of ppl who does it, you answer to your own actions.

 

 

p/s: banks do have a set of interest rates for PHV and/or Rental cars, not so much company name or personal name.

Edited June 9, 2018 by cmcex

[Mustank]

Wah good discussion!

I come in to learn stuff

[cmcex]

Just asking.

 

No need to pay up the loan when converting to commercial insurance?

 

No need, but make sure your bank/finance agree, the terms when u signed the loan was for domestic leisure use not for hire purpose.

 

Not so much insurance, but the terms of the loan breached means the loan they can declare null and void.

[Jamesc]

TS just needs to see the loan form which he is going to sign.

 

If it says not for commercial use then he has to pay the higher rates.

 

If it doesn't specify then he he can get the lower rate.

 

The most important is what the loan contract says.

 

The sales lady should just show the contract to him.

 

Case close.

 

[Jusnel]

No need, but make sure your bank/finance agree, the terms when u signed the loan was for domestic leisure use not for hire purpose.

 

Not so much insurance, but the terms of the loan breached means the loan they can declare null and void.

Oh yes. U got good point.

 

Usually the car loan is for PERSONAL use. Spelt out clearly on the contract.

 

For commercial use, it's a different story.

 

TS, then it makes sense for Car agent to insist that she's right.

 

However, pls call the bank to verify. Hear it from the horse's mouth is the best.

 

I suspect some banks will allow, some don't.

[Lala81]

LTA knows nothing about loan, infact LTA knows s**t. Banks are the one controlling, cars meant for private hire carries more risk in general, hence they wanna tag on higher interest rates. PHV can be owned under personal name now but it has nothing to do with loan. P10 loans are meant for domestic leisure use and Z/R class are of a different class, in bank's context, these cars will garner higher mileage, risk of higher wear and tear, owner may not have the money to repair or maintain the car in the end cars repo chances higher.

 

Some banks approval advise will indicate clearly, "NO RENTAL/PRIVATE HIRE CAR" in this instance, if the banks find out, like i said, they can declare the loan voided and full sum be paid immediately to them.

 

Never try this stunt, i do know of ppl who does it, you answer to your own actions.

 

 

p/s: banks do have a set of interest rates for PHV and/or Rental cars, not so much company name or personal name.

Great info. Cleared everything up.

[cmcex]

Thanks all for the advice.

 

I feel that the agent is honest because she is willing to give up the sales if I insist on the 2.4% interest rate.

 

But I am asking because I feel that she may be misinform. Because I called up Grab as well and they themselves is unsure of the circumstances, what more an agent.

In any case, I called up the AD and spoke to another agent who gave me the same reply.

 

So Im assuming either the top management is misinform and hence the whole AD.

Or the bank is indeed setting such a term.

The polarising outcome can have dire consequences.

 

In any case, a LTA officer just called me back and confirm that there is NO NEED to take a loan with the higher interest rate because of the new regulation where PHV can be the direct owner of the vehicle. I am requesting an email reply from them just to cover myself.

 

Ive also inform the Sales Agent but she have once again refuted what I say and say that it is per the Bank's terms. Which again put me in a spot.

 

As for bros who advice me to get my Dad to drive a rental car first or buy 2nd hand, thanks alot for the kind advice.

He have been driving for a few years now and Ive been helping to finance his car but having to change the car every year is time consuming and some of them break down every now and then which convert to income loss.

 

Especially thanks to @Wildfaye29 for the clear direction. :)

 

 

The loan should be from MayBank, bcos only Hong Leong, UOB and Maybank does PHV cars, based on the rates she offered, looks like MayBank.

 

U can ask for UOB or Hong Leong, 3.28% PA only, Maybank is charging 3.5% PA for PHV/Rental cars

[Jamesc]

Next time we need some cut and paste standard replies.

 

 

My agent told me the contract says this. Is she telling the truth?

 

Standard reply: Just ask to see the contact and see if she is telling the truth.

 

 

 

Should I buy the BMW 5 series or the Merc E class.

 

Standard reply: Just test drive both and don't buy the one you don't like.

 

 

 

I tested both and don't know which one I like less.

 

Standard reply: Just flip a coin.

 

 

[Jusnel]

Another way to confirm is to approach another AD and ask any agent.

[Jamesc]

The loan should be from MayBank, bcos only Hong Leong, UOB and Maybank does PHV cars, based on the rates she offered, looks like MayBank.

 

U can ask for UOB or Hong Leong, 3.28% PA only, Maybank is charging 3.5% PA for PHV/Rental cars

 

Good info. 

 

[Selanking]

Learnt something new about the car loan.

How about those previously purchase the car under leisure use, but now converted to grab use, is there risk that bank found out the car owner break the rules in the contact and ask them to pay full immediately.

[Ldlian987]

Take note on the difference between interest rate and effective interest rate (EIR). EIR is always higher than interest rate. 

https://loanstreet.com.my/calculator/flat-to-effective-interest-calculator 

[Jusnel]

To TS,

 

I still think rent from Grab to drive is still better than buying a car for the purpose.

[Philipkee]

Next time we need some cut and paste standard replies.

 

 

My agent told me the contract says this. Is she telling the truth?

 

Standard reply: Just ask to see the contact and see if she is telling the truth.

What if she asks y I want to see her contact instead of the contract?

 

 

Should I buy the BMW 5 series or the Merc E class.

 

Standard reply: Just test drive both and don't buy the one you don't like.

 

What if: the car I don't like, my wife and MIL likes and the car I like, my wife and MIL hates? I paying for car but I also want happy ending.

 

 

 

I tested both and don't know which one I like less.

 

Standard reply: Just flip a coin.

 

What if: the coin lands on the edge?