Question: Car Financing with VAT added

[semperfiguy]

ok i have got the reply from my cousin ,and we are looking at this the wrong way ,we do not pay 2 times vat ,as all calculations are made vat inclusive , i will give an exact calculation how it should be for example buying a nissan almera 599.000 baht incl vat /20% down payment / 4% annual/term 60 months ...calculations all including vat!
purchase 599.000 - 119.800 (20% dp) = 479.200 baht to finance
479.200 x 4% = 19.168 x 5(year) = 95.840 + 479.200 = 575.040 total to pay back over 60 months /again incl vat
575.040 : 60 = 9.584 baht monthly payment including vat...(8.957 excl/vat 627 baht)
easy to check all ok
479.200 + 95.840 = 575.040 total (60 x 9.584 = 575.040)
easy to check all the freebies are really free
this is how all finance calculations (for car or motorbike ) should be done , if not ??,walk away...
so semper check your finance offer from isuzu according to my example here and you should know ,good luck all....

Thanks Kopkei for all your efforts. I genuinely appreciate it! I placed this same post on Thai-Visa Forum and just got back the same results as your post, so sounds like this is the way it's done, which is completely different from simple financing in the US. In the States the interest is calculated each month based on the unpaid principal balance each month after deducting the previous month's installment which includes a reduction in the principal amount. Whereas, in Thailand the interest is applied annually to the full amount of the original principal amount. In the example that I provided, the 2.69% interest in Thailand would actually be a 5.03% interest, so Thailand is a huge ripoff so far as financing is concerned. The 2.69% in reality is 5.03% the way the rest of the world calculates finance charges, and the customer believes he's getting a good deal which confirms my bias that nothing is ever as it seems in Thailand. So, now I see that my stepson is actually NOT paying the VAT twice, but the difference in the way interest is calculated here accounts for the greater monthly installment which I mistook for a 2nd VAT being added to his monthly installment. It all makes sense now.


Thanks for all those who made a contribution to this post. I will consider the question answered and the topic closed with no further comments required. My stepson should be picking up his new truck today, and we are both satisfied that we now understand the mechanics of auto financing in Thailand.

[deankham]

Hope he enjoys the new Truck. Great feeling picking up a new car / truck

[newtovillagelife]

Hope he enjoys the new Truck. Great feeling picking up a new car / truck

Until you get the first scratch or paint chip....

[semperfiguy]

Hope he enjoys the new Truck. Great feeling picking up a new car / truck

Thanks for the well wishes Deankham!

[sometimewoodworker]

Thanks Kopkei for all your efforts. I genuinely appreciate it! I placed this same post on Thai-Visa Forum and just got back the same results as your post, so sounds like this is the way it's done, which is completely different from simple financing in the US. In the States the interest is calculated each month based on the unpaid principal balance each month after deducting the previous month's installment which includes a reduction in the principal amount.

The Thai system calls car financing X price + Y% interest.

It really isn’t at all.

To be truthful it should be called X price + Y loan arrangement fee, the amount of the fee is shown as a percentage of the base buying price.

It doesn’t matter how soon you pay off the loan the amount paid will not go down.

[kopkei]

In the States the interest is calculated each month based on the unpaid principal balance each month after deducting the previous month's installment which includes a reduction in the principal amount....
it is applied in los too on home financing ,not car or mb...