Whether you’re eyeing up that sassy sedan or that rugged 4×4 in a Thai car dealership, there’s just one niggling question lurking in the shadows. How are you, as an expat, going to afford your gleaming new motor? Hand on heart, it’s quite normal to feel a right pickle about finance options in a foreign land. Don’t worry, though; we’ve got your back. Here’s what you need to know about financing your car purchase in Thailand.
First things first, expats can get car loans in Thailand, but it comes with a few conditions. You’ll need a local bank account in good standing and a work permit or similar documentation to show that you’re staying long-term. Some individuals have allegedly secured a car loan on a tourist visa, but this seems to require a bit more effort and a significantly larger deposit. Plus, it’s often reliant on the discretion of each bank branch’s manager.
Finding a guarantor in Thailand
When purchasing your first car in Thailand, you’re required to have a local guarantor. This could be a friend or a relative who understands their responsibilities if you default on the loan. However, for subsequent car purchases, if the loan is taken from the same source, a guarantor isn’t necessary. But keep in mind, if your deposit payment is between 50-70%, you may still need a guarantor.
Meeting the down payment requirements
Banks in Thailand generally require a minimum down payment of around 20% for your new car. If you’re new in the country or don’t have sufficient funds in your Thai bank account, they may request a larger down payment. Be prepared and have copies of your work permit, passport, bank statement, and wage slips at the ready before applying for a loan.
Interest rates on car loans
The interest rates for car loans in Thailand generally float between 2-4%. However, these rates can fluctuate based on your down payment and lease period, which generally spans 24 to 84 months. In certain promotional periods, the interest rate might drop under 1% if your down payment is over 25% and the loan duration is less than 48 months.
Types of car loans in Thailand
There are two main types of car loans in Thailand:
1. New car loans
Eyeing that sparkling new car at the dealership? New car loans in Thailand can get your foot in the door and your hands on the steering wheel. These loans offer you the convenience of potentially customising your payment term, subject to approval. Tempting interest rates and a long loan term could be part of the deal, extending the joy of owning a new car over a maximum of seven years.
Intriguingly, it might also be possible in some circumstances to transfer your hire-purchase, offering an additional layer of flexibility. Striving to satisfy the diverse needs of customers, these loans might be available at all authorised dealers, making the dream of owning a new vehicle a likely possibility.
2. Used car loans
Switching gears to the pre-owned vehicle market, it’s possible to find a hidden gem in the form of a used car loan. This could become your financial ally when the goal is to purchase a vehicle that has a bit of experience on the road.
Used car loans can make it possible for you to acquire a pre-owned car from either a private dealer or a seller. Down payments and interest rates might be lower, which is ideal for budget-conscious consumers. Plus, there’s also the potential for an enticing payment term that aligns with your needs.
Additionally, the credit limit might be surprisingly high, with the potential of financing up to 90% of the car’s value.
Financing options for expats in Thailand
Now that you’re clued up on car loans in Thailand, you’re likely wondering where you can actually get these loans. Here are your options.
1. Car dealer financing
Many folks choose to get their car loan from the dealership where they buy the car. The good thing about this is that the dealer usually knows lots of finance sources. This can make things easier compared to going to a bank yourself.
Before signing any paperwork, be sure to check all the details. There can be special offers at the start that may change over time, so make sure you know just how much you’ll be paying throughout the loan term.
If you’re not from Thailand, getting your loan from the dealership can make things simpler. When you buy a new car from a showroom, you deal with just one company for both buying the car and getting the loan. It also helps you build a relationship with the dealer, which can be a plus when you want to upgrade your car or need new parts later.
If a certain bank doesn’t give you a loan, the car dealer might be able to find one that will. They can do this because they make some money from selling the car to you.
But be careful to make sure your dealer is allowed to give car loans. Official dealerships are usually okay, but some private firms might not always follow the rules when it comes to giving a loan. Play it safe and make sure your dealer is authorised.
2. Bank Financing
In the face of Thailand’s strained economy and climbing household debt, the risk of loan defaults has led banks to bolster their safeguards. As a result, securing a car loan may involve stricter conditions, such as the need for a Thai guarantor based on individual circumstances.
On the brighter side, Thai banks continue to display a welcoming stance towards foreigners when it comes to car loans, setting a stark contrast with the more stringent rules on property financing. Moreover, attractive perks are in play to encourage borrowers – think of 0% interest introductory offers as a testament to this trend.
Below are some of the banks in Thailand that offer car loans.
SCB
SCB offers car loans, not just for locals but also for foreigners. They give you various choices for both new and used cars. You can borrow up to 95% of the cost of a new car and up to 90% of a used car. Plus, you have the flexibility to pay it back over a long period – up to seven years!
Applying for a car loan with SCB is quick and easy. They make sure you won’t have to wait long to bring your dream car home. What’s more, SCB can help you work out the best plan for you when it comes to loan terms and payments.
SCB also lets you transfer your hire-purchase rights to a third party, which could come in handy if you ever decide to sell the car.
To apply for a car loan at SCB, all you need is proof that you live in Thailand, six months’ worth of bank statements, and proof of address.
No matter if you’re after a brand-new ride or a reliable second-hand car, SCB is ready to help you make it happen. And it’s all made easy and convenient for you. Now that’s what I call good banking service.
2. Krungsri
Like SCB, Krungsi offers two types of car loans for foreigners: new car and used car loans.
The Krungsri New Car loan, as its name suggests, is for getting a brand-new car. To apply, you need a salary slip, an ID card, and a house registration copy. Working full-time is essential, and if you’re a foreigner, a work permit and a Thai guarantor are necessary. Age should be between 20 and 65, and a one-year work history is required. As long as your documents are complete, get ready for a quick response within 24 hours.
On the other hand, the Krungsri Used Car loan assists in buying pre-owned cars. They offer up to 80% of the car’s value, with an easy instalment plan for repayment. For this loan, you need the same documents and requirements as the New Car loan. You’ll also need a Thai guarantor. What sets this loan apart is the Krungsri Auto Extended Warranty, which protects car parts for 2 years or up to 70,000 km.
3. Bangkok Bank
Instead of a loan specific to cars, you can get personal loans from Bangkok Bank. This bank offers a range of personal loans, one of which allows you to harness your savings as collateral. Through this plan, you may receive up to an additional 100% on your loan, potentially doubling your available funds. The payback term spans up to ten years, providing you with ample time for repayment. However, please note that the approval and subsequent loan amount are contingent upon the value of your savings.
Do keep in mind that these loan services are primarily available to customers who maintain a payroll account with Bangkok Bank. So, having a payroll account might ultimately influence your eligibility for the loan.
Once approved, the loan can be utilized according to your financial needs. This means that you can use the money to buy a car, new or used.
Yes, getting a car in Thailand is a journey, but it’s definitely one you can navigate. Know the requirements, get your documents in order, and explore your options. Whether it’s a shiny new ride or a sturdy pre-loved one, you’re geared to make this happen.