First-time car buyer plan approved

[Admin]

First-time car buyer plan approved
Published: 13/09/2011 at 01:26 PM
Bangkok Post: Online news:
 
The cabinet on Tuesday approved an excise tax deduction for first-time car buyers as proposed by the Finance Ministry. The scheme takes effect from Oct 1, deputy government spokesman Chalitrat Chantharubeksa said.

The excise tax deduction scheme is intended for first-time car buyers who buy vehicles between Oct 1, 2011 and Dec 31, 2012.

The vehicles must be cars with an engine capacity of less than 1,500cc  or double-cab pick-up trucks with an unlimited engine capacity but a price not exceeding one million baht per unit.

The vehicles must be manufactured in Thailand.

Buyers must be 21 years of age or more and  can ask for a refund of the excise tax deduction for one year after the purchase, but the refund must not exceed 100,000 baht.  The tax refund payments will begin on Oct 1, 2012.

The buyers are required to retain ownership of the new vehicle for at least five years.

The Finance Ministry will seek cabinet approval of 100 million baht from the 2012 budget and 30 biillion baht for the tax refund in the fiscal 2013 budget.
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First car plan 'will boost economy'
Published: 13/09/2011 at 03:04 PM
Bangkok Post: Online news:
 
The tax deduction for first-time car buyers and the planned cut in corporate income tax from 30 per cent to 23 per cent would increase the seed money circulating in the economy, Pairin Chuchotethavorn, chairman and president of PTT Plc, said on Tuesday.

Mr Pairin said the refund on excise tax for first-time car buyers could boost car sales to 500,000 units and  related industries and farmers would also gain benefits from it.

For example, one vehicle needs five tyres and that means the sale of by 2.5 million tyres.

He did not believe the first car tax cut  would  lead to a sharp increase in fuel usage as the cars eligible for the tax incentive were generally limited to 1,500cc engines or less.

He said PTT paid  70 billion baht to 80 billion baht in corporate tax each year. If the tax were reduced by seven per cent, it would have enough money for  planned business expansion.

Opposition shadow finance minister Korn Chatikavanij, of the Democrats, said farmers are at this time suffering from   floods, but the government was instead intent of implementing a policy encouraging high income people to by a car.

The former finance minister was worried that this policy would worsen  already critical traffic congestion.

[Admin]

Lenders baulk at first-car scheme

Higher default risk will force changes
Published: 15/09/2011 at 12:00 AM
Bangkok Post: Newspaper section: Business
 
The government's first-time car buyers' programme may face a major setback as leasing and finance companies are reluctant to cooperate as they see a high risk of loan defaults.

Lenders yesterday proposed that the excise tax rebates, which could be as high as 100,000 baht, be sent directly to them instead of to car buyers to ensure that borrowers do not default.

The proposal emerged in a meeting that Finance Ministry official held with finance and automobile executives on details of the programme.

"The meeting was just held to clarify the details of the programme but was not intended for the industries to question the problems related the programme," said an industry source.

Businesses support the programme in principle but are upset that government officials did not consult them beforehand, and say some aspects of the programme are impractical.

The automobile industry, for example, is disturbed that the programme would narrow the price gap between conventional compact cars, which face a 30% excise tax, and eco-cars taxed at 17%. Companies are investing billions to make eco-cars after a big push by previous governments and the Board of Investment to encourage them.

Lenders, meanwhile, fear the number of vehicles seized for non-payment may double from around 10,000 a year at present. Seized cars are a big burden for lenders who face the cost of auctioning them to recover money.

They also say the prospect of receiving tax rebates directly from October next year may induce buyers to not honour hire-purchase contracts.

"This will force the leasing and finance companies to increase the down payment for car hire-purchase to prevent their customers from allowing their cars to be seized easily," said a source who asked not to be named.

If the tax rebates were returned to the lenders, customers would benefit from lower or fewer monthly installment payments, the industry says.

However, Deputy Finance Minister Boonsong Teriyapirom and Excise Department chief Pongpanu Svetarundra told the meeting that the tax rebate would only be returned directly to car buyers, as stipulated by the cabinet.

The lenders countered that they were the real owners of any cars against which customers had borrowed money.

They also expressed concern that even if they auctioned a seized car, its title could not be transferred to the winning bidder. The programme requires car buyers to keep a car for at least five years to qualify for the rebate.

If the programme failed, the sources said the government could not blame the leasing and finance companies.

Chalit Silpsrikul, vice-chairman of the Hire Purchase Business Association, said down payments would have to rise to reflect the high risk, as some people would buy vehicles even though they could not afford them.

Mr Boonsong suggested that if buyers default and cannot maintain ownership, they should have to return the tax rebate to the government. "If they fail to return money, they would face a legal charge, that's the deal," he said.

Kasikorn Research Center estimates the tax rebate would cover 68% of the vehicles in the market.

It says the scheme, which runs from tomorrow to the end of 2012, would increase car sales by 12-17%, to between 900,000 and 920,000 units, from a previous projection, 880,000 to 920,000.

Sales next year could total between 980,000 and 1.03 million units, it added.

Source:
http://www.bangkokpost.com/auto/autoscoop/256615/lenders-baulk-at-first-car-scheme

[toffo]

Im pissed off bought a new car 3 months and now they go and do this.. Just my luck

[Admin]

First-time car buyer scheme off to slow start
Published: 17/09/2011 at 12:00 AM
Bangkok Post: Newspaper section: News
 
Car dealers reported modest traffic at their showrooms yesterday at the launch of the government's first-time buyer rebate programme.

Sales staff contacted at several dealers across Bangkok said they fielded numerous queries about the programme, which offers buyers tax rebates of up to 100,000 baht for their first car purchase.

But while there were plenty of questions, actual sales were slow.

Ruethaiwan Boonsap, a saleswoman at Mazda City at Lumpini in Bangkok, said visits yesterday were higher than normal, but less than might have been expected given the month-long wait by buyers before the government fine-tuned details of the programme.

Most of the visitors were first-time buyers seeking information, she said.

Related: Diplomats drawn into the problem
At Pathumwan Honda, staff reported a similar level of interest. Sales over the past month have been slow as potential buyers held off purchases in hopes of qualifying for the programme.

Firm data on car sales will not be available until later this month when industry sales figures are released. But auto executives predict the programme, which runs until the end of 2012, should push domestic sales to an all-time high.

The programme is open to first-time buyers aged 21 and over, buying a new pickup or small-engine car.

Under the programme, buyers will receive a refund of excise taxes paid on the car after purchase, up to a limit of 100,000 baht. Buyers may not sell or transfer title to the car for a period of five years, or they will have to refund the rebate.

The Excise Department said it would allow financial institutions to seize and sell cars purchased under the rebate programme if a buyer defaults on their payments. If a financial institution seizes a car after a default and sells it on the open market, any money remaining after the debt is cleared must be remitted to the government.

The Excise Department will file civil claims seeking repayment of the original rebate from buyers who fail to comply.

Chalit Silpsrikul, an executive vice-president at Tisco Bank, said auto lending and car sales should set a new record this year, thanks to the programme.

Mr Chalit, also the deputy chairman of the Hire Purchase Business Association, estimated sales this year will reach 950,000 units compared with 800,000 last year, with auto lending for new and used vehicles reaching 500 billion baht.

Around 80% of auto buyers use credit.

Among cars qualifying for the 100,000 baht rebate are Honda's City and Jazz, Toyota's Yaris and the Chevrolet Avio.

Among pickup trucks, the Chevrolet Colorado is listed as benefiting the most from the scheme with a refund of 26,000 baht. Pickups are charged excise tax significantly lower than cars, resulting in a lower potential rebate.