New Car Buying

[Possum]

My 2009 Hyundai i30 is becoming a bother and we need to get another car. Prefer to buy new but it's hard to get a straight answer from the sales people. We ask simple questions like, discount for cash? how long to get possession after paying? Can you itemize the total cost? They push financing a portion of the purchase price but are unable to say if there is a penalty for early payment. It is very frustrating. We are looking at Honda and Toyota. Any advice from those experienced here would be appreciated.

[Lee]

I would never buy a new car and take the 20% depreciation hit for driving the car off the lot.

3 hours ago, Greglm said:

but are unable to say if there is a penalty for early payment

There is no penalty for paying off a loan early as I understand it but there is no savings of money to be had. You will pay the full amount, plus the interest that is stipulated in your contract whether you pay the loan off in 2 years or 4.

[Joey G]

2 hours ago, Lee said:

You will pay the full amount, plus the interest that is stipulated in your contract whether you pay the loan off in 2 years or 4.

Haven't seen a loan in the US like that in over 40 years...  is that common in the Philippines?  But yeah the contract would stipulate the terms.

[Lee]

57 minutes ago, Joey G said:

Haven't seen a loan in the US like that in over 40 years...  is that common in the Philippines?

From what I understand this is the norm here in the PI.

[Mike J]

From google

<snip>Penalties for prepaying a loan are prohibited by the Consumer Act of the Philippines. Lenders found a way to charge the same as they call them processing fees entailed with the loan termination. Before you hand your full payment for the loan, think about your monthly expenses.<end snip>

What I find strange here is the dealers advertise the "All in down payment".   No mention of actual price, no mention of terms, interest rate, etc.  And from what I have heard, there is no haggling over price on a new vehicle.  You may get floor mats, registration, or some such promo, but the listed price if firm.

[Lee]

I would look at getting a bank repo car myself. The Metrobank where we do business downtown has had several cars sitting out front for months.

Buyer beware, of course.

[BrettGC]

We bought our 2022 Rush new from Toyota Dumaguete under their in-house finance and I can confirm there's no penalty for early payout with their in-house finance.  There was no discount for cash when we enquired, that may have changed though or be different depending on location.  

They were upfront about delivery timings and things were a little slow due to pandemic shortages when we purchased and they were right on the money.  When we enquired about purchasing a second vehicle a few weeks ago they gave us a realistic timeframe for the vehicle in question which due to popularity was 6 weeks. It should be noted that this is an improvement on the timeframes from last year. 

I have to say that everything to do with the purchase has been nothing short of exemplary.  They now even have a service where they come to your home to conduct log book servicing at no extra cost.  This is invaluable for us as we live 2-2 and a half hours away from the nearest Toyota service centre and they even come to us.  Coincidentally our first at-home service is tomorrow so it'll be interesting to see how it goes. 

When we had the accident last year, from the moment we reported it to their insurance provider to the moment the repairs were completed was 10 days with no hiccups or questions asked other than the standard you'd expect in that situation. Yes, it did slightly jack our premium up a little this year but that's to be expected but not as much as I thought it would be. 

It came with 1 year full comprehensive insurance and 3 years LTO - pretty much standard for new cars here. 

My only gripe is that the service schedule is a little over the top in that it's 5000km or 6 months rather than 10000km or 1 year which I'm more accustomed to and when that 6 months rolls around they go into stalker mode but I put a stop to that.  

Just don't walk in there between noon and 1pm; the place is a ghost town.  They're not government so the noon break is still a thing. 

Toyota Dumaguete is highly recommended. 

[Lee]

47 minutes ago, Mike J said:

Lenders found a way to charge the same as they call them processing fees entailed with the loan termination.

So the interest fees that you would have paid during the life of the loan are bundled up and called processing fees when you pay the loan off early. I didn't think that lenders had to use that much discretion when forcing someone to pay the loans interest fees. Seem to remember reading a notice in Metrobank stating that all monies will be paid in a home mortgage that is paid off early. Perhaps I'm misremembering.

17 minutes ago, BrettGC said:

I can confirm there's no penalty for early payout with their in-house finance.

Brett, did you pay your car off early and if so were there an actual savings of interest monies due to early payment?

If so, this might be somewhere to do your car shopping.

[BrettGC]

18 minutes ago, Lee said:

Brett, did you pay your car off early and if so were there an actual savings of interest monies due to early payment?

No, but we will be soon so I'll see if what they told me last year still holds and to see how much, if any, of the interest is converted to "processing" fees 

Edited June 14, 2023 by BrettGC

[hk blues]

We're in the market for a new car so have been doing a bit of research - It seems cash discount is a No No and in fact several dealers are offering discounts for particular banks' financing. Makes sense - I'm pretty sure the dealership will receive some form of commission from the bank when a finance package is sold.