car loan

[docchris]

well, i think if you have money to be left in the bank even if you buy the car in cash, its okay not to finance it. say you have 2million in your savings and buying a 1million woth car. thats ok. kasi you have money that can earn interest or that which can be useful in emergencies.

but if youll end up with nothing in your savings because you want to buy in cash, i think its wiser to take a carloan. even if you get a 20-29% interest on the loanable amount, it is juistifiable or reasonable because money can have inflation. and as previosly stated, money is more often than not higher in value than money tomorrow. say youllend up paying 100,000 more due to interest, magkano na lang ba ang 100,000 in the future?

thats IMO.

[kane]

^^^ Actually, the figures are too optimistic. The rate of return was placed at 20% (consistent over 5 years), and interest was compounded and plowed back as investment.

Iba kasi sa totoong buhay, especially in the capital markets. It's not enough that you have a good broker. You also need to know the ins and outs of stock trading, aside from economics, technical analysis, and dapat may "spider sense" ka rin.

Honestly, I put my excess money in the bank, specifically 5-Year Time Deposits, kasi tax-free and insured naman (250k and below). Maliit din kasi ang risk apetite ko.

If we use as a basis the performance of the Philippine market over the past three years, I would say that a return of 20 percent is actually very conservative.

During this period, the benchmark stock index has more than tripled. Yields from government bonds (both peso and dollars) have fallen down dramatically. If you look at the performance of mutual funds and trust funds, you would see that they have returned more than 100% over the past few years.

Case in point: ING's equity fund has returned 78 percent over the past 12 months. The Banco de Oro Peso Equity Fund has returned 89% while the iFund Large Cap Philippine Equity Portfolio is up 85 percent.

But I do understand that, as you said, your risk appetite is small.

As I have said before, there are risks involved but the potential for gain is also there. If you pay in cash, you have zero risk and zero money too.

You must be able to evaluate what kind of an investor you are. I am giving this advice because I do understand how much some people want to be able to buy a car. I am hoping that with these suggestions, I am able to help them use their money in the best way possible.

I realize that for ordinary people, it is difficult to get sound financial advice because you would have to pay for it. So, people usually swallow whatever the dealers or the banks tell them. Why do you think banks want you to give a downpayment as large as possible?

Anyway, feel free to message me for more questions. I appreciate the feedback

[devdevlin]

it is a little bit difficult to explain. let me give an example. i have 1 million. I am buying a car worth 1 million. I can either pay it in cash, or get a loan.

Choice 1: i pay in cash. i have a new car. 0 money.

Choice 2: assuming i get a 20% downpayment, and an interest rate of 30% for 5 years. that means, i will pay 200,000 now, and then over 5 years i will pay (800,000 remaining balance * 1.3 percent) = 1.04 million.

At this point in time, i have 800,000 still in cash. assuming i am a good investors, and i earn 20% a year on my money, my 800,000 will be

1st year = 800,000 * 1.2 = 960,000
2nd year = 960,000 *1.2 = 1.152 million
3rd year = 1.152 * 1.2 = 1.38 million
4th year = 1.38 * 1.2 = 1.66 million
5th year = 1.66 * 1.2 = 1.99 million

1.99 million less 1.04 million (the value of my loan over 5 years) = 950,000

the 950,000 is the money that i have left after five years. Looking at it this way, doesnt it make more sense to borrow longer and just use your money to invest?

A word of caution: There are risks involved. Remember, investments are not risk free. If you make a bad business judgement, you can still lose your money.

i agree with you kane, this is how my mom taught me as well. make your money work for you via investments. yun nga lang you have to take into consideration that not all people have 1M or 800K lying around. most of us do not have that kind of money kaya iniiksian na lng yun monthly amortization para hndi matagal matali yun pera so that we can pursue other investments (like maybe a house or a cruise or whatever). pero if i had that kinda money saved up id do the same thing, low dp low monthly and put the rest in investments. the investment will basically pay for the car itself and after the term i have some left. biruan nga namin ng mga frends ko to make money, you first need to have money hehehe

[puroy]

parang OT na...diba car loan yung thread? naging investment topic.

[Lucius]

^^^ Actually, the figures are too optimistic. The rate of return was placed at 20% (consistent over 5 years), and interest was compounded and plowed back as investment.

Iba kasi sa totoong buhay, especially in the capital markets. It's not enough that you have a good broker. You also need to know the ins and outs of stock trading, aside from economics, technical analysis, and dapat may "spider sense" ka rin.

Honestly, I put my excess money in the bank, specifically 5-Year Time Deposits, kasi tax-free and insured naman (250k and below). Maliit din kasi ang risk apetite ko.

Possible din yun sir, ung tito ko sa Sunlife nag-invest. Di ko lang alam which of the plans pero ung 250k nya (50k/year for 5 years).

Bumalik sa kanya 1M after 5 years. Fixed daw talaga na 1M, un ung plan na kinuha nya. Ewan ko lang how much pa if mas malaki ang down mo every year.

[nels76]

Mga gurus,

Advice naman po.
My loan application at BPI is taking too long to process.
I think one month na mahigit and yet wala pa din kami feedback kung approve ba o hindi.

Eto ung situation:
Mid May:
DAY 0 : went to BPI and applied for a car loan.
DAY 0 + 1day: may tumawag and nagpunta agad sa haus for some C.I.
DAY 0 + 1 week : submitted COE and Payslip
DAY 0 + 2 weeks: we received advice to submit COE from previous employer.
the COE was submitted the following week.

Until now, wala pa ding feedback considering that it was beginning June when we had our last documents submission.

I consistently make follow-up to the contact person pero sabi niya pina-process pa daw. I get impatient this week and inform the person na pag wala kami feedback within the week, we will cancel our application.

This is our (Couple and I) first time to apply for a car loan.
We have no account and walang kakilala sa BPI but we have joint account naman at Metrobank and Payroll is at Metrobank. Credit Card is from Metrobank din

Next week I am planning to apply na lang sa Metrobank.

Ayaw pang sabihin ng BPI kung disapprove.

[devdevlin]

Mga gurus,

Advice naman po.
My loan application at BPI is taking too long to process.
I think one month na mahigit and yet wala pa din kami feedback kung approve ba o hindi.

Eto ung situation:
Mid May:
DAY 0 : went to BPI and applied for a car loan.
DAY 0 + 1day: may tumawag and nagpunta agad sa haus for some C.I.
DAY 0 + 1 week : submitted COE and Payslip
DAY 0 + 2 weeks: we received advice to submit COE from previous employer.
the COE was submitted the following week.

Until now, wala pa ding feedback considering that it was beginning June when we had our last documents submission.

I consistently make follow-up to the contact person pero sabi niya pina-process pa daw. I get impatient this week and inform the person na pag wala kami feedback within the week, we will cancel our application.

This is our (Couple and I) first time to apply for a car loan.
We have no account and walang kakilala sa BPI but we have joint account naman at Metrobank and Payroll is at Metrobank. Credit Card is from Metrobank din

Next week I am planning to apply na lang sa Metrobank.

Ayaw pang sabihin ng BPI kung disapprove.

chief if i were you i'd go to metrobank na. ang ganda ng promo nila ngyon (ang alam ko until the end of sept ito) ang baba ng interest rate even lower than bpi. you just have to be ready to make a 30% dp kse yun ang minimum nila. at dahil may payroll account ka pala mas mababa ang maibibigay sayo.

[docchris]

go to the metrobank manager in your branch. bring with you the quote from bpi wherever and they will make it lower than that. and they offer that only to their depositors or clients. wala na kasi mga dealer interests and all..plus dun ka nakadeposit so madali malaman if approve ka or hindi because dun pumapasok pera mo e. sakin 20% nga lang....

also, contrary to what was mentioned sa thread, i think banks want lower downpayments more. kasi the bigger ang amount to loan or finance mo. and they want longer loans kasi mas malaki interest rates. thats actually how they earn money, from the interests from loans e....kung one year lang ang baba lang ng interest nun. unlike pag longer period...

[tawengo]

my suggestion:

apply kana sa metrobank kahit di mo pa alam status nung bpi application mo. wala naman problema if you will apply to more than 1 bank, kase application lang naman. ala ka pang pinirmahang papers from them.

if ever ma approve ka sa 2 or more banks, mamili ka nlang kung san mas magandang offer. then tell bank#1 that bank#2 gave you a lower interst rate-baka pwede nila habulin yung bigay ni bank#1.

try to inquire also sa psbank,epcibank, bdo..

[puroy]

*nels76: saang bpi branch ka nag-apply? ako kasi sa main branch, ok naman doon. I'm still undecided kung i-push ko na ba yung car loan ko or not. sigh

[nels76]

*nels76: saang bpi branch ka nag-apply? ako kasi sa main branch, ok naman doon. I'm still undecided kung i-push ko na ba yung car loan ko or not. sigh

Ung BPI Branch sa likod ng Enterprise Center.

mga bossing, salamat sa suggestion niyo.
I will apply na lang sa Metrobank.

Update pala: The BPI accont officer talked to my wife yesterday and sabi
kaya medyo alangan sila mag-approve is because wala pa daw kami garahe sa bahay. malaking factor ba talaga ung garahe? Wala pa nga kami but we will do it in a snap once the car arrives.

[docchris]

im not sure if its a big factor pero im thinking it has something to do with the insurance. mas safe kotse if nasa loob? dunno....nung ako client check ang napansin ko lagi tinatanong is if 1 or two storey house ganun...pero its better you have the garage ready kasi mhirap makipark sa iba or sa labas lang.

[Galactus]

I've been in the C&C ndustry for over 10 years, and having a garage as a pre-requisite for approval of a car loan is NOT a big factor. Pero I guess depende sa guidelines ng banko yan at ng approving officer.

Pag may garahe kasi, the car is protected from the elements and vandals, which may affect the depreciation of its value. Pwede rin safe from theft, but that is why you have insurance, so medyo covered ang banko

[devdevlin]

I've been in the C&C ndustry for over 10 years, and having a garage as a pre-requisite for approval of a car loan is NOT a big factor. Pero I guess depende sa guidelines ng banko yan at ng approving officer.

Pag may garahe kasi, the car is protected from the elements and vandals, which may affect the depreciation of its value. Pwede rin safe from theft, but that is why you have insurance, so medyo covered ang banko

chief anu-ano ba kinokonsider during CI para maaprove aside from capacity to pay the monthly amortization?

[randyrivera]

Bakit parang ang dami pang process para maka-apply ng car loan dun sa iba? Nagulat nga ako sa bilis ng approval nila e. Wala akong planong bumili ng kotse, kaso bigla kasi akong inapprove. Kaya tuloy, napabili ako ng di oras, hehe.

It all started out of nowhere, napadaan lang ako sa isang car dealer to kill time, tapos tinanong lang nung agent ang name ko, age, etc... tapos pinapirma na lang ako nung form. The following day a guy from Philam gave me a call then asked me a few questions. Medyo nahihiya pa nga siya dahil parang na-aabala daw niya ako. Anyway after 5 mins tapos na usapan namin.

The following day, my agent called me and told me that I can pick up the car na daw. Ha?? anong kotse? Namasyal lang ako dun kahapon, di naman ako bibili. The agent told me to bring the amount of the downpayment lang and a valid ID tapos i rerelease na ang car.

To cut the story short, so I went there and chose the color, took a look at it, kasi yun na yung actual unit. mas natagalan pa ako sa pag pirma ng sandamukal na papers (contracts, etc., etc.) kaysa sa pag apply ng loan. Given that this is my very first time to get a car loan. I don't even have a credit card where they can base my credit history. Wala din akong bahay under my name. All they did was just call me then na approve na agad ang loan.

I don't know how they based my approval, pero i'm glad that i went home with a new car in 2 days. Everything happened so fast, that my wife asked, "Did we just buy a new car?"

P.S. Ayun, may bonus pa, pinadalhan na rin ako ng credit card na di ko naman din inapplyan. Ano gagawin ko dun? Pambayad din sa car loan? hehe. Gusto yata nila akong pautangin ng pautangin.

[devdevlin]

Bakit parang ang dami pang process para maka-apply ng car loan dun sa iba? Nagulat nga ako sa bilis ng approval nila e. Wala akong planong bumili ng kotse, kaso bigla kasi akong inapprove. Kaya tuloy, napabili ako ng di oras, hehe.

It all started out of nowhere, napadaan lang ako sa isang car dealer to kill time, tapos tinanong lang nung agent ang name ko, age, etc... tapos pinapirma na lang ako nung form. The following day a guy from Philam gave me a call then asked me a few questions. Medyo nahihiya pa nga siya dahil parang na-aabala daw niya ako. Anyway after 5 mins tapos na usapan namin.

The following day, my agent called me and told me that I can pick up the car na daw. Ha?? anong kotse? Namasyal lang ako dun kahapon, di naman ako bibili. The agent told me to bring the amount of the downpayment lang and a valid ID tapos i rerelease na ang car.

To cut the story short, so I went there and chose the color, took a look at it, kasi yun na yung actual unit. mas natagalan pa ako sa pag pirma ng sandamukal na papers (contracts, etc., etc.) kaysa sa pag apply ng loan. Given that this is my very first time to get a car loan. I don't even have a credit card where they can base my credit history. Wala din akong bahay under my name. All they did was just call me then na approve na agad ang loan.

I don't know how they based my approval, pero i'm glad that i went home with a new car in 2 days. Everything happened so fast, that my wife asked, "Did we just buy a new car?"

P.S. Ayun, may bonus pa, pinadalhan na rin ako ng credit card na di ko naman din inapplyan. Ano gagawin ko dun? Pambayad din sa car loan? hehe. Gusto yata nila akong pautangin ng pautangin.

napaka-aggresive naman nto dealer na to, san ba to chief? DP lng binayaran mo? wla na insurance, chatel, at LTO? libre na ba ng dealer chief? i think you were just at the right place at the right time kaya nag-ka oto ka agad. not to mention you already had the money saved up for the DP. ano ba sasakyan to?

[nels76]

Update lang sa Car Loan na inaaplyan ko.

Nag-apply na ko sa Metrobank.
Yup may promo (low interest rate) sila and til Sept 30 2007 lang.

Pero this promo pala has some other requirements:
- Required DP is 30% of the car's retail value
- One Month Advance Payment (equal to the monthly amortization)
- 4 years to pay only.

Angbigat ng initial cash out. halos kalahating milyon kasama na ung Insurance, LTO, Chattel, etc.
Sabi ko puwede ba 20% lang DP and sabi nila papa-approve pa daw.

Now thinking if I really need a car.
Alterra pala target ko for long trips and space consideration.

[devdevlin]

Update lang sa Car Loan na inaaplyan ko.

Nag-apply na ko sa Metrobank.
Yup may promo (low interest rate) sila and til Sept 30 2007 lang.

Pero this promo pala has some other requirements:
- Required DP is 30% of the car's retail value
- One Month Advance Payment (equal to the monthly amortization)
- 4 years to pay only.

Angbigat ng initial cash out. halos kalahating milyon kasama na ung Insurance, LTO, Chattel, etc.
Sabi ko puwede ba 20% lang DP and sabi nila papa-approve pa daw.

Now thinking if I really need a car.
Alterra pala target ko for long trips and space consideration.

chief may exsisting savings account ka ba sa metro? pumayag cla sakin 5yrs (60months) to pay tska in arrears yun monthly amortization.

[nels76]

^^ Meron akong existing account sa Metrobank pero sa ibang branch. different from where I apply for an auto loan.

[puroy]

nels76: magkano interest rate ng metro per annum?