Turning cars into cash

Need quick cash? If you are a car owner, look no further. An increasingly popular breed of lending offers the best both worlds _ allowing you to put up your vehicle as collateral for a cash loan, and keep driving it.The car equity loan lets the borrower continue using the mortgaged vehicle. This differs from pawned assets, which are kept by a pawnshop until their redemption.The similarity is that the loan is aimed at assisting people who have assets but are in urgent need of money.Car owners can use a vehicle registration book as collateral with creditors, get an amount of money (up to 70-80% of the car's present value) and repay it over a negotiated period, between 12 and 72 months. The payoff includes the principal and interest.The flat interest rate may vary depending on the creditor, repayment ability of the borrower, type of vehicle, vehicle age and usage purposes.A low interest rate of 3.5% to 4.0% may be charged on newer cars (one to three years old) with a short instalment period of not more than 36 months. Higher interest is required for older cars, as well as lengthier terms: 60 or even 72 months.Although car title loans have been offered by loan brokers for a long time, their popularity has been increasing in recentyears among commercial, heightening market competition and allowing consumers easier access to loans.Normally approvals are made within three days of applicationThe impressive growth is in line with rising car salesBased on the Land Transport Department's statistics, 28.48 million vehicles were registered in Thailand as of 2010, and the Bank of Thailand estimated 4.8 million were fully paid up.
This year, car sales are expected to reach 900,000 units, along with 2 million motorcycles, bringing total auto loans to as high as 334 billion baht.
For refinancing and used-car loans, the market size is as large as 210 billion baht, of which 60 billion baht is for motorcycles.
Choosri Patcharoen, the executive vice-president for marketing at Ayudhya Capital Auto Lease Plc, also known as Krungsri Autocountry's auto refinancing loans this year would expand 10% and car equity loans up to 30%. of 137 billion baht at the end of June, a 30% rise year-on-year. Of the loans, 30 billion baht was from the Krungsri car-for-cash business, which expanded 23%.The performance gave the company, which pioneered the business among commercial banks eight years ago, a leading 40% market share.As well, new players in recent years have expanded the market. Among the leadingengaged in the businessThe interest rate is low when compared with other credit types and no credit guarantor is needed, Ms Choosri noted.new-car hire-purchase loans are expected to reach 3% by the end of the year. charges 2.65% interest a year for new-car loans and a minimum of 3.75% for used carsbank is offering a rate of 3.6%, or 0.30% a month, in its car-for-cash segment.