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Out of 10 deals that we do, up to 7 transactions require some form of financing for the purchase. Depending on the individual’s credit and the loan amount required, some customers prefer taking an in-house loan which is more flexible in terms of their lending criteria as compared to the banks.
Doing a quick google search, you will be able to see banks offering an interest rate of between 1.98% – 2.98% (as of 9th April 2020) depending on the promotions (if any) for their hire purchase loan. To be frank, we would prefer to apply for a bank loan (Maybank, DBS, OCBC) for customers, because our partner banks tend to offer a better referral commission. With strict and clear operational SOPs in place, they tend to approve loans or at least return a counter-offer much quicker. Even though an in house loan is flexible, and does not appear on your credit bureau report (CBR). In comparison, the commissions given by in-house finance are far lesser when compared to banks. Most customers who opt for an inhouse financing, do so because of relatively poor credit history. They will often expect to produce additional documentations like payslips and bank statements. In some cases, guarantors might be required for the approval of the loan. Your guarantors will be responsible for the monthly repayment should the applicant lapse in payment. When credit companies assess a loan, they look at the REAL car value (how much can the car really fetch in the market if it’s repossessed) and your ability to pay the loan (the usual benchmark is that your monthly loan repayment should be about 30% of your monthly salary). If you have shopped enough, you will realize that the interest rate is about 3.28% -6.98% with an additional loan processing fee. In this trade, we often hear the comment “huh so high?! Why so high?!”. The brutal truth here is that inhouse-finance companies tend to take unsavoury customers that banks reject. The high interest rates and processing fees are meant to cover the additional risks that they have to undertake. The token referral fee is just a token sum to dealers and we sincerely prefer applying a 1.98% – 2.98% bank loan for you.
otua. Auto is a consignment agent; We help direct owners like yourself to find a direct buyer. We have transacted more than 500 cars to date, you can also check our reviews and photos on our Facebook page (https://www.facebook.com/pg/otuasg/reviews). This will allow us to fetch a higher price for your vehicle. How? Without a middleman dealer to take profit, we able to pass on the $3,000 to $5,000 worth of profits back to owners like you! Our main profit comes from the referral commissions that banks/inhouse finance companies and insurance companies pay us. In a nutshell, you can also see us as auto finance brokers who help you sell your car for free 🙂 With the market slowing down, why not use this time to advertise with us? We will connect you with another buyer as soon we can!
Click here to start: https://www.otua.sg/sell-car
Wash your hands, stay at home and be safe everyone!
The team at otua.