How do I secure a loan to from the bank to buy a new car in Santo Domingo?

live_for_life

New member
Mar 4, 2007
344
4
0
If I do not have my car shipped from the USA to the Dominican Republic, I want to buy a new car in Santo Domingo. How hard is to get a car loan from lets say BancoReservas to buy a new car? I really do not care about having a car the first year I live in Santo Domingo permanently, but eventually I probaly will want a car to drive to areas away from Santo Domingo like Jarabacoa, Barahona, and Nagua. Caribe Tours is great deal money wise to get to places like Barahona, Jarabacoa, and Nagua. Not many Dominican pesos and interesting people on the bus to talk with. How much would the bank want down on lets says a new car for $18000 US dollars?
 

J D Sauser

Silver
Nov 20, 2004
2,940
390
83
www.hispanosuizainvest.com
Others may know more. But here is what I have come to understand so far.
Car loans run from 11% to over 20% interest. Especially in the last months, car dealers have complained about the fact the car loan interests have gone up closer to the 18% to 22% range (average). So, this may be the first turnoff.
Car dealers will offer to broker a loan for you. Unless you have a very good existing relationship with a major local bank, I hear this may be your only access.

For the best rates, I have been told again and again, that "ferias de carro" (car sales events held from town to town, just like a big circus), would be the ticket.
The numbers in these deals are quite obscure, similar to the ol' buy-here-pay-here junk yards in the States and "sales people" are not really trained to answer your finacial questions... it boils down to how much can you afford to pay per month.

Down payment? Go figger! I know of one woman, an architect, who's got a brand new car from Santo Domingo Motors for almost nada down and with a super preferencial 11% interest rate from one of the biggest banks here (her dad has good contacts there!)... after two years, she's almost done paying it off... but that would again show that she is quite a special girl.

... J-D.
 

neftali50

New member
Nov 11, 2008
22
0
0
How hard is to get a car loan from lets say BancoReservas to buy a new car?

I don't know how hard it is for people from another country to get a car here, but I don't think is very dificult, all you have to show the bank your passport, a letter from your job, most bank can finance you 80% of the total value of the car, 20% down, give you 60 moths to pay. Interest depend of the bank.

Here is a calculator link: Popularenlinea.com

For a car that cost 18,000 the bank can ask you $3600 for the down payment (20%).

For more info (in English) go here: Popularenlinea.com

Banco Popular has a Car dealer Show in december, so you can go and check if you find a good deal there.
 

bob saunders

Platinum
Jan 1, 2002
32,504
5,932
113
dr1.com
If I do not have my car shipped from the USA to the Dominican Republic, I want to buy a new car in Santo Domingo. How hard is to get a car loan from lets say BancoReservas to buy a new car? I really do not care about having a car the first year I live in Santo Domingo permanently, but eventually I probaly will want a car to drive to areas away from Santo Domingo like Jarabacoa, Barahona, and Nagua. Caribe Tours is great deal money wise to get to places like Barahona, Jarabacoa, and Nagua. Not many Dominican pesos and interesting people on the bus to talk with. How much would the bank want down on lets says a new car for $18000 US dollars?

Caribe tours is $375 Pesos from Santo Domingo to Jarabacoa. If that's a lot of money for you how to you expect to buy a car, plus insurance and gas, maintenance....etc.
 

Sanation

New member
May 21, 2007
273
20
0
Speaking to Dominicans, car loans are very expensive in this country. The rates are variable and do fluctuate. My Dominican assistant was telling me last week that a few months ago her car repayments were RD$4,000 per month and now they are RD$6,000 per month. Pretty scary on a local wage.

We have a friend who approves loans for one of the major Dominican banks and he was telling us recently that most of the loans being approved have interest rates starting at 38%.
 

neftali50

New member
Nov 11, 2008
22
0
0
That's true Sanation, this is not a good time for taking loans from any Bank. Interest rates are under sky. I'm working in a local Bank in Santo Domingo and let me tell you that the last year a car loan was at 11%, in this year the interest rates change dramatically. So if you don't have enouht money I recommend better save it until rates goes down again, or have the option to buy a used cheaper car.
 

mountainannie

Platinum
Dec 11, 2003
16,350
1,358
113
elizabetheames.blogspot.com
BUS is always cheaper

Caribe tours is $375 Pesos from Santo Domingo to Jarabacoa. If that's a lot of money for you how to you expect to buy a car, plus insurance and gas, maintenance....etc.

Traveling by bus and guagua is always going to be cheaper, better for the environment and probably more fun.... the only problem that I have had is that often you can?t find rental cars in the destinations -- like in Dajabon or Pedernales.....
 

live_for_life

New member
Mar 4, 2007
344
4
0
Caribe tours is $375 Pesos from Santo Domingo to Jarabacoa. If that's a lot of money for you how to you expect to buy a car, plus insurance and gas, maintenance....etc.

I meant to type the following: Caribe Tours is not a great amount of pesos to get to places like Barahona, Jarabacoa, and Nagua from Santo Domingo. Sorry, for that typo. I type too fast sometimes.
 

Mason3000

Active member
Aug 2, 2008
363
46
28
Something tells me if you wait 12 mos and walk onto a car lot here with nothing more than a YMCA card and the first month's payment you'll walk away with a ride.

Just my .02
 
Feb 7, 2007
8,005
625
113
Two days ago I saw the placard with interest rates at Banco Leon. Car Loans are 25% and mortgages 24%. "Nice"!
 
Feb 7, 2007
8,005
625
113
If you have an internationally-issued credit card (USA, Canada, Europe) you are better off using that card, or taking a personal loan in your home country, regardless how exorbitant the interest rate would be there. It still would be less than the rate in the DR. Loan sharks there will be happy, and you will be happy as well. A true win-win situation.
 

Castellamonte

Bronze
Mar 3, 2005
1,764
50
48
Cabrera
www.villa-castellamonte.com
Be careful with a bank car loan as the "do fluctuate." In the US when you receive a loan the interest rate is locked in at the time of the contract execution. In the DR the interest rate is not locked in.

I have a friend who purchased a car with a loan from Banco Leon. The interest was 11% at the time of the contract execution. The loan interest rate today is 29%! The bank will adjust the interest rate, and your required payments, based on the interest rates prevailing in the country (driven by the Central Bank).

So be very careful on a loan. You could end up paying for that car two or three times what a cash deal would have been.
 

Mason3000

Active member
Aug 2, 2008
363
46
28
"Traveling by bus and guagua is always going to be cheaper, better for the environment"

Cheaper yes, better for the environment?....have you seen the stuff that comes out of the back of gua-guas and buses here? lol
 

Mason3000

Active member
Aug 2, 2008
363
46
28
What about financing direct with the car lot? I see ads offering to finance direct asking 50% down and I have friends saying they put virtually nothing down, just walked off the lot paying the monthly. I'm thinking to buy two vehicles for $20,000 total. I plan to walk in drop $10k down and walk away with two vehicles + two monthly payments (24 months) of about $300 a piece. Am I crazy or is that do-able?
 
Feb 7, 2007
8,005
625
113
The financing rates went way up. The lots financed at 3.5% per month when banks charged 1.25% per month.

Now that banks charge 2.05% per month... the lots... go figure

Now, suppose the lots charge "only" 4.5% per month.

If your total is US$ 20,000 and you put US$ 10,000 down,
your monthly payments will be:

Capital financed: US$10,000 total
Interest charged: US$ 10,000 x 4.5% x 24 = US$ 10,800
Total: US$ 20,800
Monthly payment: US$ 20,800 / 24 = US$ 866 total
Per car monthly: US$ 867 / 2 = US$ 433.5
which is @ 35 exchange rate: US$ RD$ 15,172 per month

I used the methodology and formula car lots use to finance the cars - which means you actually pay interest on already-paid principal (capital) for the whole duration of the financing. But that's the way car lots finance here.

Your last month payment has an effective interest rate of 108% per month
( ... calculation :
US$867 / US$ 416.7 = 2.08 = 108%
where:
US$ 867 being the total monthly payment ; and
US$ 413 being the monthly capital payment : US$10000/24 ;

... Your last month when you pay, only US$413 is effectively left of your capital payment to pay, but your monthly payment - "pagare" - is US$ 867 total - which leaves over US$ 450 to be an interest payment ;
...
Where US$ 450 interest on US$ 413 capital is effective interest rate of 108% per month [1296% p.a.] ;
...)

Nowadays is not a good time to finance anything. And much less via car lots.
Car lots financing should be your last resort.
 
  • Like
Reactions: Celt202

Ceasar Garcia

New member
Oct 1, 2008
127
8
0
If it was me I would pay cash for a good used Toyota. The only car to buy here. You can get parts anywhere and fixed anywhere too. I working on my third car here. I brought my Suburban from the states in 1991. Will never go through the CUSTOMS Hassle again. Shop around. A good Toyota is going to cost your around 8-12 thousand U.S. Take it to a good mech. I have one. Have him go over it with a fine tooth comb. Just pay cash. If you import be sure to check how much the tax and plate are going to cost you before shipping make sure you get it in writting and certified.
Buy a used car here much better.
 
Feb 7, 2007
8,005
625
113
Well, he IS asking about buying a car here... he is asking about a loan, interest rate and monthly payments, not about whether to import or buy in the DR.
 

Ceasar Garcia

New member
Oct 1, 2008
127
8
0
He states " if I do not have my car shipped from the U.S. " so to me that means he is thinking about shipping his car. Don't you people ever read what is posted before you comment ? Plus all I was doing was offering him an option which he may not have thought about. As bad as the roads are here and the way people drive who would ever buy a NEW car that will be junk in one year. Makes no sense to me.
 
Feb 7, 2007
8,005
625
113
You are replying to a different post than I am. Because threads can branch out a bit, when they stay within the topic asked it's permitted, it's a good idea to include - quote - the information you are replying to.

You were replying to the OP, while I was replying to Mason 3000 in a sequential order (no quoting necessary, as I was replying straight after his post).
 

Ceasar Garcia

New member
Oct 1, 2008
127
8
0
Sorry, but, besides the loan he needs to know that a new car he will also have to pay 16 % Itbis on. I still would buy used.