Popular Auto Fair kicks off with rates as low as 7.25%

[Dolores]

There is practically no place to park a car, and traffic jams turn a five-minute trip into a 45-minute one. Yet, the banks keep on diverting their surplus cash into financing more cars. The borrowers for vehicles are given access to the lowest interest rates available for any kind of loan, much much less than financing available for productive sectors. The vehicle serves as the collateral. The low-interest financing of vehicles sends thousands of vehicles to city streets, worsening the traffic jams.

Banco Popular has announced that the 29th edition of the Popular Auto Fair will offer fixed interest rates as low as 7.75% for six months; 11.95% for 12 months; 12.75% for two years; 13.95% for three years; and 14.95% for five years. Special financing options will also be available for used vehicles.

This year’s auto fair will continue to incentivize the purchase of hybrid and...

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[josh2203]

Haven't thought of it this way before, but BPD is obviously a private company, so they would do anything legal that brings in cash, that's their business. What I don't understand is that there are people willing to not only pay for an over-priced new vehicle (in the DR), but also willing to pay those interest rates just to have a new car.

It's even better for the bank if the poor car purchaser first pays a ton of money for their car and then suddenly miss payments. The bank gets the asset back and gets to keep the money, right?

My dad always taught me (I appreciate many people do this, but just how I was taught) never to even think of purchasing a brand new car due to the incredible depreciation rate on the first years. After a couple of years it's fine, but never purchase new... You basically lose a significant amount of the value, and if your financing it, you're basically paying to the bank to own very expensive air...

 

[drstock]

I'm afraid you don't think like a Dominican, josh2203. The way the average Dominican sees it you have the chance to be seen driving around in a brand new car and with any luck you will find a way to make ongoing payments.

 

[CristoRey]

We are on track to be just like Puero Rico, an island (the rightside) which has more cars than people.
This administration is constantly making news by expanding public transportation infrastructure yet can't stop a leaky faucet (or the overflow of new cars into the country)
SMH...

 

[josh2203]

I'm afraid you don't think like a Dominican, josh2203. The way the average Dominican sees it you have the chance to be seen driving around in a brand new car and with any luck you will find a way to make ongoing payments.

I'm aware of this of course. Unfortunately though, I have never, even in the DR, known a person who would think like this... I know many people do though... All the better for the banks... Like I implied, obviously these fairs would not exist if there was no demand...

 

[Manuel01]

Haven't thought of it this way before, but BPD is obviously a private company, so they would do anything legal that brings in cash, that's their business. What I don't understand is that there are people willing to not only pay for an over-priced new vehicle (in the DR), but also willing to pay those interest rates just to have a new car.

It's even better for the bank if the poor car purchaser first pays a ton of money for their car and then suddenly miss payments. The bank gets the asset back and gets to keep the money, right?

My dad always taught me (I appreciate many people do this, but just how I was taught) never to even think of purchasing a brand new car due to the incredible depreciation rate on the first years. After a couple of years it's fine, but never purchase new... You basically lose a significant amount of the value, and if your financing it, you're basically paying to the bank to own very expensive air...

A Friend of mine does "REPO" for Popular and he is extremely busy. The biggest favor you can do to this banks is ; Not paying your Loan on time.
They never loose. After 20% Down payment and mandatory Full Cover Insurance (btw, from the same Bank), everybody manages to pay for a few month and than the party begins. In addition to the already astronomical high interest rate, they ad late and legal fees for a few month before finally taking the car away. This is their Business Model. They know that at least half of their approved loans can't be paid back. A financed middle class Car is around 50 - 60K of monthly payments.

 

[josh2203]

A Friend of mine does "REPO" for Popular and he is extremely busy. The biggest favor you can do to this banks is ; Not paying your Loan on time.
They never loose. After 20% Down payment and mandatory Full Cover Insurance (btw, from the same Bank), everybody manages to pay for a few month and than the party begins. In addition to the already astronomical high interest rate, they ad late and legal fees for a few month before finally taking the car away. This is their Business Model. They know that at least half of their approved loans can't be paid back. A financed middle class Car is around 50 - 60K of monthly payments.

Thanks very much for the insight. You pretty much confirmed all my thoughts, although the monthly payments of 50-60k are even higher than I though... Even our very high offered mortgage in the DR would not have had that high payments.... Just insane...

 

[Manuel01]

We are on track to be just like Puero Rico, an island (the rightside) which has more cars than people.
This administration is constantly making news by expanding public transportation infrastructure yet can't stop a leaky faucet (or the overflow of new cars into the country)
SMH...

They could double the price of Gas and still would not be able to remove even one single vehicle from the road. Dominican man are obsessed with Cars. Give me 1$ for every Dominican that cant send his Child to a 20k/month private school but pays 60k/month for a Car payment and i never have to work again a single day of my life !

 

[NanSanPedro]

A Friend of mine does "REPO" for Popular and he is extremely busy. The biggest favor you can do to this banks is ; Not paying your Loan on time.
They never loose. After 20% Down payment and mandatory Full Cover Insurance (btw, from the same Bank), everybody manages to pay for a few month and than the party begins. In addition to the already astronomical high interest rate, they ad late and legal fees for a few month before finally taking the car away. This is their Business Model. They know that at least half of their approved loans can't be paid back. A financed middle class Car is around 50 - 60K of monthly payments.

I believe you but that's not the business model we had in the USA. Repos were a pain in the ass. No bank or finance company wanted to do that. Generally, the cars repo'd were pieces of shit and the bank/finance company took a loss. on them.

This observation goes back to the late 70s/early 80s when I worked in finance (BC, before college).

 

[Manuel01]

I believe you but that's not the business model we had in the USA. Repos were a pain in the ass. No bank or finance company wanted to do that. Generally, the cars repo'd were pieces of shit and the bank/finance company took a loss. on them.

This observation goes back to the late 70s/early 80s when I worked in finance (BC, before college).

Here it's different. Cars are usually REPOD within the first year. Client already paid 20% in the beginning and made several payments + Late, legal and repo fees.
Also Dominicans take care of their cars ! Weekly Carwash and Detailing is in their DNA. Again; The Banks never loose !

 

[NanSanPedro]

Here it's different. Cars are usually REPOD within the first year. Client already paid 20% in the beginning and made several payments + Late, legal and repo fees.
Also Dominicans take care of their cars ! Weekly Carwash and Detailing is in their DNA. Again; The Banks never loose !

Ok so let's take that further.

Jose buys a new car, pays the fees, down payment and pays monthly for a year. Then he spends all his money on lottery tickets and Sra Jose's nails and can't make payments so the bank repos the car.

Do we then start all over with a one year old car? Angel buys the one year old car from the bank thinking he got a deal...same shit different year and he loses the car in a year...

This could go on for 5 or 10 years with the same car!

 

[Manuel01]

Ok so let's take that further.

Jose buys a new car, pays the fees, down payment and pays monthly for a year. Then he spends all his money on lottery tickets and Sra Jose's nails and can't make payments so the bank repos the car.

Do we then start all over with a one year old car? Angel buys the one year old car from the bank thinking he got a deal...same shit different year and he loses the car in a year...

This could go on for 5 or 10 years with the same car!

Exactly !!! Just for the used Car, "Angel" has to make a 25% Down payment ! LOL

 

[DrNoob]

So technically speaking, if there was a way to buy these repo-ed cars without financing, that should work out for the buyer (like an expat) but one would not know how to go about approaching the bank OR the agency that deals with repo & resale for them.

I was told that 'Dominicans are taught to have multiple businesses instead of being a wage slave' and my rebuttal that everyone doing the same hustle of renting out cars, selling stuff from garages is not 'multiple businesses' was not well received. I say this because this was told to me buy a person who was renting out two cars and had payments to make and they were pretty close to going under during the low season. If there was an accident or breakdown, they had no plan. Some Dominican way of thinking. SMH.

 

[Manuel01]

So technically speaking, if there was a way to buy these repo-ed cars without financing, that should work out for the buyer (like an expat) but one would not know how to go about approaching the bank OR the agency that deals with repo & resale for them.

I was told that 'Dominicans are taught to have multiple businesses instead of being a wage slave' and my rebuttal that everyone doing the same hustle of renting out cars, selling stuff from garages is not 'multiple businesses' was not well received. I say this because this was told to me buy a person who was renting out two cars and had payments to make and they were pretty close to going under during the low season. If there was an accident or breakdown, they had no plan. Some Dominican way of thinking. SMH.

You will never get these cars. The Banks are selling them to their "Buddy Dealers" and they Resale them with financing from (who would guess) the very same Bank.

 

[JD Jones]

You will never get these cars. The Banks are selling them to their "Buddy Dealers" and they Resale them with financing from (who would guess) the very same Bank.

The path of least resistance.

 

[bob saunders]

I bought my Subaru during one of these bank promotions several years ago. Mine was 8.5 percent for two years.

 

[Fulano2]

I'm afraid you don't think like a Dominican, josh2203. The way the average Dominican sees it you have the chance to be seen driving around in a brand new car and with any luck you will find a way to make ongoing payments.

When you show up with a “new” car the first things a Dominican asks is how old it is and how much did you pay.

 

[johne]

I understand the process as far as depreciation after purchase of a new car. But what I don't get is how a dealer prices a new car that is two model years old. For example how will a dealer in Jan 2025 price a Nissan, Chevy,etc that is new on the showroom floor ? It seem he doesn't depreciate just gives the price a trim but not a haircut.

 

[josh2203]

We are on track to be just like Puero Rico, an island (the rightside) which has more cars than people.
This administration is constantly making news by expanding public transportation infrastructure yet can't stop a leaky faucet (or the overflow of new cars into the country)
SMH...

I think it's more than a leaky faucet, as the govt itself has they own ferias via Banreservas. Unless they are willing to fix themselves, nothing much will happen... It's really a paradox...

 

[Notengo]

I understand the process as far as depreciation after purchase of a new car. But what I don't get is how a dealer prices a new car that is two model years old. For example how will a dealer in Jan 2025 price a Nissan, Chevy,etc that is new on the showroom floor ? It seem he doesn't depreciate just gives the price a trim but not a haircut.

I think the depreciation is mostly in (first) use/ownership. A 2 year old car with no use/ownership on the showroom floor is considered technically new.
Also in the DR depreciation doesn’t look to be that much, maybe it’s demand and inflation. Even much older cars are still overly expensive, some people buy a car and sell it for the same price a few years later.