0% H-P Interest Comes to Malaysia
Following the September 11 tragedy in the US which led to consumer confidence faltering, the US car companies introduced 0% interest on vehicle financing in an effort to boost sales. The move seemed to work as consumers were drawn by such a good deal which would save them a fair amount of money. Of course, for the car companies, absorbing the interest impacted on their profits but it was vital that they moved their stocks which threatened to pile up to dangerous levels.
In Malaysia, though such financing incentives were not introduced during that period, vehicle sales remained strong and even rose, much to the surprise of analysts who had forecast a drop. Nevertheless, as a contingency measure, some companies still formulated marketing strategies which gave buyers very good deals by requiring lower downpayments and extra-low interest rates.
2002 is expected to still see growth in sales, perhaps not as dramatic as in 2001, but some companies believe that attractive incentives are still necessary. One of them is Auto Bavaria which recently went the “0% interest” route as a follow-up to the two highly successful innovative financing plans introduced last year.
For a 3-year loan, a buyer of a new 325i from Auto Bavaria will not have to pay any interest at all. That means savings of up to RM25,000 on a maximum loan of RM185,000 and an annual interest rate of 4.5% (the 325i costs RM250,698.55, excluding insurance).
Customers who opt for a longer loan period can still enjoy substantial savings with interest rates that are well below the current market rates. For example, a 4-year loan for the same model now comes with just 1.5% interest p.a. while a 7-year loan carries 3% interest p.a., compared to the current market rate of about 4.5% per annum.
“We believe that our target market still has substantial purchasing power. All they need is an incentive and we are now putting before them an offer that is too good to refuse,” said Auto Bavaria general manager for sales and marketing, Tunku Badlishah bin Tunku Annuar.He stressed that the underlying objective of the aggressive strategy is to allow a greater proportion of car enthusiasts the opportunity to own highly desirable BMW products.
“With a 7-year loan of RM185,000 at 3% interest per annum, the monthly repayment comes up to a very affordable RM2,665,” he added.
This special promotion from Auto Bavaria, which is offered in collaboration with Sime Diamond Credit Sdn Bhd, is subject to stock availability.
Meanwhile, Perodua has also decided to ‘sweeten’ the deal for buyers of its Kelisa GX by offering 0% interest for the first year of the loan. According to a Perodua salesman, a customer buying this version of the Kelisa can save a maximum of RM1,500 on a 5-year loan with a 15% downpayment. The offer, which is available from any of the 13 finance companies on Perodua’s panel, is valid till April 30 2002.
