With the market hitting rock bottom, second-hand car dealerships are turning to sales with promissory notes due to high vehicle loan interest rates. In order to easily provide loans to customers with bad credit records, dealerships are cooperating with factoring companies and are looking for ways to create movement in the market.
Fast Credit Opportunity for Those with Bad Credit Records
Dealers who are trying to sell their vehicles on digital platforms are working with factoring companies as well as contracted banks. Credit is provided through factoring companies to customers who cannot get a bank loan but want to own a vehicle. Dealers are trying to increase their sales with promises such as “30-minute credit opportunity for our customers with bad credit records.”
Difference Between Credit and Promissory Note
While interest rates for bank vehicle loans generally start at 3.90 percent, the interest rate for credit opportunities offered by dealerships can be around 4.20 percent. In sales with promissory notes, this rate can go up to 5.30 percent. In addition, additional payments of up to 20 thousand liras may be requested under the name of file fee in sales with promissory notes.
Sample Payment Plans
| Loan Amount | Maturity | Total Refund |
|---|---|---|
| 400,000 TL | 12 months | 600,000 TL |
| 400,000 TL | 24 Months | 829,000 TL |
| 400,000 TL | 36 Months | 1,092,000 TL |
Market Situation
In the first 6 months of this year, 4.8 million second-hand vehicles were sold, compared to 5.7 million the previous year. This shows that the market has shrunk by approximately 15%. On the other hand, the gap between new and second-hand vehicle prices has widened. Second-hand vehicle prices have fallen by approximately 30% since the beginning of this year, while the average age of cars is over 10 years.
