BANKS are introducing attractive car loan packages to lure Filipinos into buying their dream cars amid the implementation of the Tax Reform for Acceleration and Inclusion (Train) Law this year.
Dennis Fronda, division head for BPI Family Auto Loan, said loan packages remain affordable despite the added taxes due to the Train law.
“While prices of some cars have gone up, the take-home pay of an employee has gone up as well. With affordable auto loan packages, the client still has more than enough to cover the monthly amortization and other car expenses,” he said.
Under the Train Law, the tax rate of brand new vehicles worth P600,000 and below would be raised to four percent; those costing between P600,000 and P1 million, 10 percent; those priced between P1 million and P4 million, 20 percent; and those worth more than P4 million, 50 percent.
It, however, gives tax exemptions for pickups and electric vehicles. Hybrid vehicles will also be taxed at half rates versus non-hybrid vehicles.
To cope with the temporary contraction of brand new car sales due to the new tax system, Fronda said the banks are thinking of new ways to entice Filipinos to buy cars.
Fronda was in Cebu to open BPI Auto Madness sales event in the activity area of the Ayala Center Cebu. The event runs from March 15 to 18, 2018.
Among the offers they are giving out are lower interest rates, free one-year comprehensive insurance, free gas card up to P3,000 and faster approval time.
BPI, according to Fronda, holds the Auto Madness event in Cebu at least twice a year, which is a reflection of the bank’s confidence in the province’s economy and strong purchasing power.
“The market in Cebu for cars is rapidly growing. We see this in the expansion of car dealerships and display centers outside Cebu City. The growing population of Cebu and even urban migration also contribute to the high demand for cars. Some change cars every five years or less to avoid high maintenance cost of older cars,” said Rey Eleccion, area business director for BPI Family Savings Bank-Visayas.
Fronda said they observed increased car buying last year, as Filipinos took advantage of the old tax rates. They expect a contraction in car sales in the first few months this year, which will eventually will be stable come May or June.
“The impact of Train will be temporary, as consumers and manufacturers adjust to the changes but this will normalize when we reach the first half.” (KOC)