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red_devil
Joined: 30 Jun 2008
Location: Korea
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 Posted: Wed Oct 20, 2010 10:02 pm Post subject: Buying a NEW Car |
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| Has anyone done this? Anyone gotten a loan from Hyundai Capital or something for this? I'm also wondering about typical down payments. I was thinking more like 10% down but was told that Koreans put a lot more down. More like 25-30% down. I wonder why they'd do that if they still need to get a 36month loan...less interest for sure but interest rates aren't super high here. I also heard if you do a lease you don't have to get your own insurance or registration. |
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IS-F
Joined: 20 Oct 2009
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| Posted: Wed Oct 20, 2010 11:33 pm Post subject: Re: Buying a NEW Car |
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| red_devil wrote: |
| Has anyone done this? Anyone gotten a loan from Hyundai Capital or something for this? I'm also wondering about typical down payments. I was thinking more like 10% down but was told that Koreans put a lot more down. More like 25-30% down. I wonder why they'd do that if they still need to get a 36month loan...less interest for sure but interest rates aren't super high here. I also heard if you do a lease you don't have to get your own insurance or registration. |
From what I understand, it's impossible/very difficult to get a financing loan for a car unless you have a Korean co-signer. I'm on an F-4 visa and was considering it (having my uncle co-sign) but it wasn't worth it so I just paid in cash. The interest rates on loans are not all that great neither (compared to back home that is).
Leases are uncommon here compared to N. America. They do have programs where you can pay a smaller amount every month for x number of years and then pay a lump sum at the end which does sound like a 'lease'. You can then refinance the lump sum amount again when the time comes but again, the rates are ridiculous.
Most people don't lease regular cars like K5, SM5, Sonata and instead finance or purchase them outright. Leases are more common for luxury cars or for companies who need fleets for their upper management.
With regards to down payment, it depends on the make. I know most foreign car makers require a minimum down payment but one of my coworkers financed a new i30 with zero down and pays around 350,000 KRW per month for 4 years. He's Korean though.
Also from what I understand, the down payment doesn't reduce the interest rate, although of course it will reduce the amount of the monthly payments. The number of years you plan to finance will though (less years, less interest). |
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GreenlightmeansGO
Joined: 11 Dec 2006
Location: Daegu
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| Posted: Wed Oct 20, 2010 11:42 pm Post subject: |
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| I've always just thought of paying for a new car in cash...but it would make sense in Korea to just pay it off (if it's the same as other things, where you don't end up paying much or any extra). |
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red_devil
Joined: 30 Jun 2008
Location: Korea
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| Posted: Sun Nov 07, 2010 11:45 pm Post subject: |
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Just an update on this :
After talking with several different dealers the general policy on all foreigners (any one not with Korean citizenship) is that there is a 13.7% interest rate on all foreign cars and yes you do need a Korean co-signor regardless of how high your position is or how much money you make. The 할부 is not the same as when you purchase something at a department store. For car dealerships it is still a car loan, they pay the full price to the car manufacturer like Audi Financial and then charge you interest on 36 months or whatever.
If you're on a F4 hopefully they iron out the details on the dual citizenship thing sometime soon. I wonder if this 13.7% interest rate will change when EU-Korea FTA and US-Korea FTA policies go into effect. From what i read they've cut down considerably on tariffs and import taxes... |
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DHC
Joined: 15 Jan 2003
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| Posted: Mon Nov 08, 2010 2:07 pm Post subject: |
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| Interest rates are very high in Korea. It is better to purchase in cash. Don't know about F-4 visa holders but an F-5 by law is entitled to purchase by credit. This year, I bought a new Daewoo. I could have bought it on credit but my wife and I decided to use cash, which entitles you to a discount. |
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red_devil
Joined: 30 Jun 2008
Location: Korea
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| Posted: Mon Nov 08, 2010 5:11 pm Post subject: |
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| DHC wrote: |
| Interest rates are very high in Korea. It is better to purchase in cash. Don't know about F-4 visa holders but an F-5 by law is entitled to purchase by credit. This year, I bought a new Daewoo. I could have bought it on credit but my wife and I decided to use cash, which entitles you to a discount. |
I think with domestic cars you still get a tax refund, also most of them are much cheaper than buying an import like a Beemer. |
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