Forum: Car loan situation worsened by lucrative commissions to salesmen
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I refer to the letter “Review car loan rules to prevent financial woes and safety issues” (Sept 17).
The car loan situation is exacerbated by the lucrative commissions offered by banks to car dealers. I was told that it can be as much as 5 per cent of the loan quantum.
It is no wonder that some car salesmen push hard for buyers to stretch the loan amounts.
Indicative car prices advertised can come with hidden prerequisites of a mandatory car loan of a certain quantum and loan period.
If a buyer wishes to buy a car without taking a loan, the car price can be jacked up quite significantly, likely to cover the commission a car salesman could have earned if a loan had been taken.
We should have laws that mandate car dealers to advertise, visibly in bold print, the exact car prices, regardless of cash purchase or loan.
We also need laws to stop banks offering such high commissions.
The authorities need to close the loopholes and come down hard on recalcitrant car dealers.
Ong Kok Lam
