Car Loans in Taiwan Skid to 8-Year Low of NT$64.2 B. in January

Taipei, March 18, 2009 (CENS)--Reflecting the lukewarm car market in Taiwan due to the global downturn, January saw the new car loans extended by banks total NT$64.2 billion (US$1.95 billion at US$1 = NT$33), the lowest since 2002, according to the central bank.

The new car loans peaked at NT$143.1 billion (US$4.34 billion) in January 2006 and has been falling since, with such loans dropping monthly by 2%-3% last year. The Jan. figure is even less than half of that posted in January 2006.

Insiders said the shrinking car loans are mainly due to tightened credit at the banks. Currently private banks still offering car loans include Union Bank of Taiwan, Cota Commercial Bank, Taishin International Bank, and Far Eastern International Bank.

Taishin is most eager lender to car buyers, offering financing for not only new cars, but also second-hand ones, with the ceiling for new car loans at NT$2.5 million (US$75,757) and the lowest at NT$150,000 (US$4,545).

However, some banks offer car loans in the form of personal loans. Hua Nan Commercial Bank for example offers such personal loans at an interest rate of 3%-4% to civil servants or public school teachers, and 5%-6% to private sector employees, with the longest term being seven years.