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Video: Loan-to-value ratio on vehicles increased to 90%

2 October 2015 12:50 pm - 5     - {{hitsCtrl.values.hits}}

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The loan-to-value ratio on vehicle imports has been increased to 90 per cent from Monday, October 5 from the earlier 70 per cent, Finance Minister Ravi Karunanayake said today.

“Too many vehicles are on the roads and we’re being criticised, but it’s an individual freedom,” the minister said.

The artificially created low-interest regime had allowed financial companies to provide 100 per cent lease financing on motor vehicle imports until the Central Bank intervened in September.

The minister said customers must deposit 90% of the value of the vehicle in a non-interest bearing and non-refundable account when opening a letter of credit so as to prevent excessive ad-hoc buying which usually takes place before a budget.  (Chandeepa Wettasinghe)

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  • Praba Friday, 02 October 2015 06:22 PM

    adhoc, visionless, government, this.

    Sapu Friday, 02 October 2015 06:41 PM

    We should increase taxes on vehicle imports and improve public transport

    Sapu Friday, 02 October 2015 06:42 PM

    We should reduce the loan-to-value ration again, people get loans and buy vehicles and end up unable to payback

    Observer Saturday, 03 October 2015 08:24 AM

    The government is making a mistake by increasing the limit from 70% to 90%. This is not a case of individual freedom. If anybody has money or can take a bank loan they have the freedom to buy any vehicle they want. But on the leasing side many people who are not in a position to afford are tempted to buy a vehicle on finance expecting to pay back from its earnings. When they fail to pay back their vehicle is ceased and they their loss is only 10%. This is the reason for so many three wheelers are on the road making it a nightmare for other drivers. Most of these three wheelers are parked at parking slots near shops, super markets most of the time inconveniencing the other shoppers. At the end of the day they get involved in nefarious activities to find money to pay the finance company,Government should re-think of the 90% again taking into account the clogging on the roads, the foreign exchange drain better discipline on roads.

    ashen Saturday, 03 October 2015 04:30 PM

    people must have a freedom to buy any vehicle they like. government should not restrict that.


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