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

2 October 2015 12:50 pm

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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Video by Danushka