Govt. fiddles with leasing ratios to put off three-wheeler, small car purchases

The loan-to-value ratios (LTV) of vehicle financing stipulated in the 2017 budget will go ahead as planned after the Central Bank advised the banks and financial companies to follow the Finance Ministry regulations.
A Finance Ministry communiqué said that the 25 percent LTV ratio for three-wheelers, 50 percent LTV for motorcars and vans and a 90 percent LTV for commercial vehicles would go ahead as proposed in the budget.
However, it said that following lobbying from a group of businessmen from the tourism industry, the vehicles leased for tourist transportation would not be subjected to an LTV limit.
Currently, a 70 percent LTV ratio is in effect, with an aspiring vehicle owner needing to only make an initial down payment worth 30 percent of the value of the vehicle being purchased. The Finance Ministry said that the LTV ratio on three-wheelers was proposed in the budget after academics presented research that found that three-wheelers need to be regulated.

Currently there are over one million three-wheelers registered in Sri Lanka, which academics opine is three times the requirement for Sri Lanka.