How to Buy a Car in the Philippines

We've been going on and on about cars --- how they’re made, how fast they go, how much fuel they consume, etc, etc. Recently, we realized we’ve missed out on something: how to buy a car in the Philippines. I think many will consider getting a brand new car to be among the shopping highlights of a lifetime. After all, it’s not very often that one rings up a purchase that runs at least six figures. It’s a big move and major decision-making is involved. And if you think it’s as simple as what the low down payment/low monthly amortization ads say, think again. To get this story together, I recalled my own experiences as a car buyer, had a chat with Art - a rally driver moonlighting as an auto loan officer, and tagged along with C!’s Editorial Director, Carl Cunanan as he picked up his spanking new Sante Fe from the Hyundai Global City Hub.

Financing your Car

“After you’ve decided on the vehicle that is best suited for your needs, then we can start processing your papers”, Jeffrey Bernaldez, In-House Sales Consultant explains. With talk of recession all around, I figured it would be safe to assume that the majority of potential car buyers will be opting for financing. Terms of payment range from 1 year (12 mos) to 5 years (60 mos). Needless to say, the longer period you go for, the higher the interest you shoulder. For convenience, financing through your dealer is recommended but you must note that interest rates vary and if you can get a sweeter deal by going through your bank, making extra trips and having an additional person or two to transact with might just be worth the hassle. “Initial cash outlay involves the downpayment, the compulsory 3-year LTO registration, comprehensive insurance, and chattel mortgage (loan contract) fee”, enumerates Bernaldez. The LTO registration fee will depend on the plate-ending that you choose. Yes, you may dictate that detail. However, while you are waiting for your license plate, your number-coding day will depend on the last number of your conduction sticker. Fear not the no-plate-no-travel rule. Just wave your sales invoice to the traffic enforcers to prove that your car is less than a week old and you’re free to drive your plate-less car. But chances are, you won’t be getting your license plate within a week. What to do? Pinoys have not been described as resourceful for nothing. Wink.

Getting a loan approval

“To get your loan approval moving, the basic documents required are bank statements, an income tax return, and business registration or employment certificate”, Bernaldez further rattles off. A credit investigation will also be conducted to be sure you are deserving of the loan. It’s not very enjoyable being grilled about money matters but it’s part of the drill so you have to grin and bear it as they throw questions your way. “The bank evaluates your ‘character’ which refers to your capacity to pay. Your income is assessed, they look at the industry you work in, check your place of residence, and verify your credit history”, reveals Art. Past credit problems would be stumbling blocks. You can receive approval for your loan in as fast as half a day though sometimes the waiting extends to three days. Downpayment can be in cash or Manager’s/Cashier’s check. Personal checks are acceptable too but that would mean three more days of waiting for clearance. For your monthly amortization, you are either required to issue post-dated checks or have a bank account where they can automatically debit your dues. “You must ensure funding for your monthly obligation otherwise the bank can file a case against you and force you to surrender the unit”, warns Art. We don’t really want to go there, do we? “While your car is under mortgage, you are required prompt yearly submission of comprehensive insurance documents otherwise your bank will take the liberty of securing insurance for you”, adds Art. Charged to you, naturally. Once the financial documents are in place and the Purchase Order has landed in the right hands, the dealership can prep your car for release. If the unit of your choice is available and you have a knack for nagging, you can be driving it home in as quickly as a few hours. “The movement of your release papers depends on our load and we don’t turn over a unit until we’ve done our own pre-delivery inspection so that may take time”, discloses Bernaldez.  Another walk-around the car is done as the keys are handed over to the client. “Everything is based on a standard checklist to make sure nothing is missed”, shares Bernaldez. Tedious as it may seem, going through the checklist with your sales rep is a step that should not be skipped at any cost. You have to make sure that you received everything they claim to have given you. This is also the perfect opportunity to verify if the seals and caps are tight, the fluid levels are where they should be, and that the lights and fuses are working. Allow your sales guy to demonstrate adjustments and brief you on the functions of each button.  You don’t want to have to whip out the manual upon entering the mall parking lot to find out how to pop the trunk or worse, end up with a scandalous car alarm that you have no idea how to turn off.

Figure out the equipment

At this stage it’s important to contain your excitement and focus on the task on hand. Ask questions, no matter how petty you think they may be. Where are the tools? Where is my spare tire (I didn’t know I had one until after a year!)? Is my spare tire susceptible to theft? Was the car recently waxed? Even if you’re dying to get behind the wheel and get your new baby rolling, get a hold of yourself and keep your ears open as they discuss the warranty, the service booklet and manual.  These few minutes can make a world of a difference. Find out if there are special measures you have to observe while the car is new. Can you open the windows or should you allow the tint to dry? What is the procedure for break-in? They break-in the engine at the factory but it’s different when you’re running the car with passengers and having everything working together for a longer stretch. And last but not least, don’t leave without getting a snapshot of you boarding your new car.  It may take awhile before that moment happens again. I would understand though if you would opt to edit the giant key. Originally posted in C! Magazine    September 2009 Edition Words by Jude Morte