What are the terms often used in used car loan simulations? This time we will discuss the terms that we have encountered in a used car loan simulation.
Terms in Used Car Loan Simulation
- Do you intend to buy a used car or second car in the near future?
- Have you thought about, cash payments or using credit?
Before doing a used car loan simulation, you need to understand some terms that often appear when you used car loan simulation. Here is the explanation
Price of On The Road (OTR)
Price on the road (OTR) is the purchase price of a car plus all vehicle taxes and various documents (vehicle registration and BPKB). So the price on the road is the price of a car to be used.
Price of Off The Road
The Off The Road price is the price of buying a car, not including the document. So you have to pay extra to take care of all vehicle taxes and various documents .
Tenor or Period of Loan
The tenor or loan period is how long the loan period is determined in units of months or years. Generally the tenor of used car loans is shorter (shorter) than the tenor of new car loans.
Down payment (DP) is a fee that must be paid in advance as a sign of being a vehicle purchase. Usually a down payment for a used car loan or a new car loan is 25% – 30% of the price of the car.
Credit ceiling is the amount of debt that must be paid by the debtor (people who apply for credit). Credit ceiling is calculated by means of the purchase price of a vehicle minus the DP of a car. Debt interest is calculated from the credit ceiling, not from the selling price of the car.
Insurance Policy and Premiums
Insurance policies and premiums are contracts or agreements related to vehicle protection. This agreement is made between you (the vehicle buyer) and the insurance company. You need to pay an administrative fee to arrange an insurance policy. This fee is only paid once when you register. Insurance premiums are fees that should be paid annually as a liability for insurance participants. Vehicle insurance companies usually offer two types of vehicle insurance namely all risk and total lost only.
Comprehensive or All Risk Comprehensive
Comprehensive or all risk insurance is vehicle insurance that provides protection against all types of damage (written in the policy). The premium amount is determined in percentage, which is around 1.5-3% of the OTR price of your car. The price will be updated annually.
Total Loss Only
Total lost insurance is vehicle insurance which guarantees total loss if it is due to theft or heavy damage. The definition of heavy damage is damage to a vehicle due to an accident with a total damage of more than 70%. TLO insurance costs are cheaper than all risk insurance, approximately 1% of the OTR price per year.
Administrative costs are costs that should be incurred by the buyer to take care of car loans. This fee is paid only once, when you take care of credit.
Fiduciary according to the Big Indonesian Dictionary means that:
fidusia / fi · du · sia / delegation of authority to process money from the owner of the money to the delegated party.
The cost of fiduciary guarantee is the cost of taking care of the debt agreement which states that the vehicle (car or motorbike) that is being submitted for credit is owned by the debtor (the person who submitted the credit) legally. Although in reality the BPKB vehicle was used as collateral.
Based on the Regulation of the Minister of Finance (PMK) No. 130 / PMK 010/2012 concerning Fiduciary Registration: requires leasing companies to register a fiduciary guarantee no later than 30 days after the credit agreement was signed.
Generally fiduciary fees will be charged at the beginning and at the end of the credit agreement. The amount of fiduciary fee is adjusted to the price of the vehicle, starting from Rp. 25,000 to Rp. 100,000.
Have you calculated the vehicle costs before buying a car?