New method of calculating interest on the hire-purchase of car or motorcycle
The Committee on Contracts of the Office of the Consumer Protection Board recently issued a new notification regarding hire-purchase contracts for cars or motorcycles, effective on 10 January 2023.
Keywords: Mazars, Thailand, Legal, Consumer Protection Board, Interest rate
10 November 2022
When calculating interest on such contracts, a flat interest rate can no longer be used. Instead, interest will be calculated based on the amount of principal remaining after each instalment (“Effective Interest rate”). Effective interest rates will also be capped, as follows:
- No more than 10% per annum for a new car;
- No more than 15% per annum for a used car; and
- No more than 23% per annum for a motorcycle.
The Committee on Contracts has the right to adjust maximum interest rates every 3 years based on economic conditions in the country.
Reference: Government Gazette (in Thai) dated 22 September 2022
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