Zero Percent Down Payment on Car, Minister: Still Being Studied

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  • TEMPO.CO, Jakarta - The Minister of Transportation (Menhub) Budi Karya Sumadi said that he is still studying the regulation for car and motorcycle loan with a down payment of Rp0 percent. “I am still studying it,” he said at the Damri Anniversary event, in Kemayoran, Monday, November 26.

    Budi Karya said there had been no meeting with the Financial Services Authority (OJK) regarding the regulation. However, Director General of Land Transportation of the Ministry of Transportation, Budi Setiyadi, said that the regulation is feared to increase congestion in the roads due to the increasing number of vehicles.

    Earlier, the Chairman of the OJK Board of Commissioner Wimboh Santoso ensured that the revised regulation would still require financial institution such as the Bank, which conducts strict selection before disbursing the loan for the purchase of car and motorcycle.

    In addition, there will a number of other regulations set by OJK on the credit or financing channeling institution. Among them is that the institution must have a level of non-performing finance or NPF equal to or below 1 percent and healthy financial statements. To note, currently, the vehicle down payment ranges from 10 to 25 percent from the purchase price.

    When asked about the impact of the regulation, Wimboh replied, “That’s another thing. If the infrastructure, LRT, MRT are good, people would not want to ride the motorcycle anymore,” he said.

    The Chairman of the Indonesian Financing Companies Association Kelwandi Wiratno positively welcomed OJK's plan to decrease the motor vehicle down payment by zero percent. Even so, he was not sure all companies would give the program.