Comparison-shopping site sees steady interest in car loans after TRAIN

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MONEYGURU Philippines Corp., which operates financial comparison website MoneyMax.ph, said interest in car loans remained steady after the implementation of the tax reform law, driven by aggressive discounting and lower-end vehicles which are now taxed more lightly.

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MoneyMax.ph managing director Moritz Gastl said that the firm, which also offers auto insurance, did not experience a decrease in its car loan applications following the imposition of higher excise taxes on automobiles with the enactment of the Tax Reform on Acceleration and Inclusion (TRAIN) Law.

“Since [the implementation of tax reform], volume has been stable, comparable with the beginning of last year. We haven’t actually seen it going down,” Mr. Gastl told reporters in a roundtable discussion in Makati City on Wednesday.

Signed into law by President Rodrigo R. Duterte in December, TRAIN took effect at the start of the year.

Mr. Gastl explained that the financial technology firm saw stable car loan applications following the tax reforms since its customers “realized that [cars are] actually not more expensive.”

“Because of the new tax, we [saw] a lot of dealerships giving a lot more discounts. Some of the cars were even cheaper now than they were before the TRAIN came.”

He added that MoneyMax.ph offers loans and insurance targeted largely at the low end of the car market.

“The bulk of the cars we’re insuring or giving loans to, I would say, are lower-end cars,” Mr. Gastl said, adding that some of the cars are to be enrolled in ride-hailing services such as Grab.

According to the website of the Department of Finance, cars worth P600,000 and below carry a 3% average effective tax rate under the new tax system, whereas vehicles worth P4 million and above carry an average rate of 30%.

The steadiness of apparent demand for car loans, Mr. Gastl added, contrasts with a spike in applications prior to the TRAIN Law.

According to a joint report from the Chamber of Automotive Manufacturers of the Philippines, Inc. and Truck Manufacturers Association last month, sales of automobiles fell 3.2% year-on-year to 26,176 units in February .

With the higher excise tax, vehicle sales in January have started to display signs of weakness, growing at a slower 4% pace following a spike in December when sales surged 33.4% before the new taxes took effect.

MoneyMax.ph is an online platform which lets its users to compare financial and telecommunication products such as insurance, loans, credit cards and broadband plans.

In July, it secured $50 million in funding from investors such as the World Bank’s International Finance Corp. and Alibaba Entrepreneurs Fund.

Established in 2014, MoneyMax.ph is part of the CompareAsiaGroup which operates financial comparison websites in Hong Kong, Indonesia, Malaysia, Philippines, Singapore, Taiwan and Thailand. — Karl Angelo N. Vidal