The Car Financing Schemes of Selected Banks and Car Dealers in Metro Manila

Abstract

The main purpose of the study is to assess the competitiveness of the car financing schemes offered by selected banks and car dealers in Metro Manila. The descriptive research design was employed and a researcher-developed survey questionnaire was used to gather data. The gathered data were statistically treated using the frequency distribution and percentage, weighted mean, ranking method and the analysis of variance. The four hundred respondents, who’s sample size was determined using the Slovin’s formula and chosen by random and snowball sampling, were composed of car loan availees from different banks and car dealers in Metro Manila. The study revealed that the car financing schemes of selected banks and car dealers were competitive in terms of application process, interest rate provisions, payment terms and conditions and discount and freebies. However, the study noted several significant differences on the respondents’ assessment. Their assessments vary depending on the respondents’ age, gross monthly income and length of employment or business existence. Further, the number and type of car acquired through financing also influence how respondents assess the car financing schemes of the selected banks and car dealers. The researcher recommended that banks and car dealers must offer car financing schemes that provides low down payment with longer payment period to accommodate lower monthly payments, must not require their customers to surrender post-dated checks (PDCs) as means of monthly payment and must allow customers to defer monthly payments up to the first five months of the payment period.