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The story
Kenji (a pseudonym), 45, manages an electronics retail store and lives with his wife and their junior-high-school-age son. He earns roughly ¥6 million a year and pays ¥120,000 a month on his mortgage. A news article making the rounds on 5ch described how he ended up signing for a ¥6 million Toyota Alphard: a standard auto loan would have cost him about ¥110,000 a month, but he was talked into a “residual value credit” (zan-kure) plan that brought it down to ¥70,000 a month instead. The thread was split — some asked whether he’d actually thought through the balloon payment waiting at the end of the contract, others argued that residual-value credit is really just “renting” the car rather than a genuine loan, and some said they understood the impulse to buy a car beyond your means just to keep up appearances.
Kenji (pseudonym, 45) manages an electronics retail store. He currently lives with his wife and his junior-high-school-age son. His annual income is about ¥6 million and he has roughly ¥4 million in savings, but he’s paying down a ¥120,000-a-month mortgage.
But once he added the trim level and options he wanted, the car’s price came to about ¥6 million. Kenji’s monthly take-home pay is around ¥400,000, out of which ¥120,000 goes to the mortgage. Taking out a standard auto loan would have meant monthly payments of roughly ¥110,000.
“With this plan, your monthly payment comes to about ¥70,000.”
Source: news.yahoo.co.jp / Original article here
What people said
That's quite the trap lol
You can refinance it
No idea what the interest rate is though
Bro's basically nobility wwwwwwwwwwwwwwww
That mindset really isn't rare, I don't think
Apparently some people feel ashamed if their car ranks below their friends' or acquaintances'
Though the interest rate's probably brutal
And surely he signed the contract after being told upfront this is exactly how it'd play out, right?
What was his actual plan here?
You take out a new loan against the residual value
As long as you don't return the car, you're not obligated to restore it to original condition
So just drive it into the ground until the residual value's nearly gone,
then buy it outright
Toyotas hold resale value even once they're basically immobile anyway
they come up with all sorts of excuses to steer you toward residual-value credit, don't they?
What the, that's a dirty trick
I think it's the same everywhere
Well, this was back when cars were in short supply
but I was told residual-credit orders take 6 months while regular financing orders take a year and a half
Yeah, it's a rough financial product, I'll give you that
but honestly, if you can't wrap your head around that going in, you probably shouldn't be borrowing money at all
But that only adds up to ¥6.6 million
Everyone buying Toyotas is the real problem
Sell it for cash and that's the end of the relationship
Put the customer on residual-value credit and the interest keeps trickling in
Which customer do you think they'd rather sell to?
Everyone gives you a wide berth (rental cars in Japan carry a distinctive "wa" plate, and other drivers tend to keep their distance)
so I was torn between financing the remaining ¥1.5 million, or scraping together money I really didn't want to touch to just pay the full ¥4.5 million outright
and the salesman kept pushing hard for me to go with residual-value credit first and pay it off from that money instead
A lease is just a rental
Background and Points of Debate
Residual-value credit (“zan-kure”) is a financing scheme that calculates monthly payments after subtracting an estimated future trade-in value (the “residual”) several years down the line — functionally, it sits somewhere between a standard loan and a lease. The monthly payments look lighter, but interest keeps accruing on that residual portion too, so to keep driving the car you eventually need to refinance or settle the balance in one lump sum, meaning the total cost tends to balloon past what a regular loan would cost. Commenters on the thread pointed out that “you can’t just pay off the residual with a normal loan” and that “you can refinance it, but nobody knows what the rate will be” — the full mechanics of the plan are easy to miss from the sales pitch alone, which sets buyers up for misunderstandings. Some also noted that since the chip shortage, certain dealers have prioritized residual-value contracts because they’re more profitable, leaving customers who want a standard loan waiting far longer for delivery — suggesting vanity isn’t the whole story here.
*This article is excerpted and summarized from the 5ch (Hello! Project board) thread “Kenji and his wife weep with regret over their residual-credit Alphard.”
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