1st-time car-loan defaults soaring

Loan defaults are soaring among first-time car buyers, leaving the Excise Department with the task of tracking down deadbeats to recover 100,000-baht tax refunds paid to them under the prior government’s populist tax scheme.

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So far in 2014, 511 first-time buyers sold or had their vehicles repossessed, violating a requirement of the tax-refund program that buyers keep their cars and trucks for at least five years. Only 20 people got rid of their vehicles in all of last year, said Somchai Pulsawas, the department's director-general.

Mr Somchai said an increasing number of people are defaulting on loans, forcing leasing companies to seize their cars. The department, he said, is coordinating with lessors to monitor the situation.

To date, the department has voided tax credits to 12,820 first-time car buyers, forcing them to repay the refund. All but 21 have done so with the Comptroller Generals' Department taking legal action against them.

In all, 1.25 million people took advantage of the tax scheme, costing the government 91.5 billion baht. So far, 77.8 billion baht has been paid to 1.1 million people. Another billion baht will be paid out through September.

About 114,000 people, or 9.2% of applicants, didn't receive tax refunds because they never took delivery of a vehicle.

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