Provisions on Down Payments for the Financing of Motor Vehicles Reregulated

In pursuit of its ultimate aim of boosting growth within the financing-company industries, as well as maintaining a healthy level of economic stability, the Financial Services Authority (Otoritas Jasa Keuangan/”OJK”) has relaxed provisions concerning minimum down payments for the purchase of motor vehicles. This policy has been set under OJK Circular Letter No. 47/SEOJK.05/2016 on Down Payments Required for the Financing of Motor Vehicles by Finance Companies (“Circular Letter 47/2016”).
 
Through the issuance of Circular Letter 47/2016, the OJK has now lowered the mandatory down-payment amounts for motor-vehicle ownership which must be settled by customers as a requirement for them being able to access financing facilities offered by conventional financing companies. Furthermore, Circular Letter 47/2016 also introduces an exemption from the minimum down-payment requirements for financing companies that enter into car-ownership programs.
 
Prior to the issuance of Circular Letter 47/2016, these matters were regulated under OJK Circular Letter No. 19/SEOJK.05/2015 (“Circular Letter 19/2015”).
 
New Down-Payment Amounts
 
The new down-payment amounts set out in Circular Letter 47/2016 are different for each financing company, based on their Non-Performing Financing (“NPF”) ratios[1], as well as on the types of motor vehicle concerned (two-, three- or four-wheeled vehicles) and the purpose of ownership (commercial or non-commercial). Note that any administrative fees or other additional costs, such as insurance or notary fees, are not to be taken into account when calculating any minimum down payments.[2]
 
Details of the new down payments are detailed below: