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Number of bank repossessed cars rises in Vietnam due to COVID-19 pandemic

Number of bank repossessed cars rises in Vietnam due to COVID-19 pandemic

Monday, July 20, 2020, 10:02 GMT+7
Number of bank repossessed cars rises in Vietnam due to COVID-19 pandemic
Buyers check out cars for sale in Ho Chi Minh City. Photo: Cong Trung / Tuoi Tre

The number of bank repossessed cars has increased sharply in Vietnam in the past few months as many people have failed to pay their auto loans due to the novel coronavirus disease (COVID-19) epidemic.

Many banks in the Southeast Asian country have been selling a large number of repossessed automobiles over the past two months.

Among them, the Vietnam International Bank (VIB) are selling 59 autos, including various types of cars, trucks, and buses.

A SAMCO limousine is being offered at VND890 million (US$38,380), while a 16-seater Ford Transit is on sale for VND434 million ($18,700).

Tien Phong Bank (TPBank) has been selling a lot of automobiles since the beginning of July.

These vehicles are assets repossessed from the lenders’ clients who had repeatedly defaulted on their debt obligations.

Local lenders told Tuoi Tre (Youth) newspaper that the rapid increase in the number of repossessed vehicles, especially those used for passenger transport services, results from financial difficulties caused by the COVID-19 pandemic.

Danh, a resident in Tan Binh District, Ho Chi Minh City, said he previously borrowed VND800 million ($34,500) from a joint stock bank to buy a 16-seater bus, which he would use for his passenger transport service.

He was required to pay VND15 million ($646) every month as part of the loan agreement, but his transport service came to a grinding halt following the COVID-19 breakout.

The man was in heavy debt and thus his vehicle was repossessed by the bank.

According to Tran Ngoc Tam, director of Nam A Bank, the lender has decided to provide borrowers with restructured loans to help them overcome this difficult period.

However, as the entire economy suffered a hard punch from the COVID-19 pandemic, local banks are not likely to offer all of their borrowers a restructured loan.

This led to several incidents in which borrowers accused local lenders of using ‘tricks’ to repossess their vehicles.

Meanwhile, representatives of these banks asserted that they have legitimate rights to repossess the automobiles if clients fail to comply with their obligations stated in their agreements.

According to insiders, buyers of bank repossessed cars are mainly used-car dealers as they clearly understand procedures and how the vehicles are priced.

Regular car buyers would hesitate to purchase repossessed vehicles as they are now fully aware of the process.

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