Peta-Gaye Clacher/Staff Photographer
Audrey Tugwell-Henry (left), senior VP, retail and electronic banking at BNS, 'lymes' with Karen Tomlinson, director, retail banking, during the Scotia Wheels Dealers Awards and Cocktails at the Bank of Nova Scotia Training Centre on Thursday.

John Myers Jr., Business Reporter

Scotiabank Jamaica is reporting a buoyant car-loan programme under its Scotia Wheels promotion, which targets new auto buyers.

On Thursday, Scotiabank's vice-president of retail and electronic banking, Audrey Tugwell-Henry, indicated that the bank was now looking to tap a larger share of the used-car sector, saying it was now considering more attractive loan terms for that target segment.

Subscribers to its used-car loans now pay 23.75 per cent, which is over five percentage points more than new-car buyers, whose loans are priced at 18.125 per cent.

And they only get 70 to 80 per cent financing and five years to repay, compared to 100 per cent for Scotia Wheels and six years. The vehicle must be no older than five years.

Scotiabank introduced the new-car loan scheme in 2005. Formerly, subscribers were allowed about 90 per cent financing but the bank went to full financing of the purchase price in February in the face of emerging competition from the likes of National Commercial Bank.

"The Scotia Wheels programme has been going extremely well for us," said Tugwell-Henry.

Tugwell-Henry did not say when the used-car plan would take effect, but noted that the bank was constantly looking at ways to improve and grow its business.

In fact, while Scotiabank boasts the largest loan portfolio of all five commercial banks, at $58.6 billion at the end of October 2006, its loan growth has slowed considerably.

Its year-on-year growth in 2006 was only 2.2 per cent, compared to 9.3 per cent in 2005.

Despite the competition, however, Tugwell-Henry says Scotiabank would not be reducing interest rates any lower at this time.

In the meantime, new-car dealers at a Scotiabank reception Thursday said the loan offerings for new vehicles were impacting positively on new-car sales.

"More and more people are seeing it as practical to buy a new vehicle," says Andrew Campbell, marketing executive at Motor Sales and Service, local dealers for Mitsubishi and Dodge.

Olive McNaughton, the marketing and sales manager at Euro Star Motors - dealers for Mercedes-Benz - said the terms on auto loans have stimulated sales because the monthly repayments are more affordable now.

Euro Star's clients, who are among the more affluent, have the option of investing their cash, and borrowing to acquire a new vehicle.

Scotiabank gave awards to its partner dealers, including the Issa Transport Group, Stewart Motors, new partner Fidelity Motors, Motor Sales and Service and Kingston Industrial Garage, for the level of business that has flowed to the bank under the new-car loan programme.

john.myers@gleanerjm.com