THE Jamaica Used Car Dealers Association (JUCDA) has signed a deal with Scotiabank Jamaica, that will give its customers access to car loans carry interest rates of 15.95 per cent for the rest of this month, after which a rate of 16.95 per cent will be offered up to October.

JUCDA president Ian Lyn, disclosed details of the deal yesterday, only days after National Commercial Bank (NCB) announced that it would reduce interest rates on motor vehicle loans to 16.95 per cent, down three percentage points from the previous rates.

“We signed a contract with Scotiabank Jamaica. It is a partnership deal that is the first of its kind in the used car business and the first of its kind in Jamaica,” Lyn told the Business Observer. “It is an exclusive deal between the Jamaica Used Car Dealers Association and Scotiabank.”

Lyn said the deal will see member dealers and customers of Scotiabank getting the 15.95 per cent loan on both new and used vehicles up to the end of February, and 16.95 per cent from March to October 2010.

Additionally, the customers will get $10,000 towards the purchase of gasoline, 100 per cent financing on a vehicle tracking system from Century Security and the offer of a Scotiabank Mastercard credit card with a minimum of $100,000. Member dealers will also receive $5000 for each referral made to Scotiabank.

“Scotiabank is also offering 100 per cent financing on the 15.95 per cent interest rate even after February 28 if that particular customer has good credit with them and is a good credit risk,” Lyn added.

“I am ecstatic. It’s a good turn of fortune for us. Most importantly is the equality between new and used cars,” Lyn said of the deal that he says he anticipates will result in an eight per cent increase in income to the car dealers with the first two months, and 21 per cent improvement over the duration of the deal.

“We are lowering our prices too,” Lyn told the Business Observer. The price reduction has not yet been finalised, but he says the dealers are “looking at the million-dollar mark right now”.

The deal is available at all 101 member dealers, located across the island. With the reduction in the interest rates on motor vehicle loans, in effect, consumers can anticipate the cost of purchasing a motor vehicle being reduced significantly. Lyn says this would be even better if the government ‘came to party’.

“This will be a complete package for consumers and blue collar workers if the Government would stop cat-footing around on the five-year plan that we have been waiting on,” Lyn said.

He is speaking to the request the JUCDA made for the government to allow the importation of used cars up to four years and 11 months old. Currently, only cars three years old and under can be imported to Jamaica, a fact which Lyn says places the cost of a car out of the reach of many middle income earners. If the request is granted, then 2005 model cars will be allowed within the country.

A 2005 model Toyota Corolla has a Cost Insurance Freight (CIF) of US$3,500 to US$4,000, which means that the car could be sold within the $1 million range. With the reduced interest rates the car would be more affordable to the average Jamaican.

“The banks are showing us that they are ready to do business, let us hope that the Government is ready to do business also,” Lyn said.

Lyn commends the effort made by Scotiabank, which he says will have representatives at all the Used Car Dealers throughout the duration of the contract to ensure that the process for accessing the loans go smoothly. The deal expires October 31 this year, but he says he is confident it will be renewed at the end of the period given the prospects of a turnaround in the market.

Last year there was a 65 per cent decline in the business for used cars. Forty-one dealerships closed as a result of the downturn and contraction in demand.