More Young People Can't Keep up with Import Car Payments

      September 15, 2015 11:07

      Many young people are canceling their lease contracts for snazzy foreign cars despite hefty termination fees as they find themselves unable to keep up with payments.

      According to data submitted to Saenuri Party lawmaker Park Dae-dong by the Financial Services Commission, people in their 20s and 30s paid W208.2 billion in fees over the last five years for canceling their car leases before maturity (US$1=W1,183). That accounts for 45 percent of all lease cancellation fees paid by drivers of imported cars.

      Car leasing companies usually charge around 10 percent of the remaining lease amount as cancellation fees.

      The lease cancellation rate among people in their 20s for domestic cars stands at just 2.7 percent, but it soars to 8.3 percent for imports. This suggests an increasing number have stars in their eyes but face a rude awakening.

      Park said, "Due to lax supervision by authorities, excessive fees are being charged and customers are being misled. We need to ensure that customers are fully informed of the consequences of lease cancellations before they make a decision."

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