Susan Gordon, Business Reporter

Jamaica Money Market Brokers Limited (JMMB) has delved into the unconventional and is now offering car loans at rates which could be classified as the second best or lowest on the market.

The investment house, which, up to the start of November, was offering loans on account at a maximum of 18 per cent pay-back, told its customers that the new offering was in line with its 15th anniversary reached on Tuesday, November 6.

The product offering started on that day.

The size of the capital pool from which JMMB will begin to offer this product is not clear, but it is very likely that the company would pull from its own reserves.

Its retained profits at the end of March 2007 stood at $6.3 billion.

Checks by Sunday Business revealed that interest rates on car loans range from 17 per cent to 22.5 per cent from the traditional institutions which offer the facility, namely banks and credit unions.

low rate of 17.75 per cent

JMMB quotes an interest rate on its new car loans at 17.75 per cent, matching the lowest rate in the market offered by the University of the West Indies (UWI) Credit Union and falling 20 basis points below RBTT's.

Sunday Business was unable to get a comment from the marketing department at JMMB on the design of the product or expectations, but was informed by its clients care centre that the money market broker would lend 90 per cent of the cost of a brand new vehicle, using the same as collateral.

Borrowers have a maximum of seven years to repay.

The limit on the year vehicle for which it will lend is seven years, where a two-year maximum period is offered to pay back the loan. Only half of the cost of the vehicle will be loaned.

For a two-year old vehicle, the maximum pay-back period is four years on 75 per cent of the vehicle's cost.

For a three-year old vehicle, JMMB will finance 70 per cent of the cost, to be repaid in three years.

susan.gordon@gleanerjm.com