Evening star., 1928-05-27
PARTIAL PAYMENTS
AID FOREIGN SALES
Development of Installment
Method Abroad Held Boon
to u. S. Auto Firms.
BY WILLIAM ]. wKEATLEY.

BY WILLIAM ]. WHEATLEY.
Ii The development of the instsllment
method Of selling automobiles in Europe
lies the great opportunity for placing
American cars III the possession oi
these people, who. like Americans, are
craving. the advantages Of modern
transportation, but have not the flnan-
cial standing 20 provide the original
purchase price in full. However. the
practice is increasing there according
t. a survey recently completed by the
Autonotive Division Of the United
States Department of Commerce. but i;
was indicated that the practice has not
yet reached the high state of develop
ment which has been attained In the
United States.
During the year 1928 retail sales OF
American cars furnished 90 per cent OF
the total sold. II was pointed out also
that Of the $4,000 cars sold during 1927
II II European countries approximately
a. per cent were sold on the INSTALL
ment purchase plan. which compares
1avorab,y with Ga per cent of passenger
cars sold on the deferred payment plan
;n the United States. The increase OF
%94 per cent in American exports to
Europe in 1919 undoubtedly is attribu-
table largely to the adaptation there of
the lnstallnent selling plan, according
to the Commerce Department experts.
System Shows Growth.
In Southeastern Europe the install
ulent selling system has been in opera
ton only during the past two or three
years: IN Greece it rose TO Importance
zrs ~ ~
k3a it has only developed during the
past two years, but in most other CONT
mental countries and the United King
Gom its growth has been coincident in
some measure with that in the United
States.
Finland. Poland and Rumania lead
IN the percentage Of motor vehicles sold
on the deferred payment plan, each
with 80 10 90 per cent. Greece with
50 per cent Of cars, 95 per cent of trucks
and 100 per cent Of buses and taxiS:
Denmark with so to IS per cent of all
types; Germany with rs per cent Of
cars ard 100 per cent of commercial
vehicles. Austria, France, Italy. the
Netherlands Sweden and Czechoslo-
rakia al have so TO rs per cent Of cars
and even larger percentages Of COM
raarciai vehicles sold on the installment
plan. The percentage for the United
Kingdom is so per cent for cars. rs per
cent for taxis, so per cent for trucks
and 20 per cent for buses; for Belgium
50 per cent for cars, so per cent for
trucks. buses and taXis. Spain is re-
ported 10 be the only country that has
not 10 any great extent taken advantage
q the more convenient installment pur-
chase method; only IS per cent Of its
vehicles are sold on time
That the i.1stallment selling system
II Europe, as well as in America. is
sound and vital factor in automobile
merchandising Is demonstrated in fig
Lres showing TepoSSesSions which can
E2fely be estimated at not more than
par cent. The great number naturally
occur in the taxi field, where the credit
period Is longer, where the down pay
E1ent IS smaller, and where usually the
sz1s-zl llments arc , i'd out Of the earn
gs Of tl1e operator. The smallest re-
possessions occur in the passenger car
classification, which accounts for the
greater number Of motor vehicle sales,
4nd proves somewhat the point that
ence family has obtained a car its
r1enbers viii do everything possible to
Keep il.
Down Payment Terms.
The NEST liberal terms In the matter
cf down payment are accorded the pur-
.eI1aser in the United Kingdom, Ger
n1snv. the Netherlands. Spain and
S switzerland, where it usually amounts
70 3ne-fourih for all types of vehicles.
- Austria, Belgium. Czechoslovakia.
Denmark. France. Greece and Italy the
EoT'l payments vary from one-fourth
% cne-third Of the purchase price: in
Turkey from 10 TO so per cent: in Fin
land and Sweden they average one
third, and IN Poland 10 per cent. Ru-
rama IS reported 70 be the least lib
.tral. exacsing usually an initial pay
.raent Of about one-half the purchase
price
r Finland, Germany and Sweden a
credit period Of 10 months is common
FOR all types Of vehicles. the survey
SHOWS. The period ia the United King
dom is commonly 10 months for cars
and trucks, u for buSSes and "a for
<aos. IL Denmark. France and Greece
5lz1 time usually Is II 70 10 months for
seagS. Greece, II 20 15 months for
trucks and busses and Ia 70 "a months
FOR cabs: Denmark, u months for trucks
and 70 3 years for buses and tayis.
a period averaging II monthS-in ex-
eeptAonal cases 10 Enonths-fog all types
81 vehicles Is extended III Austria, BEL
gum, Czechoslovakia. Italy. the Meth
fTlands and Switzerland. In Turkey the
period ranges frern TO Is months for
European cars and TO 8 months usu-
ally for American cars Dealers In
Spain. Poland and Run7ansa are said
q be the least liberal In the length Of
tfe.T anstsiiEnent period. Spain as q rule
granting 10 II months. Poland 6 10 9
months and Rumania 3 70 6 months.
The report says that interest only is
f5le usual finance charge IN three cou.l-
frieS--Austria. Italy and Rumaniz. The
interest Is usually figured separately for
each inSt2llnent, the monthly interest
Enarge decreasing as each fngtallment
= PAID. TIE charges in Runanla are
usually IS 70 "a per cent monthly, IN
Austria IL ~ ~ Der cent and in Italy
n 20 Q per cent.
f. fat charge is customary in nine
countries. II Is usually q percentage Of
the total amount outstanding after the
Gown payment. and Is often divided and
scced 70 Ibe monthly instaliments.
( EnstaiiTnent Rates.
Purchasers IN the United Kingdom
s1d the Netherlands pay probably lh..
loWest fat approximately S 10 2
PEI cent, IN Switzerland. Denmark and
Sweden TIC charge varies from g W q
per cent. Belgium reports q usual
charge IL 9 per cent and Germany Q
per cent. Czeehsiokayia rates, varying
from ~ " II per cent. are among the
l3gbe8t charged ia all u Europe
combination fat rate and interest
ere customary IN FINLAND. Poland and
Spain r. tie iaSt-nanled country both
TIE fiat rate ard The interest are usually
Included "a the down payment instead
81 being spread over the ln&talimeut
DeTloc FlIland'S interest charge con-
s4sJs u abogt l1lz u II pr cent, ~
afe1hef. with . fiat rate If z per cent f0r
ftbe first yeaF PoIanos customary
Stl4a<ge Is sDout 3 pcf cent ~ al inter
sfsl-on]g charge of IS 70 is per cent.
b. IUrkey tbe pr&etice Is either for
ihIre6t only or foE interest plus fiag
fa1e