KUWAIT: Car dealerships in Kuwait are not limited by season or the whims of the market. A person in Kuwait needs a car regardless of the country's economic situation or whether it is winter or summer. The easiest way to get a car in Kuwait is to take out a loan. Different factors come into play when deciding whether a loan will be approved and what sort of interest will be on it.

Alaa Hajjaj, head of retail at Al-Soor Financing and Leasing Company, described the steps that need to be taken and the facilities offered at his company to help stimulate car sales in Kuwait. "We are among the leading financing companies in Kuwait," he said, adding that Al-Soor considers itself more flexible than other financiers. He pointed out how quickly the company is at processing paperwork and getting approvals. He said that the company often accepts loan applications with minimum down payments depending on the nature of the case. It makes no difference if the person applying for the loan is a citizen or an expatriate, working in the public or private sectors, he added.

The technical factors that determine whether a loan application is accepted or not is determined by whether it meets the Central Bank of Kuwait's (CBK) several terms and regulations. A loan cannot exceed 40 percent of the sum of a person's income and not exceed 15 times the person's salary. Also, the maximum amount allowed for a consumer loan is 15,000 KD. These conditions apply to both Kuwaitis and expatriates. When getting a loan from CBK, Hajjaj continued, the stability of a person's work counts a lot to the company. "We prefer a low salary consumer with longevity at work to a high salary consumer who has been working of a short while," Hajjaj said.

The strength and market value of the employer is a determining factor as well. In case of low salaries, the collateral value can be enhanced by taking a down payment that ensures a payment of the loan. Another hedging measure can be taken by shortening the payment period to downsize the risk of not settling the loan. Whether the car is luxurious or not does not make a difference to the terms of the loans. "We are a financing institution and our objective is to finance a vehicle loan regardless of how new it is," Hajjaj said.

Speaking on how the financial crisis affected the market, Hajjaj said that the only affect the crisis had on Al-Soor was that it changed consumer behavior. He said the company has had to focus more on the flexibility and terms of the loans than the price of the vehicle itself. Consumers who get laid off have a hard time settling their loans. Many have preferred to buy in cash, Hajjaj said, and pointed out that cash sales reached 40 percent - up from 20 percent - of total sales. "Even though the number of qualified consumers decreased after the crisis," he said, "it did not reach an alarming level. - Kuwait Times