Used car dealers have their own reasons for being reluctant to sell electric cars. This reluctance has contributed to the slow formation of a used electric car market.
Meanwhile, the adoption of electric cars has been rapidly increasing in Indonesia. Agustinus, a used car dealer from Focus, told reporters on Wednesday (August 21, 2024) that this reluctance stems from the fact that financing institutions are not fully supporting the sale of electric cars.
“Let alone used electric cars, the funding for new electric cars is still not substantial,” Agustinus said. “If financing institutions are unwilling to fund, then we are also afraid to sell them.”
He suspects that financing institutions are not keen on used electric cars because it is unclear what they would recover if there were a financing default or non-performing loan (NPL). This is different from conventional car financing, where the institution can claim the entire car if an NPL occurs.
“For electric cars, it’s still unclear what would be seized in the event of a financing default. Would it be the car body or the battery?” Agustinus analyzed.
“The financing risk (for electric cars) is very high,” he added.
Meanwhile, Suwandi Wiratno, Chairman of the Indonesian Financing Association, said on Thursday (August 22, 2024) that financing institutions are not actually unwilling to finance electric cars. He noted that if the opportunity arises, they are willing to provide financing.
However, he agreed with Agustinus that there are several factors that concern financing institutions when it comes to electric cars. “When we provide financing, we must consider the business risk. If a default payment occurs, we need to know what can be executed,” he explained.
He further mentioned that the perceived reluctance of financing institutions towards electric cars is also due to obstacles from insurance companies. According to him, insurance companies face a dilemma with electric cars.
Like financing institutions, insurance companies are also unsure of what to do in the event of damage to electric cars.
“The premiums aren’t significant, but we have to cover up to 40 percent,” he explained.
Therefore, Suwandi Wiratno emphasized the importance of establishing an electric car ecosystem. This ecosystem would eventually provide clarity for financing companies and used car dealers regarding the future condition of electric cars.
“When will this happen? I don’t know, because we are always at the end,” he explained.
