Fixing Hire-Purchase Prices in Motorcycle Hire-Purchase Business

Abstract

Because Thailand’s public transportation system is currently insufficient and does not cover every area, motorcycles are among the top choices for consumers without high incomes and financial readiness who have no financial power to purchase motorcycles in cash. Due to the aforementioned reason, these consumers are dependent on loans from entrepreneurs by making motorcycle hire-purchase agreements. When consumers applied for loans from entrepreneurs by making motorcycle hire-purchase agreements, these entrepreneurs receive returns or benefits in the form of hire-purchase interest. However, because current hire-purchase interest rates used by entrepreneurs to collect from consumers in motorcycle hire-purchase agreements are high, overall hire-purchase costs in hire-purchase agreements have risen correspondingly, meaning the hire-purchase interest that consumers have to pay to entrepreneurs in a hire-purchase agreement for one motorcycle is valued almost equal to the cash price of the purchased motorcycle, meaning entrepreneurs have taken advantage of consumers and meaning entrepreneurs created excessive unfairness to consumers.

According to the study, although Thailand had laws concerning hire-purchase agreements and laws on protections for consumers who made hire-purchase agreements with entrepreneurs, namely, the Civil and Commercial Code, the Consumer Production Act of B.E. 2522 (1979), the Contract Commission Notification on Making the Automobile and Motorcycle Hire-purchase Business and Controlled Contract Business of B.E. 2561 (2018) and the Unfair Contract Terms Act of B.E. 2541 (1998), Thailand’s legal measures were not sufficient and did not have coverage of hire-purchase prices controls. In studies of foreign legal measures in countries such as the United Kingdom, the State of California in the United States and India, the United Kingdom was found to have laws concerning the principle of unfair relationships between contract parties and the court was given broad powers to consider which contracts are unfair in order for the court to issue appropriate orders and this principle of unfair relationships between contract parties can be enforced upon terminated contracts. In the meantime, the State of California in the United States enacted legal measures on control of finance charges which are direct and indirect consumer loan expenses that consumer must pay to entrepreneurs. Finally, India had enacted legal measures to limit hire-purchase charges. Although the aforementioned legislation was canceled, the legislation was canceled because mathematical formulas used to calculate hire-purchase charges had complexity beyond the public’s understanding and conditions in collecting the aforementioned charges in India’s social conditions did not take advantage of the contract parties.

This thesis proposed issuing legal measures to protect consumers who made hire-purchase agreements with entrepreneurs by proposing control of hire-purchase prices by setting hire-purchase interest rate ceilings in the Contract Commission Notification on Making the Automobile and Motorcycle Hire-purchase Business and Controlled Contract Business of B.E. 2561 to protect consumers from having to carry excessive burdens.