The UK car industry does not need a bail-out but the government is considering help for manufacturers' financing arms, Lord Mandelson says.
He told the BBC that the industry faced problems raising finance to help would-be buyers fund new car purchases.
Lord Mandelson said the Treasury was considering offering commercial loans or loan guarantees to help the industry "bridge a very difficult period".
Meanwhile, an industry body confirmed it was in talks with the government.
"We are in active discussion with the government to ensure that motor finance companies, along with other non-bank lenders, have access to the relevant government liquidity and guarantee schemes, so that they can get the funds they need to serve their customers in the motor and other markets," Stephen Sklaroff, Director General of the Finance and Leasing Association, told the BBC.
Lord Mandelson said the credit crunch has meant that manufacturers' car financing arms could not raise the money needed to fund new car purchases.
"No car company is asking for a bail-out, they may be asking for help in lifting their motor finance arms, needed to fund new car purchases," he told Radio 4's The World At One.
"And it may be that in one case, commercial loans or loan guarantees from the government to assist them to bridge a very difficult period (may be needed) but that is not what I would call a bail-out."
He said both he and the Treasury were in close contact with the car companies about this issue.
Nissan announced on Thursday that it would cut 1,200 jobs.
More jobs to go?
A spokesperson for the Society of Motor Manufacturers and Traders welcomed Lord Mandelson's remarks but said that help in providing car financing was just one part of a series of measures it was seeking.
As well as easing access to finance, the SMMT is calling on the government to help companies to retain skilled employees and maintain investment in new technology and provide incentives to encourage the take up of new vehicles.
John Lewis, chief executive of the British Vehicle Rental Leasing Association, welcomed any measures to improve access to credit but said they should apply to all providers of car loans not just manufacturers.
"Any help with access to finance must not be limited to car manufacturers alone. It should be used to improve access to all routes of car finance, for new and used cars," Mr Lewis said.
Lord Mandelson said that the car industry was an "essential and permanent" part of the UK's manufacturing but warned that the industry must adapt to leaner times.
While demand for cars had been hit by the recession, he said that demand may never get back to previous levels.
He did not rule out further job losses in the UK car industry but said that white-collar positions would be more likely to go than manufacturing jobs.
In the US, as part of its rescue of the car industry in December, the government has unveiled a $6bn (£4.1bn) rescue package for GMAC - General Motors' troubled car loan arm
Showing posts with label car finance. Show all posts
Showing posts with label car finance. Show all posts
Sunday, 11 January 2009
Tuesday, 4 November 2008
An easy routine for car maintenance
Autumn is already here and in a short time, winter will be upon us. As you gear up for the colder temperatures, now is a good time to take preventive measures to care for your vehicle.
Maintain Your Car's Value and Appearance
Regular professional washing and waxing will help maintain your car's appearance as well as its value.
Most car owners understand the value of changing motor oil regularly to protect the engine. But if they forget and instead choose to replace the engine, the car could still be as good as new. However, a car with oxidized paint and a rusted-out body can never be economically restored. The best prevention is regular washing and waxing at a professional car wash.
With more than 22,000 professional car washes around the world offering a wide range of services to protect a car's finish from detoriating rusting, there's no excuse not to keep your vehicle in great shape. Car washes offer basic to extensive operations to suit all your car care needs.
For starters, try an exterior tunnel wash to automatically provide protective waxes and undercarriage treatment. Also, consider detailing or custom polishing for more extensive protection. By applying and buffing a premium polish, you can restore the shine of your car. On the detail side, you can vacuum everything from the rugs in the trunk to the air conditioner vents.
A Quick Fix
If you are running short on time but need your car professionally cleaned, try a self-service car wash that provides a variety of effective, self-cleaning services to choose from. For best results, follow the step-by-step instructions posted in the self-serve bay that call for starting with a pre-soak to loosen road grime. Next comes the high-pressure soap wash. For gentle scrubbing, use the foaming brush next, followed by the fresh water rinse. Also, remember to take advantage of special tire and wheel cleaners. For maximum protection and shine, the wax application is a must. Finally, many self-serve washes offer a spot-free rinse. All the solutions are specially formulated to clean tough road dirt and protect you car's shine.
Protect Your Car from Winter's Hazards
To get a jumpstart on protecting your car from winter's effects, remember that the most damaging thing you can do to your car during this time is nothing! Don't worry about your car freezing -- washing salt, slush and mud off your car in cold weather is vital.
The best thing you can do this winter is to wash your vehicle frequently at a professional car wash, even every few days if the temperature rises and falls from freezing and you've been driving on salted roads. Washing also should include an undercarriage rinse (available at most professional car washes) to remove salt from hard-to-reach areas that are likely to rust, such as the bumpers and in the wheel wells.
Now is the time to get your car in gear for the winter season with the preventive maintenance measure of having your car professionally washed -- you and your wallet will be glad you did.
Maintain Your Car's Value and Appearance
Regular professional washing and waxing will help maintain your car's appearance as well as its value.
Most car owners understand the value of changing motor oil regularly to protect the engine. But if they forget and instead choose to replace the engine, the car could still be as good as new. However, a car with oxidized paint and a rusted-out body can never be economically restored. The best prevention is regular washing and waxing at a professional car wash.
With more than 22,000 professional car washes around the world offering a wide range of services to protect a car's finish from detoriating rusting, there's no excuse not to keep your vehicle in great shape. Car washes offer basic to extensive operations to suit all your car care needs.
For starters, try an exterior tunnel wash to automatically provide protective waxes and undercarriage treatment. Also, consider detailing or custom polishing for more extensive protection. By applying and buffing a premium polish, you can restore the shine of your car. On the detail side, you can vacuum everything from the rugs in the trunk to the air conditioner vents.
A Quick Fix
If you are running short on time but need your car professionally cleaned, try a self-service car wash that provides a variety of effective, self-cleaning services to choose from. For best results, follow the step-by-step instructions posted in the self-serve bay that call for starting with a pre-soak to loosen road grime. Next comes the high-pressure soap wash. For gentle scrubbing, use the foaming brush next, followed by the fresh water rinse. Also, remember to take advantage of special tire and wheel cleaners. For maximum protection and shine, the wax application is a must. Finally, many self-serve washes offer a spot-free rinse. All the solutions are specially formulated to clean tough road dirt and protect you car's shine.
Protect Your Car from Winter's Hazards
To get a jumpstart on protecting your car from winter's effects, remember that the most damaging thing you can do to your car during this time is nothing! Don't worry about your car freezing -- washing salt, slush and mud off your car in cold weather is vital.
The best thing you can do this winter is to wash your vehicle frequently at a professional car wash, even every few days if the temperature rises and falls from freezing and you've been driving on salted roads. Washing also should include an undercarriage rinse (available at most professional car washes) to remove salt from hard-to-reach areas that are likely to rust, such as the bumpers and in the wheel wells.
Now is the time to get your car in gear for the winter season with the preventive maintenance measure of having your car professionally washed -- you and your wallet will be glad you did.
Sunday, 2 November 2008
Buying That Car Privately
Many people buy cars privately rather than through dealers. You can often save money going this route, however, keep in mind that if you have problems with the vehicle it may be difficult, if not impossible, to get any assistance or compensation from the vendor. Here are some more tips on how to get the best deal when buying a used car:
It's "buyer-beware" when purchasing a used car, so, be sure to take it to your mechanic for an inspection before handing over any money. If he (or she) finds the vehicle unsafe and/or in need of repairs, determine who will pay for them beforehand and include this in your written purchase agreement.
Check for liens against the vehicle. A lien means that money is owed on the vehicle and although the vendor is in possession of the vehicle, its legal claim belongs to someone else, such as a bank. If you buy a vehicle with a lien against it, you might be held responsible for future payment. Legislation differs across jurisdictions on the consequences of buying a vehicle with a lien. It is possible that the new owner may be required to pay the money owed or alternately you may risk having the vehicle seized. Contact your provincial or territorial office of consumer affairs for information specific to your jurisdiction or to find the organization in your jurisdiction responsible for conducting lien checks.
Ensure that the person you buy the car from is its registered owner. Remember to ask for repair bills and maintenance records.
If you decide to buy a vehicle from a private seller understand that he or she could be in the business of reselling poor-quality, stolen and/or rebuilt vehicles. Some of these people, frequently referred to as "curbers" or "curbsiders," may be involved with any number of other scams, such as tampering with the odometer or selling vehicles with liens against them.
The risk of curbsider scams makes it especially important that you get the used vehicle checked by a mechanic. You may want to question a mechanic you know and trust to see if the odometer has been rolled back. They can often tell by comparing wear and tear with the odometer reading.
Remember that you don't have the right to change your mind after a sale such as this. If you have problems with the vehicle it will most likely be impossible to get any assistance or compensation from the vendor. Litigation may be your only option.
As with any large ticket purchase, there's a lot to know in order to get the deal that's right for you. The sources of information about buying cars are limitless. It can be quite frustrating, and time consuming to get what you need.
It's "buyer-beware" when purchasing a used car, so, be sure to take it to your mechanic for an inspection before handing over any money. If he (or she) finds the vehicle unsafe and/or in need of repairs, determine who will pay for them beforehand and include this in your written purchase agreement.
Check for liens against the vehicle. A lien means that money is owed on the vehicle and although the vendor is in possession of the vehicle, its legal claim belongs to someone else, such as a bank. If you buy a vehicle with a lien against it, you might be held responsible for future payment. Legislation differs across jurisdictions on the consequences of buying a vehicle with a lien. It is possible that the new owner may be required to pay the money owed or alternately you may risk having the vehicle seized. Contact your provincial or territorial office of consumer affairs for information specific to your jurisdiction or to find the organization in your jurisdiction responsible for conducting lien checks.
Ensure that the person you buy the car from is its registered owner. Remember to ask for repair bills and maintenance records.
If you decide to buy a vehicle from a private seller understand that he or she could be in the business of reselling poor-quality, stolen and/or rebuilt vehicles. Some of these people, frequently referred to as "curbers" or "curbsiders," may be involved with any number of other scams, such as tampering with the odometer or selling vehicles with liens against them.
The risk of curbsider scams makes it especially important that you get the used vehicle checked by a mechanic. You may want to question a mechanic you know and trust to see if the odometer has been rolled back. They can often tell by comparing wear and tear with the odometer reading.
Remember that you don't have the right to change your mind after a sale such as this. If you have problems with the vehicle it will most likely be impossible to get any assistance or compensation from the vendor. Litigation may be your only option.
As with any large ticket purchase, there's a lot to know in order to get the deal that's right for you. The sources of information about buying cars are limitless. It can be quite frustrating, and time consuming to get what you need.
Friday, 31 October 2008
After buying the car..
Enjoy your car... that's simple huh? Well it's not really that simple. Here is a list of things to think about after the sale.
Notify your insurance agent about the new car.
Read the entire owners manual. Familiarize yourself with the service requirements. Understand when you need to change oil, filters, and other major things like timing belt and driveline fluids.
Get used to operating the heating/AC controls and the radio so you do not have to fumble around and risk an accident while on the highway.
Pop the hood and find the oil filler cap, the oil dipstick. If you bought a car with an automotive transmission there will be a dipstick for the transmission fluid also.
Find the spare tire and jack. Make sure you know where to jack the car when changing a tire and how to remove the spare when you need it. There is nothing worse than getting a flat tire in a new car and having to struggle to change it the first time.
Accessorize! It's your car and it should make a statement about you. There are plenty of aftermarket items to make your new car unique like yourself. Wheels, bug guards, window visors and more are all available at part houses like CarParts.com
Notify your insurance agent about the new car.
Read the entire owners manual. Familiarize yourself with the service requirements. Understand when you need to change oil, filters, and other major things like timing belt and driveline fluids.
Get used to operating the heating/AC controls and the radio so you do not have to fumble around and risk an accident while on the highway.
Pop the hood and find the oil filler cap, the oil dipstick. If you bought a car with an automotive transmission there will be a dipstick for the transmission fluid also.
Find the spare tire and jack. Make sure you know where to jack the car when changing a tire and how to remove the spare when you need it. There is nothing worse than getting a flat tire in a new car and having to struggle to change it the first time.
Accessorize! It's your car and it should make a statement about you. There are plenty of aftermarket items to make your new car unique like yourself. Wheels, bug guards, window visors and more are all available at part houses like CarParts.com
Tuesday, 19 August 2008
Bike Finance: Easier than ever
Buying a motorbike can very much seem like an attractive option these days. Gas prices are higher than ever and show no signs of returning to the previously rock-bottom prices we once enjoyed for fuel. For more and more consumers, fuel economy is becoming a driving factor when they're making their decisions about what kind of vehicle to buy, sell, or lease. Motorbikes are notoriously popular right now for their excellent gas mileage and their lower prices as compared to cars. But even with that lowered price, many people are worried about how they might finance their bike. As you'll see by the time you're done reading this article though, bike finance is easier than ever.
There are many different types of loans on motorbikes, depending on the financial situation of the borrower. Even if your credit is not the best, there are many companies who specialize in sub-prime lending that will take on your loan for you. In fact, many dealers now have their own loan departments to help out buyers who have less than perfect credit, recognizing that this is a large sector of the market they can deal with. The most important advice when taking on a new loan, is to pay close attention to your interest rate. By shopping around and getting the best possible rate, you can save yourself hundreds or thousands of dollars over the life of the loan. The excellent thing about a motorbike, is because of the relatively low price compared to an automobile, you might be able to make the loan for a much shorter term, saving on interest fees and still not having a monthly payment much higher than you would have gotten on a car!
Whether you're buying one for the gas mileage and a commute, or you're just wanting that fun street bike that you've always promised yourself that you would get one day, there's a bike finance program out there for you. Even though it can seem intimidating at first, there are plenty of great places to get resources and information on financing your bike, and before you know it you'll be out on the open road.
There are many different types of loans on motorbikes, depending on the financial situation of the borrower. Even if your credit is not the best, there are many companies who specialize in sub-prime lending that will take on your loan for you. In fact, many dealers now have their own loan departments to help out buyers who have less than perfect credit, recognizing that this is a large sector of the market they can deal with. The most important advice when taking on a new loan, is to pay close attention to your interest rate. By shopping around and getting the best possible rate, you can save yourself hundreds or thousands of dollars over the life of the loan. The excellent thing about a motorbike, is because of the relatively low price compared to an automobile, you might be able to make the loan for a much shorter term, saving on interest fees and still not having a monthly payment much higher than you would have gotten on a car!
Whether you're buying one for the gas mileage and a commute, or you're just wanting that fun street bike that you've always promised yourself that you would get one day, there's a bike finance program out there for you. Even though it can seem intimidating at first, there are plenty of great places to get resources and information on financing your bike, and before you know it you'll be out on the open road.
Friday, 15 August 2008
Car financing on bad credit
There's an often cited conventional wisdom that buying a car can sometimes be more difficult than buying a house. Securing financing for a new automobile can be a confusing and frustrating process for the average consumer, especially at a younger age when you're buying your first car and may not fully understand all the financial concepts that go into an auto loan, and how the companies make their final decisions.
Essientially, a bank will use your credit score, combined with your disposable income, credit history, and residence and job history to make the decision of whether or not to loan you the money for your new vehicle. One of the biggest mistakes in buying a car is paying too much for this financing. The most important tip that can be given is to look at the overall big picture. A low monthly payment might not mean a low cost if your interest rate is very high or if there are lots of penalties and fees built into the loan. Make sure to look at the total agreement when making your financing choice, and if you're not sure what something means then don't be afraid to ask questions.
A lot of companies are offering car loans to people with bad credit, just a simple internet search turns up dozens upon dozens of companies that can help sub-prime buyers with car financing. Many dealerships understand the tough financial times as well, and will sometimes have "special buyer" financial departments that examine and offer credit loans to buyers with less than perfect credit ratings. Remember to shop around before selecting your loan. Consumers often will select the first loan that they are approved for, instead of waiting to see if they might get approved for several different loans from various subprime lenders, and be able to select the rate and terms that are right for them.We've only touched the surface of auto financing with bad credit, but there's a wealth of resources out there for the savvy buyer that could save hundreds or thousands of dollars in the long-run, so be sure to do your homework, and before you know it you'll be in that new car you've always wanted.
Essientially, a bank will use your credit score, combined with your disposable income, credit history, and residence and job history to make the decision of whether or not to loan you the money for your new vehicle. One of the biggest mistakes in buying a car is paying too much for this financing. The most important tip that can be given is to look at the overall big picture. A low monthly payment might not mean a low cost if your interest rate is very high or if there are lots of penalties and fees built into the loan. Make sure to look at the total agreement when making your financing choice, and if you're not sure what something means then don't be afraid to ask questions.
A lot of companies are offering car loans to people with bad credit, just a simple internet search turns up dozens upon dozens of companies that can help sub-prime buyers with car financing. Many dealerships understand the tough financial times as well, and will sometimes have "special buyer" financial departments that examine and offer credit loans to buyers with less than perfect credit ratings. Remember to shop around before selecting your loan. Consumers often will select the first loan that they are approved for, instead of waiting to see if they might get approved for several different loans from various subprime lenders, and be able to select the rate and terms that are right for them.We've only touched the surface of auto financing with bad credit, but there's a wealth of resources out there for the savvy buyer that could save hundreds or thousands of dollars in the long-run, so be sure to do your homework, and before you know it you'll be in that new car you've always wanted.
Tuesday, 29 July 2008
Credit and loans
Due to innate alterations in the UK finance marketplace, borrowers that possess an adverse credit record now have a greater access to more reasonable loan rates than ever before. Research shows that approximately one quarter of all UK consumers have experienced some type of unfavorable credit. This is a fairly substantial amount of people representing nearly fifteen million consumers. Whilst it's somewhat alarming to hear that so many people have struggled with debt problems, it's not surprising in today's credit-driven economic system.
Credit card balances and revolving debt amounts continue to increase in the UK, which naturally leads to more consumers fighting to deal with their financial debt situations. The positive news for the developing group of consumers that experience unfavorable credit is that at present more than ever, they have alternatives to use in obtaining finance facilities. The increase in the amount of bad credit finance opportunities could in reality be partially attributed to a flourishing population of consumers who meet the profile of this target market.
As more borrowers experience bad credit, and whilst the credit marketplace has become awash with lenders and card companies, rivalry causes the banks and finance lenders to be significantly more competitive with finance products. As a result of this some lenders have aggressively pursued the adverse credit sector with specific finance products. Whilst it can't follow that having adverse credit is advantageous, it can be said that it's not as desperate as it formerly was for those that have been irresponsible with debt in the past. There are now, more than ever before more opportunites for borrowers to be given a second chance especially regarding a cheap car loan
Of course, there is certainly more risk to financial institutions whilst offering financial products to consumers that have already exhibited a poor payment history with debt. Nonetheless, a few financial institutions market themselves as being sympathetic to the needs of adverse finance consumers. Financial institutions endeavor to pursue consumers with either easy to complete and fulfill application processes, fairer or lower rates, significantly better terms on loans, or financial products of lower amounts that assist the lender to rebuild their credit rating with a more manageable payment structure which is affordable with budgeting.
An additional modification that has profited adverse finance consumers has been the development on the World Wide Web with reference to lending. Independent finance companies and brokers have caused there to be significantly more rate competition amongst finance lenders, and more financial institutions are extending their porfolio by offering products online. This change in the way the market delivers its products has created a more effective market for financial institutions and allowed for quicker finance decisions for consumers. Consumers do need to be cautious whilst looking for financial products if they have adverse credit. Whilst many reputable lenders are available, some unscrupulous lenders may look to take advantage of desperate consumers with high rates and up front finance fees. A few conceal these fees in the small print of the documentation or disclosures to stave off communicating it immediately with the borrower.
All in all it needs only a little time and some comparison web site researching to ensure that you feel that you are geting a decent deal for the credit being offered. Always keep in mind that different finance instituitions look for different types of customers, therefore your personal circumstances and your credit rating are important.
Credit card balances and revolving debt amounts continue to increase in the UK, which naturally leads to more consumers fighting to deal with their financial debt situations. The positive news for the developing group of consumers that experience unfavorable credit is that at present more than ever, they have alternatives to use in obtaining finance facilities. The increase in the amount of bad credit finance opportunities could in reality be partially attributed to a flourishing population of consumers who meet the profile of this target market.
As more borrowers experience bad credit, and whilst the credit marketplace has become awash with lenders and card companies, rivalry causes the banks and finance lenders to be significantly more competitive with finance products. As a result of this some lenders have aggressively pursued the adverse credit sector with specific finance products. Whilst it can't follow that having adverse credit is advantageous, it can be said that it's not as desperate as it formerly was for those that have been irresponsible with debt in the past. There are now, more than ever before more opportunites for borrowers to be given a second chance especially regarding a cheap car loan
Of course, there is certainly more risk to financial institutions whilst offering financial products to consumers that have already exhibited a poor payment history with debt. Nonetheless, a few financial institutions market themselves as being sympathetic to the needs of adverse finance consumers. Financial institutions endeavor to pursue consumers with either easy to complete and fulfill application processes, fairer or lower rates, significantly better terms on loans, or financial products of lower amounts that assist the lender to rebuild their credit rating with a more manageable payment structure which is affordable with budgeting.
An additional modification that has profited adverse finance consumers has been the development on the World Wide Web with reference to lending. Independent finance companies and brokers have caused there to be significantly more rate competition amongst finance lenders, and more financial institutions are extending their porfolio by offering products online. This change in the way the market delivers its products has created a more effective market for financial institutions and allowed for quicker finance decisions for consumers. Consumers do need to be cautious whilst looking for financial products if they have adverse credit. Whilst many reputable lenders are available, some unscrupulous lenders may look to take advantage of desperate consumers with high rates and up front finance fees. A few conceal these fees in the small print of the documentation or disclosures to stave off communicating it immediately with the borrower.
All in all it needs only a little time and some comparison web site researching to ensure that you feel that you are geting a decent deal for the credit being offered. Always keep in mind that different finance instituitions look for different types of customers, therefore your personal circumstances and your credit rating are important.
Thursday, 17 April 2008
A brief explanation why the vehicle value is important to subprime lending
Why is it that people who are classed as subprime struggle to get a personal loan, but can be approved for car finance by numerous companies, surely lending money is all the same?
The answer is quite straightforward, but maybe confusing to those who are not in the subprime finance business. In essence it boils down to a simple case of security and potential loss. If someone defaults on a personal loan, there is no real potential of recovery of any of the funds in a swift period of time.
For instance, customer A defaults on a personal loan, apart from taking them to court and trying to recover income from them, there is no alternative and if the customer has a genuine reason for default, it’s unlikely that you would obtain a judgement for anything meaningful in terms of monthly instalments. Therefore your loss is total – advance, minus payments made and the derisory judgement the court makes in a repayment schedule; assuming that the customer actually keeps to it. In this scenario, your return will drip feed in over many years and without doubt you will have to chase the customer for the payments as well. All in all, not a good position to be in if you’re a lender, this is why loans with no security are few and far between in the subprime world.
Let’s now take the subprime car loan. First of all, the lender knows that there is an asset they can repossess and sell in the event of default, so immediately were ahead of a personal loan in terms of loss. Secondly, we know that the vehicle is more than likely a critical requirement for the customer, few people want to get public transport and nowadays in general we all prefer to travel by car. This means that the customer has a reason to pay for the loan as well, so were looking good now.
Not only do we have some immediate return in the event of default, we also know there is a need for the customer to pay for the loan, rather than the basic obligation of a finance agreement.
So we now need to analyse what the loss situation is going to be. The loss is in direct proportion to the amount you lend on the vehicle relative to resale/auction value. Lending someone £10,000 on a car loan that’s worth £600 at an auction is dumb and is as good as writing a personal loan. Sure, cars still depreciate; however, you’re betting that the instalments made will help offset this problem.
A standard market value in the subprime sector is to lend retail value (mileage adjusted), using an agreed independent and updated valuation source (Glass Guide or CAP) in the hope you will obtain trade price at the auctions. For those not in the “know” circa 120-125% of trade represents the retail amount, however, prices do vary.
Operating in this manner, the dealership or seller makes enough profit out of the metal for it to be worth their while and the finance company “ideally” has an asset that can realise a good amount in the event of repossession and resale at auction. This will ensure that the loss isn’t total and those customers who pay will pay for those that don’t.
The only security superior to that of a vehicle, is obviously the security of a charge on the property.
The answer is quite straightforward, but maybe confusing to those who are not in the subprime finance business. In essence it boils down to a simple case of security and potential loss. If someone defaults on a personal loan, there is no real potential of recovery of any of the funds in a swift period of time.
For instance, customer A defaults on a personal loan, apart from taking them to court and trying to recover income from them, there is no alternative and if the customer has a genuine reason for default, it’s unlikely that you would obtain a judgement for anything meaningful in terms of monthly instalments. Therefore your loss is total – advance, minus payments made and the derisory judgement the court makes in a repayment schedule; assuming that the customer actually keeps to it. In this scenario, your return will drip feed in over many years and without doubt you will have to chase the customer for the payments as well. All in all, not a good position to be in if you’re a lender, this is why loans with no security are few and far between in the subprime world.
Let’s now take the subprime car loan. First of all, the lender knows that there is an asset they can repossess and sell in the event of default, so immediately were ahead of a personal loan in terms of loss. Secondly, we know that the vehicle is more than likely a critical requirement for the customer, few people want to get public transport and nowadays in general we all prefer to travel by car. This means that the customer has a reason to pay for the loan as well, so were looking good now.
Not only do we have some immediate return in the event of default, we also know there is a need for the customer to pay for the loan, rather than the basic obligation of a finance agreement.
So we now need to analyse what the loss situation is going to be. The loss is in direct proportion to the amount you lend on the vehicle relative to resale/auction value. Lending someone £10,000 on a car loan that’s worth £600 at an auction is dumb and is as good as writing a personal loan. Sure, cars still depreciate; however, you’re betting that the instalments made will help offset this problem.
A standard market value in the subprime sector is to lend retail value (mileage adjusted), using an agreed independent and updated valuation source (Glass Guide or CAP) in the hope you will obtain trade price at the auctions. For those not in the “know” circa 120-125% of trade represents the retail amount, however, prices do vary.
Operating in this manner, the dealership or seller makes enough profit out of the metal for it to be worth their while and the finance company “ideally” has an asset that can realise a good amount in the event of repossession and resale at auction. This will ensure that the loss isn’t total and those customers who pay will pay for those that don’t.
The only security superior to that of a vehicle, is obviously the security of a charge on the property.
Tuesday, 8 April 2008
Car finance and the need to change
In this day and age it’s near impossible to purchase a vehicle without obtaining car finance. Most if not everyone wants a new shining vehicle and if they cannot obtain a new one a used one will be a good alternative.
It seems that people have a change cycle of approximately every two to three years; this appears to be the ideal time for the need to change. This is quite odd as it appears that most people would actually prefer to change their car and obtain car finance again for the next vehicle, rather than paying off the total loan before buying another. This can be the result of some socio-economic issues. For instance, is it that the neighbour has recently changed their vehicle, or perhaps they have become bored of the existing one and see the new models released on television adverts and this triggers the compulsion to change it.
My opinion is that it has something to do with “keeping up with the Jones’s” syndrome. The need to appear successful and affluent compared to your peers is what drives many to change. Why have that old vehicle sitting in the drive for so many years, when you can obtain a new one by just changing your car finance deal.
The other thing to keep in mind are the people who just need to have the latest model, they are “into” their vehicles and read all the publications and reviews and then a deep seated urge to get it drives them to change. This is followed by a few visits to the local dealers to see what their missing, a sort of intel mission. If they then find the vehicle is just what they want then the compulsion to buy becomes almost unstoppable then they start to organise the car finance facilities to make it happen.
Car finance rates will not stop this person from buying as the need to buy will now outweigh the rates on the car finance and as long as they can get it organised there happy. Car finance is available to consumers here.
It seems that people have a change cycle of approximately every two to three years; this appears to be the ideal time for the need to change. This is quite odd as it appears that most people would actually prefer to change their car and obtain car finance again for the next vehicle, rather than paying off the total loan before buying another. This can be the result of some socio-economic issues. For instance, is it that the neighbour has recently changed their vehicle, or perhaps they have become bored of the existing one and see the new models released on television adverts and this triggers the compulsion to change it.
My opinion is that it has something to do with “keeping up with the Jones’s” syndrome. The need to appear successful and affluent compared to your peers is what drives many to change. Why have that old vehicle sitting in the drive for so many years, when you can obtain a new one by just changing your car finance deal.
The other thing to keep in mind are the people who just need to have the latest model, they are “into” their vehicles and read all the publications and reviews and then a deep seated urge to get it drives them to change. This is followed by a few visits to the local dealers to see what their missing, a sort of intel mission. If they then find the vehicle is just what they want then the compulsion to buy becomes almost unstoppable then they start to organise the car finance facilities to make it happen.
Car finance rates will not stop this person from buying as the need to buy will now outweigh the rates on the car finance and as long as they can get it organised there happy. Car finance is available to consumers here.
Wednesday, 2 April 2008
Collecting and the objectives
Yesterdays post was about your reaction to taking that first call because your car finance loan was in arrears. This one is a bit of insight from the collector who will be calling you.
First off, your details are going to be in the auto dialer at the car finance company, I mentioned this yesterday. Now this person will usually be in a call center of the car finance company, have targets and hate his or her job and be speaking to people trying to weasel out of paying for their car loan all day. Not a good start for you eh?
So first off the call is placed by the car finance company auto dialer, then your details will appear on their screen when you answer the call. If you don’t answer the call then it will usually try the other numbers on file for you in quick succession, each waiting for the call to be answered or not as the case may be. As soon as the call is live your details will appear on the screen of the caller. Sometimes, odd things happen here, for instance if the car finance organisation use a predictive dialer and the call center is busy, you might actually not get anybody on the line immediately. There's a marked delay between you answering the call and somebody actually talking to you, then you know their busy!
The car finance employee calling you doesn’t have enough time to read all the comments on your file, if any. This is why they always seem to have the same introduction - security questions, statement of balance and can you pay the balance now. This is so you have to take time to respond which enables a sort of catch-up period for the collector to look at some key details while your answering them.
So, the collector’s objective - Well it used to be something like:
1. What’s the problem for the payment arrears.
2. What’s the solution to stop this happening again?
3. Can they pay now and clear the arrears on your car finance.
This is usually why you get asked why you haven't made the payment to your car finance. There’s some real obvious NO NO's here, the collector isn't looking for: Uhm, couldn’t be bothered about my car finance, I'm busy call me back later type of replies, there looking to get you off their queue. There’s nothing personal about the call, you will be one of perhaps hundreds of people this person is going to have to try and speak to about their car finance before they can go home, or more than likely, go to the pub to release the stress of all the car finance people in arrears.
So the car finance collector needs a result and you need a result. You do need to agree and stick with an arrangement to pay. Getting abusive or argumentative will get you nowhere. Your offhand comments will be noted and the next time you are called, you can bet your house on the fact that you will get a harder time if you’re not going to at least sound responsive to this person. You need to at least give the impression that you care about the loan and that you do want to resolve it, this way there’s a note on your account about how receptive you were and how you had a good attitude to sorting the problem out.
The obvious solution to solve the arrears, is to pay on time and if you do forget to pay, you try and get your account back up to date as soon as possible.
First off, your details are going to be in the auto dialer at the car finance company, I mentioned this yesterday. Now this person will usually be in a call center of the car finance company, have targets and hate his or her job and be speaking to people trying to weasel out of paying for their car loan all day. Not a good start for you eh?
So first off the call is placed by the car finance company auto dialer, then your details will appear on their screen when you answer the call. If you don’t answer the call then it will usually try the other numbers on file for you in quick succession, each waiting for the call to be answered or not as the case may be. As soon as the call is live your details will appear on the screen of the caller. Sometimes, odd things happen here, for instance if the car finance organisation use a predictive dialer and the call center is busy, you might actually not get anybody on the line immediately. There's a marked delay between you answering the call and somebody actually talking to you, then you know their busy!
The car finance employee calling you doesn’t have enough time to read all the comments on your file, if any. This is why they always seem to have the same introduction - security questions, statement of balance and can you pay the balance now. This is so you have to take time to respond which enables a sort of catch-up period for the collector to look at some key details while your answering them.
So, the collector’s objective - Well it used to be something like:
1. What’s the problem for the payment arrears.
2. What’s the solution to stop this happening again?
3. Can they pay now and clear the arrears on your car finance.
This is usually why you get asked why you haven't made the payment to your car finance. There’s some real obvious NO NO's here, the collector isn't looking for: Uhm, couldn’t be bothered about my car finance, I'm busy call me back later type of replies, there looking to get you off their queue. There’s nothing personal about the call, you will be one of perhaps hundreds of people this person is going to have to try and speak to about their car finance before they can go home, or more than likely, go to the pub to release the stress of all the car finance people in arrears.
So the car finance collector needs a result and you need a result. You do need to agree and stick with an arrangement to pay. Getting abusive or argumentative will get you nowhere. Your offhand comments will be noted and the next time you are called, you can bet your house on the fact that you will get a harder time if you’re not going to at least sound responsive to this person. You need to at least give the impression that you care about the loan and that you do want to resolve it, this way there’s a note on your account about how receptive you were and how you had a good attitude to sorting the problem out.
The obvious solution to solve the arrears, is to pay on time and if you do forget to pay, you try and get your account back up to date as soon as possible.
Tuesday, 1 April 2008
When it all goes bad
Sometimes people get the car finance, look after the vehicle, make a few payments and then decide it’s not a priority anymore. They have loads of other bills to pay and seem to fall back into the trap of "maybe I'll pay it later" syndrome.
The problem here is that if you have obtained the vehicle from a specialist subprime company with car finance, they don't hang around waiting for you to pay when you want.
The car finance account usually falls pass due into a list after a day or at most three days overdue. At this point, the collection machine starts to move into action.
It’s not usual for you to receive a polite reminder in the post, nope that was a thing of the past when your credit rating was good. Now, you will receive a telephone call from the car finance company and put into an auto dialler list so they can get hold of you as soon as possible. Depending on the collection technique of the company, they will try all the known numbers, work, home, mobile etc. They also will not leave just a polite message; usually the car finance will call and if you don’t respond, will diarise the call for later in the day. Don’t forget, this isn’t something they do manually and might forget, this is on an automated system (dialler) so you can be assured that the car finance company will continue to call all the known numbers until they can get hold of you.
So, the best solution is to take the call as soon as possible. You need to respond in a none combative manner and arrange to make the payment as soon as possible.
Your real objective when taking the call is to ensure that the collector "feels" that you are not a problem and it was a mere oversight on your behalf and the car finance problem is now solved. This way you don’t get comments on your file about a bad attitude or offensive behaviour. This is important because if they need to speak to you again, the person calling you reads the notes of the previous call before they talk to you and therefore you don't start with the collector thinking that you are going to be difficult with them.
The problem here is that if you have obtained the vehicle from a specialist subprime company with car finance, they don't hang around waiting for you to pay when you want.
The car finance account usually falls pass due into a list after a day or at most three days overdue. At this point, the collection machine starts to move into action.
It’s not usual for you to receive a polite reminder in the post, nope that was a thing of the past when your credit rating was good. Now, you will receive a telephone call from the car finance company and put into an auto dialler list so they can get hold of you as soon as possible. Depending on the collection technique of the company, they will try all the known numbers, work, home, mobile etc. They also will not leave just a polite message; usually the car finance will call and if you don’t respond, will diarise the call for later in the day. Don’t forget, this isn’t something they do manually and might forget, this is on an automated system (dialler) so you can be assured that the car finance company will continue to call all the known numbers until they can get hold of you.
So, the best solution is to take the call as soon as possible. You need to respond in a none combative manner and arrange to make the payment as soon as possible.
Your real objective when taking the call is to ensure that the collector "feels" that you are not a problem and it was a mere oversight on your behalf and the car finance problem is now solved. This way you don’t get comments on your file about a bad attitude or offensive behaviour. This is important because if they need to speak to you again, the person calling you reads the notes of the previous call before they talk to you and therefore you don't start with the collector thinking that you are going to be difficult with them.
Monday, 31 March 2008
Car finance and bad credit
Car finance has become one of the basic necessities of the contemporary world. All the daily chores, be it buying grocery to catching up with important business dealings, all become simpler with the aid of a car. The problem arises when you don’t have enough finance. The situation becomes worse if you have a bad credit history. You can be tagged to bad credit due to various reasons such as:
Bankruptcy
Slow credit or No credit
No proof of income
Self-employed status
Individual Voluntary Agreements or IVA’s
County Court Judgments or CCJ’s
Arrears
Defaults
Bad credit can make your financial life a drag. With the growing standard of living, one can barely fulfil basic necessities with his regular income. In the modern world, basic necessities not only include food, home but also a car. This is when bad credit car finance can come to your rescue. Remember, it would be attached with a higher rate of interest, due to a bad credit history.
It can be quite a challenging task to locate suitable car finance with bad credit. Yet with a growing number of bad credit loan providers, your difficult task has eased to a great extent. It is recommended that you should undertake some research before you choose upon bad credit car finance to satiate your needs. You can navigate through the various loan quotes that can help you to pick the right car finance to customize with your personal state of affairs. Loan calculator can aid to evaluate monthly instalments, which can mould to your situation. Loan expertise too, which is offered by many loan providers can enrich your knowledge and put you at the helm of dealings.
Bad credit can no longer deny you to finance your dream car. You can go ahead with car financing either a used or a new car without bothering about a bad credit. With bad credit car finance you can avail benefits such as:
Reinstate your credit standing
Improve chances of better loan opportunities in future
Don’t let bad credit purge your desire to purchase a car. Avail yourself of bad credit car finance and make your dreams a reality.
Bankruptcy
Slow credit or No credit
No proof of income
Self-employed status
Individual Voluntary Agreements or IVA’s
County Court Judgments or CCJ’s
Arrears
Defaults
Bad credit can make your financial life a drag. With the growing standard of living, one can barely fulfil basic necessities with his regular income. In the modern world, basic necessities not only include food, home but also a car. This is when bad credit car finance can come to your rescue. Remember, it would be attached with a higher rate of interest, due to a bad credit history.
It can be quite a challenging task to locate suitable car finance with bad credit. Yet with a growing number of bad credit loan providers, your difficult task has eased to a great extent. It is recommended that you should undertake some research before you choose upon bad credit car finance to satiate your needs. You can navigate through the various loan quotes that can help you to pick the right car finance to customize with your personal state of affairs. Loan calculator can aid to evaluate monthly instalments, which can mould to your situation. Loan expertise too, which is offered by many loan providers can enrich your knowledge and put you at the helm of dealings.
Bad credit can no longer deny you to finance your dream car. You can go ahead with car financing either a used or a new car without bothering about a bad credit. With bad credit car finance you can avail benefits such as:
Reinstate your credit standing
Improve chances of better loan opportunities in future
Don’t let bad credit purge your desire to purchase a car. Avail yourself of bad credit car finance and make your dreams a reality.
Thursday, 27 March 2008
The implications of the recent budget
As you’re on this car finance site, you probably have an interest in vehicles, are a driver or are hoping to become one very soon. As such, there’s no doubt at all that the budget affects you, whether you’re a millionaire or on minimum wage. Let me just say this first - the budget hits you where it hurts.
Once again, us cash-cow drivers with car finance are going to suffer in a number of ways…Fuel Petrol and diesel prices had a planned rise of 2p per litre - however thanks to much industry (and some faceless entities) lobbying, we’ve now seen this put back to October. To me though, this just stinks of ‘stealth tax‘. What I mean by this is that if the government can make everyone calm down or forget about it for long enough, they won’t complain half so much and the coffers will still be filled. Fuel duty also has a guaranteed rise of 0.5p per litre in 2010 - no doubt with more raises in-between, all this on top of your car finance repayments.
Alternative fuel Car finance that aren’t powered by petrol or diesel are on ‘alternative fuel’. Those vehicles could well come in for a discount of up to £20 per year on their road tax. Not great, but better than nothing. Duty differential will disappear from alternative fuel and a Renewable Transport Fuel Obligation will force suppliers (such as Shell) to ensure that 5% of their fuel comes from renewable sources.
Vehicle excise duty/road tax - The number of bands for car finance vehicles will go all the way up to 13 from next year, with band M (255g of cO2 per km) being charged an annual fee of £425 per annum. Vehicles with a lower than 150g output per km will pay a lower rate from 2010 (why not from next year like the higher paying vehicles is anyone’s guess). Vehicles with a lower rate than 130g will not pay road tax in their first year. If this were every year I’d see the point… but just in the single year? Regardless, the most shocking fact is that band M vehicles will receive a massive bill of £950 in the first year.
Funding for more car finance tax - The government has freed up funding for local councils and private companies to investigate the idea of further congestion charges and national road pricing. It’s a great way to essentially fund further taxation I must say, and I’m not quite sure how making people pay more will stop them using the roads that they physically must use.
My overall thoughts on the budget and car finance - Frankly, as per usual, those who drive have been hit where it hurts - their wallets. I’m not surprised, given the fact that more than £45 million is generated for HMRC every year, over and above the car finance. However, as long as the government has the ideal of ‘being green’ to hide behind, people won’t rally behind the injustice of how much we pay for vehicles. The budget is once again unfair and a great way to eke more money out of an unwitting public let alone the car finance.
As a side note, due to the fact that we’re close to recession, this is one good year to buy a used vehicle on car finance. Depreciation is going to be 8% more than expected, so look for car finance in a couple of months to pay a price that’ll keep some change in your pocket.
Once again, us cash-cow drivers with car finance are going to suffer in a number of ways…Fuel Petrol and diesel prices had a planned rise of 2p per litre - however thanks to much industry (and some faceless entities) lobbying, we’ve now seen this put back to October. To me though, this just stinks of ‘stealth tax‘. What I mean by this is that if the government can make everyone calm down or forget about it for long enough, they won’t complain half so much and the coffers will still be filled. Fuel duty also has a guaranteed rise of 0.5p per litre in 2010 - no doubt with more raises in-between, all this on top of your car finance repayments.
Alternative fuel Car finance that aren’t powered by petrol or diesel are on ‘alternative fuel’. Those vehicles could well come in for a discount of up to £20 per year on their road tax. Not great, but better than nothing. Duty differential will disappear from alternative fuel and a Renewable Transport Fuel Obligation will force suppliers (such as Shell) to ensure that 5% of their fuel comes from renewable sources.
Vehicle excise duty/road tax - The number of bands for car finance vehicles will go all the way up to 13 from next year, with band M (255g of cO2 per km) being charged an annual fee of £425 per annum. Vehicles with a lower than 150g output per km will pay a lower rate from 2010 (why not from next year like the higher paying vehicles is anyone’s guess). Vehicles with a lower rate than 130g will not pay road tax in their first year. If this were every year I’d see the point… but just in the single year? Regardless, the most shocking fact is that band M vehicles will receive a massive bill of £950 in the first year.
Funding for more car finance tax - The government has freed up funding for local councils and private companies to investigate the idea of further congestion charges and national road pricing. It’s a great way to essentially fund further taxation I must say, and I’m not quite sure how making people pay more will stop them using the roads that they physically must use.
My overall thoughts on the budget and car finance - Frankly, as per usual, those who drive have been hit where it hurts - their wallets. I’m not surprised, given the fact that more than £45 million is generated for HMRC every year, over and above the car finance. However, as long as the government has the ideal of ‘being green’ to hide behind, people won’t rally behind the injustice of how much we pay for vehicles. The budget is once again unfair and a great way to eke more money out of an unwitting public let alone the car finance.
As a side note, due to the fact that we’re close to recession, this is one good year to buy a used vehicle on car finance. Depreciation is going to be 8% more than expected, so look for car finance in a couple of months to pay a price that’ll keep some change in your pocket.
Thursday, 20 March 2008
How to get a better deal from your garage
A car owner’s guide
to servicing and repairs...
Servicing your car will make it last longer. It also makes it safer for you, your passengers and the environment. Here are some tips to help you avoid dodgy garages, get effective work done and achieve good value for a service or a repair of your car. If you have car finance bought from a dealer, the last thing you want is to be paying huge bills as well as your monthly payments for your motor.
START NOW
• Don’t wait until you need a service or repair
• Spend time comparing garages beforehand
• Get your car serviced regularly
• Ask around about good garages
A RELIABLE GARAGE WILL CERTAINLY DO
SOME, OR ALL, OF THE FOLLOWING
• Display a menu of fixed cost works
• Tell you how much they will charge to diagnose a fault if it includes dismantling and putting back together
• Be a member of a trade association (such as the Motor Vehicle Repairers Association)
• Have trained staff and display certificates
• Have an auto complaints procedure
if your looking for car finance check out http://www.infinitycarfinance.co.uk/
to servicing and repairs...
Servicing your car will make it last longer. It also makes it safer for you, your passengers and the environment. Here are some tips to help you avoid dodgy garages, get effective work done and achieve good value for a service or a repair of your car. If you have car finance bought from a dealer, the last thing you want is to be paying huge bills as well as your monthly payments for your motor.
START NOW
• Don’t wait until you need a service or repair
• Spend time comparing garages beforehand
• Get your car serviced regularly
• Ask around about good garages
A RELIABLE GARAGE WILL CERTAINLY DO
SOME, OR ALL, OF THE FOLLOWING
• Display a menu of fixed cost works
• Tell you how much they will charge to diagnose a fault if it includes dismantling and putting back together
• Be a member of a trade association (such as the Motor Vehicle Repairers Association)
• Have trained staff and display certificates
• Have an auto complaints procedure
if your looking for car finance check out http://www.infinitycarfinance.co.uk/
Subscribe to:
Posts (Atom)
