Very recently, I have been researching auto financing, considering a purchase of a privately owned luxury vehicle. I contacted several lending institutions to inquire about their rates, and have discovered each nationwide, reputable one I contacted has suspended loaning money on privately owned vehicles, opting to only offer an auto loan on a vehicle purchased from a franchised dealer. Obviously, personal loans are still an option (more than one wanted to immediately sign me up with a home equity loan?!?). Anyone with a good credit score can swing it, if they desire, so I was not initially alarmed. However, I have begun to rethink the lenders' positions on this, and have become more concerned.
This is more far-reaching than simply discontinuing a product for the consumer. Basically, any independant car lot that does not qualify as a "franchised dealer" has had a segment of the buying public removed from the equation. On the surface, this appears to grant the auto companies' dealers a huge advantage. In essence, a buyer now is limited in his choices, and encouraged to either tie up his home, opt for a higher rate personal loan, or deal only with dealers... (and get robbed by trade-in, potentially). Also, extrapolating further, what is the market now for your vehicle if you choose to sell?
Does anyone else feel this is an alarming trend? Is there an interpretation that collusion is apparent between the lending institutions and the auto manufacturers (or at least dealers)?
Thoughts?
__________________
RM Smith
Where is it again that we are going... And why are we in a handbasket?
Not learning from the sub prime?, save your money up and when you can 'afford' to buy that car, then go and buy it, there never has been a thing called cheap money!, something Americans will find out with their national debit comes home to bite their arse.
There is no conspiracy, IMO. What you're seeing is a direct result of the international credit crunch. Lenders are by their nature, very conservative about when, where and to whom they lend their money. And when you consider the machinations w/in U.S. financial institutions, caused by the recent credit crunch, you can multiply their conservatism by a factor of two or three.
To quote someone, "This too shall pass." Things will improve and money will eventually become more available. But in the mean time, I would seriously look into a home equity line of credit or actually refinancing your home. This is not a bad--or evil--thing, and, in fact, is one of the best ways I know of to raise needed capital.
__________________ Don't believe everything you think www.kcmbca.org Kansas City Mercedes-Benz car club
This collusion is nothing new! ...and it is
Lenders like dealerships because they are a constant revenue stream unlike individual that cost money to acquire through advertising and promotions. Dealers get kick back on points just like mortgage brokers; so when you think you haggled for that low price don't be surprised that they will rape you in financing. The dealer just like a mortgage broker has a rate sheet so he can price the loan to get some money in the back UP FRONT as soon as the loan is approved and signed/settled.
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If you buy a sub 20k new car with 0% (aka 0.9%) financing you will be ok. There will not be much depreciation and the loan institution cannot rape you too bad. Do it for the shortest period you can as well. This is all part of the American Socialization Plan. We have always thought that Europeans were smarter so now we get to live and drive pure shit like most of them. W. just accelerated the turn toward socialism as a reaction to his blatant back scratching and ignorant ideology. It is now up to the Democrats to further the turn by over reacting to W's fuck ups. Soon we will have more taxes to cover the debt, more dependence on banks, and far, far, more dependence on the federal gov't because we are whiny little bitches who are poorly educated and cannot see that this way is not the answer.
I agree with everything said here to a point, but the real issue is veiled or clouded by the perception of the credit crunch. The main theme or question here is what happens to the independant car lots, and the individuals when the market has been narrowed by this loan inavailability? Who will buy your used car, and at what value. Seems this condition seriously devalues one's vehicle, and entices one to "sell" (get raped) to a dealer... This is the apparent collusion I speak of... How long before the only outlet for a used vehicle is thru a franchise dealer? I've always believed that if one HAD to pay cash for big-ticket items, the resulting price would be much lower. Credit, especially easy credit allows for artificial inflation of goods, don't ya think?
And why would one open a line of credit (equity loan)on their home for depreciable goods, like an automobile? Seems not the wisest choice to me, and not even an available choice for those who do not own a home.
Oh, and with regards to save and buy... always a very wise and approapiate plan; however when one's money is earning 13% plus, seems more appropriate to borrow at 5-6% or so, and let the nest-egg continue to grow, C'nest Pas?
I am way too ignorant about the financial world, to realize or discern why a product, like an auto loan for a private-party sale, would be any more a risk than, say, a personal loan for the same item... Eliminating the product can only be because of some other benefit garnered to the lending institution, as has been implied here in this thread...
Quote:
Originally Posted by drewprof
Dealers get kick back on points just like mortgage brokers
This collusion is nothing new! ...and it is
Lenders like dealerships because they are a constant revenue stream unlike individual that cost money to acquire through advertising and promotions. Dealers get kick back on points just like mortgage brokers; so when you think you haggled for that low price don't be surprised that they will rape you in financing. The dealer just like a mortgage broker has a rate sheet so he can price the loan to get some money in the back UP FRONT as soon as the loan is approved and signed/settled.
That is NOT collusion! That is common sense! And good business tactics besides...
If you buy a sub 20k new car with 0% (aka 0.9%) financing you will be ok. There will not be much depreciation and the loan institution cannot rape you too bad. Do it for the shortest period you can as well. This is all part of the American Socialization Plan. We have always thought that Europeans were smarter so now we get to live and drive pure shit like most of them. W. just accelerated the turn toward socialism as a reaction to his blatant back scratching and ignorant ideology. It is now up to the Democrats to further the turn by over reacting to W's fuck ups. Soon we will have more taxes to cover the debt, more dependence on banks, and far, far, more dependence on the federal gov't because we are whiny little bitches who are poorly educated and cannot see that this way is not the answer.
Start celebrating a little early did we? Rambling diatribes are a sure sign it is a holiday weekend.
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