Why Are Lending Interest Rates So High?

Wednesday, 20. July 2011

Hi, Graham Hill here, thank you so much for visiting my blog, I hope you learn a lot and as a result end up driving a great car. In order to do so you can get all the information you need by buying my book, An Insider Guide To Car Finance or use me to finance your next car. Happy driving.

Whilst I hear many a complaint in the pubs and bars about the fact that you aren’t charged the half percent bank base rate interest when you take a loan or HP, most people understand the reason why. If lenders were to charge half a percent interest they would soon go bust as that wouldn’t cover the cost of the documents let alone all the other costs from the wholesale cost of funds to the overheads involved in running the business and the increasing costs of defaults and arrears. However, there are other not so obvious costs that are on the increase and add to the general costs of running a finance house.

Take for example parking fines when a car has been dumped on yellow lines or left in a car park by the customer who can no longer afford it. The lender can apply for a return of goods order but there is still the outstanding fine to pay.

Or take a car that has been taken in for repairs, the customer can’t afford to pay and the car is retained by the repairer. Even though the lender may take out an order he will still have the repairs to pay for and potentially storage costs as well.

Even worse if the car is dumped on the side of the road and is stripped bare overnight. So you see, like those who have to pay increased insurance costs because others are having accidents the same applies to finance, part of what you pay in interest charges cover these additional costs to the lenders. By Graham Hill

Enhanced by Zemanta
Share My Blogs With Others: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • MisterWong
  • Y!GG
  • Webnews
  • Digg
  • del.icio.us
  • StumbleUpon
  • Reddit
  • Alltagz
  • Ask
  • Bloglines
  • Facebook
  • YahooMyWeb
  • Google Bookmarks
  • LinkedIn
  • MySpace
  • TwitThis
  • Squidoo
  • MyShare
  • YahooBuzz
  • De.lirio.us
  • Wikio UK
  • Print
  • Socializer
  • blogmarks

2 Responses to “Why Are Lending Interest Rates So High?”

  1. carl Says:

    I wish we could give an exact forecast on what next for the UK Interest base rate, but we can’t. You can however, arm yourself with the right information and views from those in the know by researching it online.

  2. Says:

    Hi Carl, yes it would be great if we could predict interest rate movements but I agree with your comment

Leave a Reply