The Best Car Finance Blog In The World

We are getting close to the day when the new Financial Conduct Authority (FCA) takes over from the Office of Fair Trading (OFT) and launches its new guidelines to the finance industry. The new rules will affect all parties involved in ‘consumer’ finance. At one end of the spectrum the new rules will affect consumers as well as non limited SME’s such as sole traders and small partnerships, in the same way as the Consumer Credit Act covers these entities at present.

Thinking of a change but unsure as to the best way to finance your car? Then you need a copy of my car finance book, Car Finance – A Simple Guide by Graham Hill. Click on the link below to buy the best car finance book on the market, available as a Kindle Book and Paper Back.

The rules will also affect every provider of ‘consumer’ finance. In the motor trade that will include the finance organisations as well as dealers, brokers and introducers such as accountants and IFA’s, all will be affected by the new rules which will come into force from the beginning of April 2014.

For those currently providing advice they should have applied and paid for ‘Interim Permission’ that keeps their Consumer Credit Licence active whilst the changes are introduced. If, whoever you are dealing with, doesn’t have interim permission they are trading outside the law. The problem is that we don’t yet know exactly what the rules will be, making it impossible to prepare for them.

One thing is for certain, we will have much stronger controls imposed upon applicants for finance to prove that they can afford the repayments. This raises two issues, the first goes to the core of the credit industry which is down to the judgement of the underwriter. The word affordability is used in the proposed regulations but what does it mean.

We are told that applicants will have to provide some form of affordability proof. This is likely to be an income and expenditure statement. But if you take a person who can demonstrate income of £1,000 per month with expenditure of £1,001,including his vehicle costs, does this mean that he fails the affordability test?

He is hardly likely to pop to the pub for a pint if it means he can’t afford the repayment on his car which he needs to get to work in the first place to earn his £1,000 per month. So it will be interesting to see how this pans out and what additional pressures are placed on those providing and wanting finance.

It is a bizarre situation when someone else has to tell me if I can afford a repayment on a car or not. Personally I would die of starvation before I would give up my car through non payment of the monthly lease. Which brings us to the next point. After carrying out a more substantial test on applicants for finance it is reasonable to assume that far fewer applicants will receive credit approval, otherwise what would be the purpose of the massive investment and the changes to legislation?

So let’s think about that. I have a client who applies for finance on a Ford Fiesta at a prime rate of £150 + VAT per month. Unfortunately he fails the affordability test so he is now forced to go down the path of sub prime lenders. The current rate is around £295 + VAT per month for the same car.

But the sub prime lender must surely apply the same affordability test or is it a little less stringent – in which case it defeats the objectives of making sure the client can afford to make the repayments in the first place. By making sure he isn’t offered finance at £150 per month how on earth is he likely to be able to make payments at twice the rate?

The whole thing is starting to look like a farce but very worrying at the same time. The only advice I would give at this stage is that if you are looking to change your car this year do it before April you could give yourself an awfiul lot of work and be badly disappointed! Watch this space. By Graham Hill

New moan started, a few years ago a journalist with about as much knowledge about all things financial as a garden fork started a blog. In fact it was started about the same time as I started mine.

The difference was that I didn’t allow every John Henry and his mate to post things on my blog, unlike my charismatic friend. If anyone wanted to post anything on my blog I would mediate and if what they wanted to post was incorrect or simply trying to sell their pet insurance policy I would trash it.

Thinking of a change but unsure as to the best way to finance your car? Then you need a copy of my car finance book, Car Finance – A Simple Guide by Graham Hill. Click on the link below to buy the best car finance book on the market, available as a Kindle Book and Paper Back.

On the other hand many other blogs would allow complete (but often well intentioned) doughnuts to express opinions online which others would then take as absolute gospel. For example I have seen someone desperate because they are facing a £1,500 charge to repair a PAS pump, 3 weeks after the manufacturer’s warranty has run out on his car, seeking advice because he’d been told the repair was outside the warranty and therefore fully chargeable.

As you know from postings on my blog this isn’t unusual. In this case the car had only covered 15,000 miles but some numbnuts said, oh dear, sadly as you are outside the warranty there is nothing you can do, chat to your bank manager and arrange a loan. Which is what the poor sod did!! So this ill informed do-gooder just cost the driver with the problem £1,500.

The truth is that under the Sale of Goods Act the driver had a legitimate claim against the supplying dealer as the goods have to be as described, fit for purpose and of satisfactory quality. The ABS pump should last as long as the car, at least 8 years, so the dealer should make at least some contribution towards the cost of repair as the item concerned would appear to not be of satisfactory quality.

Oh and notice I said dealer and not manufacturer, the claim is against the company that sold you the goods, not the manufacturer. It’s up to the dealer to seek compensation from the manufacturer. This is just one of many pieces of advice given by ignorant subscribers with no legal knowledge whatsoever.

Sometimes on this and other blogs the advice has been accurate at the time it was given in say 2009 but the law has since changed and the advice is now wrong. So if you are one of those people that searches through blogs for accurate information, tread very carefully, the advice you follow could cost you a fortune.

It’s about time that blogs were properly policed before too many people catch a serious cold. 2^nd moan over! By Graham Hill

Bits&Pieces: I think most of my readers know my feelings about statistics, most of them leave me scratching my head thinking – so what? Someone, whoever decided to carry out the survey, needs to get a life.

Thinking of a change but unsure as to the best way to finance your car? Then you need a copy of my car finance book, Car Finance – A Simple Guide by Graham Hill. Click on the link below to buy the best car finance book on the market, available as a Kindle Book and Paper Back.

For example did you know that Seat drivers are most likely to make an ‘at fault’ insurance claim? Really??? Oh there’s more, Kia and Mini owners were next most likely to claim with Subaru, Smart and Fiat owners putting in the least claims.

Astonishing or what? So who carried out this totally pointless survey? Money Supermarket that’s who. Totally bloody pointless – Money Supermarket – get a life!

The AA has warned that fuel prices are set to rise by 5p per litre over the summer months. Apparently petrol stations have already started to pass on higher wholesale prices to customers at the pumps.

They said that costs had already increased by 1p per litre in July – not at my bloody Tesco, more like 3p!

Who do you use to insure your car? Think twice about Swinton as they were fined £7.4 million for miss-selling policies between April 2010 and April 2012. They were found guilty of using an ‘aggressive sales strategy’  over the phone and failed to tell customers that some of the add-ons were optional extras.

I can see that it won’t be long before we start to see congestion charges in all towns and cities. Cambridge, who dropped the proposal for a congestion charge 3 years ago, are now considering this as an option to reduce traffic gridlock. Before going ahead they will need to convince local businesses.

With many 0% finance deals about, following the new registration launch, it is important to take note of the advice that I have given in my books and previous blog posts. That is to negotiate a deal on the car on which 0% finance is being offered as though you are a cash buyer. Get some extra discount on the car, a full fuel tank and maybe a few extras Read more »

I reported recently on clocking, it would seem that others are reading my blogs as the Office of Fair Trading has issued a report that reveals there are more than 50 firms in the UK selling mileage correction (clocking) services. As a result they have called on the Government to act and close the loophole that enables these companies to quite legally reset a Read more »

I’m actually in a state of shock – ish! Whilst thumbing through the advice pages of Autoexpress I noticed that someone had asked the question, should you blur out the car’s registration number when advertising your car online? Now this is something I’ve had an issue with for sometime. It seems quite obvious that you should blur out the number to me Read more »

It’s been a busy week this week, I attended a round table discussion hosted by Motor Finance, the journal of the industry and one for which I have written a regular column for many years. This was followed by the annual dinner of the Finance and Leasing Association (FLA), attended by 1400 guests, all movers and shakers in the finance and leasing industry. Recession – what recession? Anyway, going back to the round table, one of the main items on the agenda was the new EU Consumer Credit Read more »

After years of warnings in my newsletter and on my blog the British Vehicle Rental and Leasing Association (BVRLA) has acknowledged that there are crooks offering leasing online who con consumers and small businesses out of money. I have had countless letters and emails over the years from those that have leased vehicles saying that they have lost money by trusting online leasing providers who had great web sites and extremely friendly and helpful phone support. They certainly Read more »

Nissan ad execs must have been chuckling to themselves when they came up with the theme for their sports cars, the 370Z and the GT-R. They decided to take on the Germans, poking fun at their acceleration speeds, pointing out that the Z was faster than Audi, BMW and Porsche rivals. The posters read ‘Deutschland Deutschland Uber Rated’ while a blurred Read more »

Oh dear I’m not sure how this is going to go down with employees but it seems that there has been a bit of an upsurge in the provision of logos for company cars. In the past companies that run vans and trucks would use them as a mobile advertisements for their business but very few, other than estate agents and letting agents, adorn their cars with advertising logos. But just recently employees have been Read more »