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As we get closer to the time when the new Financial Conduct Authority (FCA) takes over control of the Consumer Credit Act it is important to make sure that you and your business, if you are an SME that isn’t a limited company, are in good shape for credit. In future lenders will want to carry out an ‘affordability test’ to ensure that you can afford your repayments.

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.

Whilst some lenders claim that their own affordability tests are already working well and therefore won’t change I personally think that you should assume that lending will tighten up, certainly in the short term. This strengthened affordability test may be in the form of an income and expenditure account or it may be copies of your last three months bank statements.

Whilst your income and expenditure report may show that you can afford repayments the one thing that will kill an application is a returned item shown on your bank statement, if asked for, because you have exceeded your overdraft limit or dropped into an unauthorised overdraft and the bank has not paid an item.

Having an overdraft that is being used isn’t a bad thing although it will probably knock a few points off your credit score but nowhere near as bad as having a returned item. So make sure that your last three months are clean. If not wait until any adverse drops off the last 3 months statements.

You can avoid a returned item if you cancel a direct debit before the money is applied for from your account but beware, this shouldn’t be a direct debit for finance, especially car finance, as a missed payment will show up as arrears. This is another situation that would cause finance to be refused.

You will also be asked for a copy of, or the original of, a current driving licence so make sure that you have both parts available, the paper and the plastic parts. Also make sure that if you have the newer licence that it hasn’t run out of date (has to be renewed every 10 years) and that it is showing your current address.

If you only have an old style licence then make sure that you have a current passport for photo ID to be provided at the same time. One of the issues I regularly address is the need by some funders to see a utility bill dated within the last 3 months. So if you are about to apply for credit make sure that you haven’t thrown away all of your bills as soon as you have paid them.

Mobile phone bills are never accepted and we are finding that fewer funders are now accepting credit card statements and council tax bills as proof of address. Landline telephone bills, water, gas and electric bills are all acceptable along with bank statements as long as they are paper statements not printed off the Internet.

In my book, Car Finance – A Simple Guide, I dedicated the first section to preparing for finance. Essential reading. Final piece of advice on the subject – if you are thinking of changing your car, do it now before the new rules kick in. By Graham Hill

Most people are aware that in order to be approved for finance you need to have a reasonably good credit score. You maintain a good credit score, as you know, by making credit payments on time (pay by direct debit wherever possible), not gaining CCJ’s, defaulting or going into arrears and not applying for credit to too many companies at the same time.

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.

Closing down old credit cards can also help. But I have had a few ‘declines’ just recently because of financial associations that, in a few cases, were no longer in existance. When you apply for credit you can only have your personal details searched so if you have a partner who has very poor credit or could even be bankrupt, they cannot be checked out unless you give permission or you have a financial association.

If you are shown to have a financial association with anyone the chances are that their credit status will also be taken into account. So if you are applying for finance and you and your partner have a joint mortgage or a joint credit card there is a financial association. One client had a girlfriend and they jointly applied for a credit card and were approved at the time.

They didn’t take out the card and split up shortly afterwards but one of them ran into some severe financial difficulties. As the financial association was still showing on the credit reference agency file the unknowing boyfriend was declined for car finance because of the difficulties experienced by the ex girlfriend.

So check your credit reference files and if you are showing any financial associations with any ex’s make sure you write to the credit reference agencies (all 3) and tell them that you no longer have any financial association with your ex, and to remove the link. By Graham Hill

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I guess with the cost of diesel so high it was inevitable that people would try to save money by buying dodgy fuel that has either been bought cheaply, as it was intended for use by farmers, and as a result it attracts less duty or it has been stolen from farms where fuel is less protected than filling stations.

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

According to HM Revenues and Customs the sale of illegal fuel is up by 48% and not just from ‘pop-up garages’ and ‘huckster sites’ but also regular filling stations. In the past it was easy enough to identify the dodgy fuel if it originated from a farm as it was dyed red. But to avoid detection the crooks have found a way to strip the red dye from the fuel using a concoction of chemicals.

This is all well and good but the chemicals they use can damage the engine. The damage is made difficult to detect as the effects of the chemicals can take months or even years to be noticed. HMRC has revealed that they found illegal fuel at 388 sites in 2012 compared to 262 in 2009/10.

Closed (Photo credit: Joe Dunckley)

Whilst is seems there has been a surge the HMRC believe that it has more to do with the detection rate rather than a substantial increase in use or theft of illegal fuel. You can draw your own conclusions, just be careful where you are buying your fuel from and what harm the fuel could be doing to your car. By Graham Hill

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• More garages caught selling illegal fuel (telegraph.feedsportal.com)

What car can do 0 – 60 in 5 seconds, return 15 miles to the gallon and out perform a Ferrari F40 away from the traffic lights? Answer, a company car, or so the old joke goes. These days company cars are much better cared for as transport managers and employers know that poorly cared for cars could result in end of contract charges.

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.

So buying what used to be a dodgy ex company car is no longer such a risk. But as one buyer of a used car from a BMW main dealer found out, buying a used car isn’t always as safe as it seems when he bought an M3 that had previously been used as a track car. There was nothing wrong with the car and it drove perfectly but you can only imagine the stresses and strains applied to that car whilst being hammered around a race track by a racing driver or instructor.

Of course the buyer was upset when he found out about the previous use of the car but there is no obligation on the part of the dealer to tell him that the car was used as a track car and I have to say an M3 was built as a performance car so should not be in the slightest affected by its previous use.

But there is one use of car that buyers actually queue up to buy without knowing how badly the car may have been criminally abused. Treated like a performance car from new with certain components stressed to their limit many buyers actually boast that they have bought one of these cars in preference to a brand new car.

I’m talking about the ex-demonstrator. I always advise against these awful cars which are often worse than ex hire cars and wildly over priced. Yes you appear to have a large discount but often that is after a load of unnecessary extras have been added to the car in order for the dealer to demonstrate.

So you have a £20,000 car with £5,000 worth of extras added with a £7,000 discount, dropping the price to £18,000 or the price you would have paid for a new car without the bigger wheels, sports suspension, special paint, larger fuel tank, privacy rear glass, smokers pack etc etc. So often the saving is not as it seems.

But that is minor compared to the real problem. In industry I was group general manager for a PLC with around 700 vehicles. When you run a fleet of that size you are provided with demonstrators every day of the week. It was nothing for a a couple of transporters to turn up with 20 cars from Astras to E Class Mercedes brand new with no miles on the clock.

They would be handed out to staff to use who would drive the cars like lunatics (I’m embarrassed to say I was one of them).  A driver would drive the car out of the car park getting close to 60mph out of the car in first gear. We didn’t care as they weren’t our cars and we justified the abuse by saying that the cars were being ‘put through their paces’ which is why we had the cars in the first place.

And this is the rub. People that buy ex demonstrators believe that they are buying a car that has been carefully driven by nervous drivers with a member of dealership staff sitting beside them, hardly getting above 30mph. The truth is that they are handed out to drivers for maybe 2 or 3 days at a time and the cars are ‘hammered’.

They come back, often in a disgraceful state but are repaired, professionally valeted and sold proudly as an ex demonstrator. My advice is leave them, you are potentially buying a disaster unless you like having a car that spends more days in a repair shop than out of it. By Graham Hill

Last year Direct Line carried out a survey into car vandalism and found it to be at epidemic levels. They found that most people (64%) that had their car vandalised knew the person who vandalised their car. They questioned offenders as well as victims and found an ex boyfriend or girlfriend to be the top target.

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.

This was followed by a current or ex boss and even the ex’s new partner! Next door neighbours or people living in the same road were also offenders. So much for the assumption that all vandalism was caused by testosterone charged young males high on Special Brew and crack cocaine! So what was the type of damage caused I hear you ask?

In top place is keyed or scratched paint, followed by damage to door mirrors then smashed windows. In fourth place is radio aerials snapped off then snapped windscreen wipers. Tyre slashing is in 6^th place, stolen badge next and in 8^th place smashed lights, in 9^th dents from Car Surfing (whatever that is) with graffiti or paint on car at 10^th. So there you have it, if you are going to fall out with any of the above make sure you lock your car away! By Graham Hill

Bits & Pieces: Ageism still exists it would seem! Insurance companies can still turn you down for insurance based on your age and this happened to over 100,000 last year. However, to help the elderly keep mobile the Government introduced a scheme that meant that if an insurance company would not provide cover due to age they must refer the driver to an insurer who will and apparently it worked as they are all happily still driving. Stop complaining about old drivers – you’ll be there one day!

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 those who enjoy the occasional spliff then jump into their car and weave their way home in the belief that they won’t get ‘done’, think again as the Government has announced an investment of £120,000 for cannabis screening devices to be installed into police stations in an effort to tackle drug driving. It is estimated that drug driving is responsible for 200 deaths on the road each year – no laughing matter.

On the earlier subject of age there are now over a million drivers on UK roads aged over 80 and amazingly there are 195 aged over 100. The Institute of Advanced Motorists added that older drivers are actually safer with fewer, in terms of percentage, having points on their licences. By Graham Hill

A couple of weeks ago I attended a conference, discussing the world and European car markets. One of the speakers said that he believed that the geeks would soon take over the car industry. We are already seeing Google developing a driverless car but unlike BMW and Audi, who are also developing driverless technology, the Google car will be packed full of amazing geek stuff.

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.

At the time I pretty much dismissed what was being said as pie in the sky and years away. Then I read about a new car stereo being launched by Alpine, the CDE-185BT. It looks like a normal stereo head (that’s the display to the uninitiated) but you then start reading what it can do. First off you can control everything with your smartphone.

It connects with facebook and keeps you up to date on the go. You don’t have to read anything it reads the updates out loud to you. You can even ‘like’ posts. Through its unique Tunelt feature you can custom tune from bass levels to speaker output and it can all be done via an app on your mobile phone, available as an Android or iPhone app.

You can stream music through Bluetooth, you can operate phone functions using hands free or talking through the head unit. There are loads of connection options through the front and rear of the unit. A USB connector is incorporated into the removable faceplate, ready to play music stored on a memory stick. There is also a 3.5mm mini jack aux input. The clever way that the unit is powered means it won’t switch off when the engine of a stop/start car switches itself off.

You can even buy extra cabling to connect up the unit to the car’s remote steering wheel controls. Finally it has variable RGB illumination. This means that you can have over 150,000 different lights behind the buttons and inside the two line LCD screen. And to think I thought it was just another stereo. Car manufacturers take note! By Graham Hill

One of the main reasons why drivers refuse to consider leasing as an option is the misguided mental evaluation of their car when they eventually part exchange for a new one. By the time reality hits them it is far too late because by the time they learn the truth the car is three years old and they have lost £’000s.

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.

Let me explain. I carried out a not too scientific experiment. I used as an example a Renault Scenic which cost about £15,000 brand new. I asked about 30 people, friends, relations, people down the pub etc. what the car would be worth when 3 years old with 30,000 miles on the clock. The answers ranged from £7,000 to £10,000 with the majority £8,000 – £9,000.

The actual value of that car in the trade and what would be achieved as a part exchange was just under £4,000. Now here’s the problem, when working out the potential cost over 3 years most of those asked would have said that the car would be worth around £7,000, which, after adding interest charges, having taken the car on HP, would have compared roughly with the lease costs over the same period.

However, the truth is that the resale or part exchange estimates were around £4,000 adrift making the lease option much more favourable but as I say you only find that out when you sell the car. Auto Express carried out a similar exercise when they recently asked 12 drivers what they believed their cars were worth (I don’t just throw these things together, it’s called planning) and they came up with similar findings.

They used the trade valuers CAP to come up with the valuations. Other than one lady with an 09 Focus who thought her car was worth £4,500 but in fact it was worth £5,500 all drivers over estimated their car’s true value. One driver with a BMW M3 Evolution was over £3,000 adrift with most other drivers around £1,000 to £2,000 over the true value.

Having said that most cars were 5 to 10 years old so you would expect the estimates to be a little closer to the truth. Philip Northard of CAP said that the reason why many drivers over estimate the value of their car is that when they check on sites such as Autotrader or notice a similar car on a dealer’s forecourt, the figures they see are retail figures and include the dealer’s margin.

Of course you won’t achieve these figures when you take your car into the dealer as a part exchange. The argument over expected future values won’t go away, I’m sure, but I thought it might be worth mentioning if you are considering leasing as an option, you take away all risk in the depreciation and don’t get disappointed when you aren’t offered what you thought your car was worth when you come to replace it. By Graham Hill

For years manufacturers have shared ‘bits; in order to keep costs down. Many vans have the same platform and various parts and until fairly recently you would see several makes of van coming off the same production lines in Southampton. Well now you are going to see the same sharing thing happening with sports cars.

Z4 Sdrive35i (Photo credit: kenjonbro)

Our dodgy weather in the UK means that sports cars will never sell in big numbers but as a nation of motor sports lovers we don’t like giving up sports cars altogether so we are seeing a few manufacturers joining forces to make sure the tradition continues. The first twins were the Toyota GT 86 and Subaru BRZ. Subaru supplied Toyota with its 2.0L Boxer engine as well as a modified version of its WRX platform.

When the new Mazda MX5 and Alfa Romeo Spider are launched later this year, whilst they will look wildly different they will share several common bits. Even further down the line Renault will be re-inventing its famous Alpine whilst Caterham will be producing its own version based on the same platform.

Both are likely to have the same powertrain and even be made at Renaultsport’s facility in France. But the really big news is that the new BMW Z4 is being developed with Toyota. And that Toyota will be bringing out its own version based on the same platform, powertrain and materials. I’m all for it if it keeps the sports car tradition going in this country.

It wouldn’t be Britain if you weren’t cruising around the M25 in the middle of January with the sun shining but minus 10 degrees centigrade and a little old couple in an MGB, muffled up to the nostrils comes racing past you with the hood down doing 95mph. Long may it continue for the nutters out there! By Graham Hill

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Bus Lane (Photo credit: didbygraham)

Years ago, at the age of 21, I worked for the International Perfume manufacturer Faberge as their cost and management accountant. For those old enough to know they were the creators of world changing Brut, the first ever unisex fragrance. One of the advantages of working there was access to cheap bottles of Brut and any other product they sold at the time.

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.

Perks of the job, in the same way that my dad and my brother in law received big discounts on air travel by working for British Airways. But what benefits do those men and women that drive around all day in dayglow cars with flashing blue lights all over them. Not many I would suggest.

They don’t even get to take the company car home for private use in the evening and weekend, the wife might not agree but the kids would love it. One of the few benefits I can see is that motorists seem to get out of the way when they see a police car waiting to move into traffic or are cruising through the centre of town.

You might also assume that they have free access to restricted areas where only busses, taxis and cyclists are allowed and of course bus lanes. After a busy day of chasing around after cracked up 15 year old joy riders, stopping robbers who are likely to pull out a sawn off shotgun from under their seat after being forced to stop by one of these brave boys and girls in blue, you would think that they are entitled a little bit of privilege, such as nipping down a bus lane in order to get home to their bangers and mash.

If you thought that and you live in Birmingham you would be wrong. Birmingham City Council actually send out fines to the police for improper use of their bus lanes. Have you ever heard of anything so amazingly bloody ridiculous. Since last September more than 400 notices were served on the police amounting to £24,000 after putting up signs barring all vehicles, other than buses and taxis of course.

They then used CCTV to catch those driving down the bus lane and issue £30 fines that double after 14 days. So far about a quarter of the tickets issued to the police have been cancelled as the police have proven that the cars were on emergency calls. They have had to use valuable resources to prove that the car was on a shout at the time.

The police have also confirmed that they will be looking into all remaining fines to see if the car was on an emergency call. WHAT??? Instead of stopping villains from duffing up old people and nicking their life savings the police will be busy checking their telemetrics and video footage to see if the drivers were on emergency calls at the time of being caught in a bus lane.

Is it me? Please tell me it’s not me that doesn’t get it? Whoever is responsible in the council for this ridiculous situation, and I don’t care whether you are a man or woman – you are a total knob! By Graham Hill

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