shao_khan Posted February 27, 2008 Report Share Posted February 27, 2008 So I notice that after April 6th this year that there will be several changes coming into force as a result of the 2006 Consumer Credit act. Perhaps one of these with biggest impact on car buyers is the abbolition of the upper limit on what is deemed to be a regulated agreement - so the £25000 will disappear. (there are obviously certain provisos in this). SO do we think that this will have any impact on the lending schemes being offeredby motor manufacturers - after all with the removal of this limit then technically you could have voluntary termination at 50% on some very high value vehicles - I'd have thought the risk to the finance house of the higher cost vehicle is much greater - so will we see very high APRs - or just no change from existing? Link to comment Share on other sites More sharing options...
Gareth Posted February 27, 2008 Report Share Posted February 27, 2008 This change was going to happen in 2006 and it never happend. Again it was going to come into force last year, so from that you deduce that it is not 100% going to happen this year. However given the delay so far there is a reasonable chance it will (maybe!!) come into force in 2008 and as one result certain lenders are moving away from lease purchase balanced payment type of deals from Spring (e.g. Porsche finance/GE Capital Bank. Link to comment Share on other sites More sharing options...
Booster Posted February 27, 2008 Report Share Posted February 27, 2008 Gareth, It does come into force on 6th April this year. The only exception is where an individual declares themself to be "a high nett worth individual" and opts out of the protection of the Act. Now I can't see anyone (except a few pompous tw*ts) declaring I'm worth millions and don't want the Act to cover this agreement can you?? Link to comment Share on other sites More sharing options...
Mook Posted February 27, 2008 Report Share Posted February 27, 2008 SK, I guess some people will, but do you really want to try to exit an agreement and be faced with the repurcussions of this on your credit rating etc. TBH, I think people should buy what they can afford on finance, not the most expensive thing possible, but that's a topic for a whole otehr thread Link to comment Share on other sites More sharing options...
shao_khan Posted February 27, 2008 Author Report Share Posted February 27, 2008 Ah - but here is the thing - a voluntary termination under the terms should not adversly affect your rating. I dont think because you cant afford it - but because it no longer makes economic sence. Example. Late '04 B6 A4 sport - if you had one of these on a Audi agreement with a final ammount to pay, because of the depreciation this model suffered it might be once you were 50% of the way through worth your while just givign the car back because it is never ever going to be worth what you owed. Same might apply with R8 for example - V10 version released, Audi stop supporting V8 residuals and at 50% it makes more sence to give it back than continue paying for somethign that is dropping through the floor. Link to comment Share on other sites More sharing options...
Gareth Posted February 27, 2008 Report Share Posted February 27, 2008 [ QUOTE ] Gareth, It does come into force on 6th April this year. The only exception is where an individual declares themself to be "a high nett worth individual" and opts out of the protection of the Act. Now I can't see anyone (except a few pompous tw*ts) declaring I'm worth millions and don't want the Act to cover this agreement can you?? [/ QUOTE ] Well it might well be planned to come into force but that doesn't mean it will. As I mentioned this was signed off and meant to happen before but has been delayed for two years now....so in theory it could happen again. The three finance companies we work with are all waiting to see if it does 100% happen but do have contingencies if it does happen on the appointed date. Also I have tell you that you are wrong about the HNWI (high net worth individuals) as this will be an option for a great amount of clients, not just "pompus tw*** to use your words. And in fact this stipulation for underwriting has been in operation for a while now actually. Do you know what the definition actually is valued at??? Link to comment Share on other sites More sharing options...
Gareth Posted February 27, 2008 Report Share Posted February 27, 2008 [ QUOTE ] Ah - but here is the thing - a voluntary termination under the terms should not adversly affect your rating. I dont think because you cant afford it - but because it no longer makes economic sence. Example. Late '04 B6 A4 sport - if you had one of these on a Audi agreement with a final ammount to pay, because of the depreciation this model suffered it might be once you were 50% of the way through worth your while just givign the car back because it is never ever going to be worth what you owed. Same might apply with R8 for example - V10 version released, Audi stop supporting V8 residuals and at 50% it makes more sence to give it back than continue paying for somethign that is dropping through the floor. [/ QUOTE ] Under the current terms a VT will affect your credit rating but if these new regulations do come into force this April it is not clear what the directive will be for that option. Not sure I follow your logic on the R8 though How do or can Audi "support the residuals at 50%"??? Gareth Link to comment Share on other sites More sharing options...
shao_khan Posted February 27, 2008 Author Report Share Posted February 27, 2008 I wasnt saying they support them at 50% - I am suggesting they support them in some way - but once they stop someone with a regulated agreement having paid 50% might be as well givign it back rather than keep watching money disappear. Link to comment Share on other sites More sharing options...
shao_khan Posted February 27, 2008 Author Report Share Posted February 27, 2008 [ QUOTE ] Under the current terms a VT will affect your credit rating [/ QUOTE ] I disagree with that. Link to comment Share on other sites More sharing options...
gizze Posted February 27, 2008 Report Share Posted February 27, 2008 It does affect your credit rating, it is not a negative as such but it is listed and a lending house will always look at it as a negative when looking at your records. Link to comment Share on other sites More sharing options...
Gareth Posted February 27, 2008 Report Share Posted February 27, 2008 [ QUOTE ] I wasnt saying they support them at 50% - I am suggesting they support them in some way - but once they stop someone with a regulated agreement having paid 50% might be as well givign it back rather than keep watching money disappear. [/ QUOTE ] They don't support the RV's, just give an estimation for them. It is in the best interests of any lender to put an appropriate RV on the car being funded. Plus with the R8 I just don't buy this "V10 will kill the V8" values When the V10 does come out the heat (i.e. over list) will be gone for the V8 and it will assume a natural depreciation curve for the market. But will values collapse as some (not you specifically SK) have said/posted? nope! Link to comment Share on other sites More sharing options...
Gareth Posted February 27, 2008 Report Share Posted February 27, 2008 [ QUOTE ] It does affect your credit rating, it is not a negative as such but it is listed and a lending house will always look at it as a negative when looking at your records. [/ QUOTE ] Correct Link to comment Share on other sites More sharing options...
Gareth Posted February 27, 2008 Report Share Posted February 27, 2008 [ QUOTE ] [ QUOTE ] Under the current terms a VT will affect your credit rating [/ QUOTE ] I disagree with that. [/ QUOTE ] ok, but why? Link to comment Share on other sites More sharing options...
Mook Posted February 27, 2008 Report Share Posted February 27, 2008 All these bloody acronyms, guys! It's great to have some experts on here, but WTF is VT, RV etc.? Link to comment Share on other sites More sharing options...
shao_khan Posted February 27, 2008 Author Report Share Posted February 27, 2008 Personnal experience - made no difference at all. Link to comment Share on other sites More sharing options...
Gareth Posted February 27, 2008 Report Share Posted February 27, 2008 [ QUOTE ] All these bloody acronyms, guys! It's great to have some experts on here, but WTF is VT, RV etc.? [/ QUOTE ] VT - voluntary termination RV - residual value WTF - what the f*** are you waffling on about you twonk See H-A-P-P-Y to help Link to comment Share on other sites More sharing options...
Gareth Posted February 27, 2008 Report Share Posted February 27, 2008 [ QUOTE ] Personnal experience - made no difference at all. [/ QUOTE ] Unless you underwrote yourself (which unless you are in the finance business yourself is a little "tricky") how do you know that for a fact? I'm not saying you would be refused credit per se, but there is a note on the credit report and/or with the finance company that you had a VT and would therefore be deemed a less attractive prospect for the next agreement. It's a fact and if you think it isn't then you are incorrect I'm afraid Link to comment Share on other sites More sharing options...
Booster Posted February 27, 2008 Report Share Posted February 27, 2008 [ QUOTE ] Well it might well be planned to come into force but that doesn't mean it will [/ QUOTE ] I have it in black and white from our trade association, the CCTA and a bulletin update from our solicitors who specialise in finance that it does. Link to comment Share on other sites More sharing options...
shao_khan Posted February 27, 2008 Author Report Share Posted February 27, 2008 I suspect we'll see it coem april as well. Link to comment Share on other sites More sharing options...
Gareth Posted February 27, 2008 Report Share Posted February 27, 2008 [ QUOTE ] [ QUOTE ] Well it might well be planned to come into force but that doesn't mean it will [/ QUOTE ] I have it in black and white from our trade association, the CCTA and a bulletin update from our solicitors who specialise in finance that it does. [/ QUOTE ] This is the report we have in our office; http://www.oft.gov.uk/advice_and_resources/resource_base/legal/cca/CCA2006/Financial-limit/ I'm not saying it won't happen but just reminding you/people here that the exact same process happened in 2006 and 2007 but never was applied by the Government. It probably will happen this time however but my point is valid when you bear in mind what happened before. Link to comment Share on other sites More sharing options...
Gareth Posted February 27, 2008 Report Share Posted February 27, 2008 [ QUOTE ] I suspect we'll see it coem april as well. [/ QUOTE ] agreed. Link to comment Share on other sites More sharing options...
Mook Posted February 27, 2008 Report Share Posted February 27, 2008 [ QUOTE ] See H-A-P-P-Y to help [/ QUOTE ] TVM Link to comment Share on other sites More sharing options...
gizze Posted February 27, 2008 Report Share Posted February 27, 2008 [ QUOTE ] [ QUOTE ] See H-A-P-P-Y to help [/ QUOTE ] TVM [/ QUOTE ] Link to comment Share on other sites More sharing options...
Gareth Posted February 27, 2008 Report Share Posted February 27, 2008 TTFN Link to comment Share on other sites More sharing options...
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