Senin, 30 Juni 2008

FEATURE: Loan problems inhibit growth of Chinese car market

BEIJING, June 8 Kyodo

It's hard to get a loan to buy a car these days in Guiyang.

A few major state-owned commercial banks in the Guizhou provincial capital were forced to largely reduce the number of loans they grant for the purchase of motor vehicles due to the high percentage of borrowers defaulting, according to Xinhua News Agency.

Under Chinese law, banks can only begin moves to collect outstanding amounts if a borrower has not paid back the principal and interest three months after the date of a loan's maturation.

Before the Chinese New Year in January, the Guizhou branch of the Industrial and Commercial Bank of China used legal channels to collect payment from dozens of debtors. However, past-due loans have continued to pile up ever since.

As a result, all but one of the bank's branches in Guizhou that previously offered auto loans have stopped the service, and the sole survivor screens all applicants. The only branch of the Construction Bank of China in Guizhou that offered car loans has also stopped.

No official figures are available for the rest of the country, but banking sources suggest the Guizhou problem is not unique.

As to why this should be, they suggest the main problem is that car ownership is now very much a fad and a lot of people have been lured by cheap credit into buying a vehicle they can't afford.

Taking out a loan in China is always a headache, but a recent survey suggests 35% of people in the market to buy a car would not even consider using credit.

Most of the people who said they would be willing to consider a loan still described bank terms as unsuitable. Of those in the unwilling category, 31.3% thought the down payments were so high they might as well pay full price. In addition, 64% thought the terms of loans for medium-sized sedans were too short -- only three years -- and the monthly payments and interest rates too high.

A total of 65.5% thought the loan procedures were too complicated. And 68% said they abandoned car purchases midstream because they could not find guarantors required by the banks.

Some experts have suggested interest rates should be lowered and loan procedures simplified, but the experiences in Guizhou suggest banks might not find the argument convincing.

At the same time, there are suggestions government policies are largely to blame, not banking procedures.

With the focus of the auto market switching increasingly to cheaper compact models, on the surface it appears that cars are becoming more affordable to a broader range of Chinese consumers.

Prices will drop further when China joins the World Trade Organization (WTO) and has to cut its tariffs on auto imports from 70% to 80% to 25% by mid-2006.

Yet, despite a 32% increase in sales during the first quarter of this year over the same period in 2000, industry insiders insist cars may still remain out of reach for many consumers unless the government lifts the levies that have kept prices among the highest in the world and stunted the growth of the domestic industry.

Although automakers have made numerous small price cuts in recent years, these have done little to stimulate the market. A Honda Accord rolling off the assembly line of Guangzhou Honda right now is priced at more than 360,000 yuan ($43,000). A similar model costs about $23,000 in the U.S., where average wages are far higher.

Manufacturers feel they are victims of government policies, such as the 3% to 8% consumption tax and a 10% car purchase tax that has to go on top of the factory gate price.

These taxes have seriously dampened consumers' enthusiasm and depressed the market; as a result, say the manufacturers, they have been unable to expand production significantly or cut prices.

According to Zhong Yongjiang, vice president of First Automotive Works Volkswagen: ''We must maintain a high profit margin to get enough money for product development because of an inert market.''

Domestic production capacity exceeds 1.4 million cars a year, but annual sales linger between 600,000 and 700,000 units, less than half the yearly output of a medium-sized international carmaker.

The problems created by nationally imposed taxes are compounded by local arbitrary charges averaging 15% to 40% of the price of a car. In Wenzhou, Zhejiang Province, for example, local taxes and fees nearly double the price of a vehicle.

According to the China Institute of Auto Economic and Technical Information, in 1999 the taxes and fees imposed by central and local governments exceeded 160 billion yuan, compared with profits of less than 5.8 billion yuan for all domestic automakers.

Chinese carmakers acknowledge that competing in the international market will be impossible if prices remain high after the country joins the WTO. But they believe they need to drop prices step-by-step rather than overnight to ensure funds are available to develop new models.

To stimulate the market further, Li Jingsheng, the auto institute director, urged the government to reduce the burdens on consumers. He called for policies that would encourage private car buying and create a favorable environment for the market.

This did not mean the government should force carmakers to cut prices, but the companies should be able to decide prices for themselves in a market-driven economy.

His call was echoed by Jia Xinguang from the China National Automobile Consulting and Development Corp., who suggested taxes should be lowered and all arbitrary fees on consumers removed to encourage car buying.

Li Anding, a senior auto analyst from Xinhua, said: ''Chinese families cannot be deprived of the right to enjoy modern mobility, and the government has a responsibility to help them realize their dreams.''

Bibliography for "FEATURE: Loan problems inhibit growth of Chinese car market"

View more issues: May 28, 2001, June 4, 2001, June 18, 2001

"FEATURE: Loan problems inhibit growth of Chinese car market". Asian Economic News. June 11, 2001. FindArticles.com. 16 Jun. 2008. http://findarticles.com/p/articles/mi_m0WDP/is_2001_June_11/ai_75504618

Minggu, 29 Juni 2008

AAA offers 15-second car loans through Internet

The American Automobile Association is using the Internet to deliver the world's fastest car loans - in as little as 15 seconds in some cases. Through a program that went nationwide last October, AAA gives car loans through its web site at http:// www.financial.aaa.com.

Members of Triple A can log onto the site, enter their social security number and other personal information, and apply for a loan. The process takes about 15 minutes. After submitting the request, a response comes back, sometimes within as little as 15 seconds. It the answer is yes, the borrower goes to their nearest AAA office to get their check. Triple A has 106 offices around the country that have the equipment to print such checks. Tripe A told the Associated Press that about 20 percent of loan applicants receive approval in 15 seconds. Other applicants receive a reply of "maybe," and are asked more questions. Some applicants are simply denied.

The interest rate varies according to the borrowers situation. PNC Bank of Pittsburgh provides the loan funds.

Triple A has 41 million members in the United States.

Weiss Publishes

Final Results Of Y2K Survey

Weiss Ratings Inc., of Palm Beach Gardens, Fla., released its nationwide survey of banks for Y2K readiness. The rating organization declared that 247 of the 1,128 banks that responded to its survey have taken "inadequate" steps to prepare their computer systems for the onset of the new millennium. Of the 247 banks, 195 received a rating of "below average" and 52 received a rating of "low."

These ratings are largely meaningless, but Weiss Ratings is seeking broad publicity for its survey results. Martin D. Weiss, chairman of the company, notes that more than one-third of the banks that responded to the survey said they had not tested and fixed all mission-critical systems by Dec. 31, 1998. Weiss said he believes these results conflict with information released by the FDIC which says all but 2.9 percent of the nation's banks had received "satisfactory" Y2K ratings by the end of 1998.

Weiss also reported that 177 institutions received a "high" rating for Y2K preparedness. About 62 percent of the respondents received the firm's "average" designation. Although Weiss does not refer to the 9,578 financial institutions that did not respond to his survey, he said in a Feb. 10 press release that "we must assume that, on average, institutions that did not respond to our survey are more likely to be late in fixing their Y2K problems than those that did."

The March 8 press release included a list of the 10 largest banks in the survey to receive a "high" rating. Included are the First Citizens National Bank of Mason City, Iowa and the Security National Bank of Sioux City, Iowa. A list of the 10 largest banks receiving a "low" rating includes one bank from Minnesota and one from Illinois. All of the banks on the list for "low" rated banks reported they expect to have testing and remediation for mission critical systems completed by June 1999.

Articles Provide Fodder For Merging Trade Groups

The two articles that appear on the front page of the Star Tribune's March 10 business section provide fodder for bankers who want to see the state's two banking trade groups merged. The prominent articles regurgitate the tired old consumer complaints about high-priced ATM transactions. The reporters talked to lots of whining consumers, but they only talked to the state's three largest banks: U.S. Bank, Norwest and TCF. One of the articles declares "warm and fuzzy banking is all but gone.

It is clear that reporters only see banking as an industry made up of the very largest institutions. Even though there are dozens of community banks serving the Twin Cities, none was acknowledged in the article. Community bank customers know "warm and fuzzy banking" is not gone in the Twin Cities.

It was interesting that neither article included any mention of the Minnesota Bankers Association nor the Independent Community Bankers of Minnesota. There were no quotes from the leaders of these organizations.

What these articles made clear to me is that the largest banking companies in the state have no problem getting their opinion across. But the opinion of the community banker is going completely ignored. These are the people who need an effective organization to represent them before the media and lawmakers. (Interesting that the articles appeared while the legislature is considering legislation to ban ATM fees.)

The largest banks clearly don't need an association to get reporters to listen to them, and community banks clearly need an effective organization to get their voice into the public square. So if the state trade group is looking for a purpose and the independent trade group is looking to build a little more clout, it seems a merger might make some sense.

Changes At Riverside Bank Will Be Worth Watching

It will be interesting ta note changes at Riverside Bank under its new ownership. Associated Banc-Corp of Green Bay, Wis., announced it will purchase the $331 million Minneapolis-based bank in the third quarter. David Cleveland will remain the bank's president and CEO.

Although Associated promises to bring the bank - which has five offices in the Twin Cities - more products and services, bank customers have to wonder if the bank will be able to maintain its independent nature. Will the environment change under the new ownership? Will the bank be able to maintain the growth it has experienced in recent years? (Riverside's assets have grown 84 percent since 1995.) Time will tell.

Bibliography for "AAA offers 15-second car loans through Internet"

View more issues: Jan 16, 1999, Feb 27, 1999, Apr 24, 1999

"AAA offers 15-second car loans through Internet". Northwestern Financial Review. Mar 27, 1999. FindArticles.com. 16 Jun. 2008. http://findarticles.com/p/articles/mi_qa3799/is_199903/ai_n8840122

Sabtu, 28 Juni 2008

Loan terms stretch as new-car prices rise

First comes sticker shock.

Then comes loan shock.

If you want to buy a new car soon and will need financing to help pay for it, the chances are 3 in 4 that you'll still be paying off that loan into the 21st century.

New-car loans, which once ran three or four years, now stretch five, six, even seven years.

At Bank One Milwaukee, which makes more auto loans than any other bank in the state, 73% of all car loans are for five years or longer, said Dave Frank, vice president for auto-dealer financing.

The reason is simple: New cars cost a whole lot more than they used to.

The average cost of a new US-made car has jumped more than 30% since the early 1980s, after adjusting for inflation, according to the US Commerce Department. And the cost of foreign cars has soared more than 70% in the same period, in inflation-adjusted dollars.

The average new car now costs more than $20,000, more than half the average family's annual income, up from one- third of family income two decades ago, according to US government figures. So the only way to make new cars affordable is to stretch out the loan.

The third-grader who helps you pick out the color of your new car this year may be behind the driver's wheel before the last payment is made. Leasing, Truck Sales Boom

And that's why the market for buying new cars has stalled badly.

The big switch is to leasing.

"Leasing has gone from 8% to 10% of our business a couple of years ago to almost half of our business now," said Tom Bonesho, vice president of the Boucher Group, which owns 10 auto dealers in southeastern Wisconsin.

A car that would cost $300 a month on a 60-month loan will cost $235 monthly on a 36- month lease, he said.

The downside: With leasing, payments never end.

The upside: Monthly payments are less, and you turn the car in before having to make the first big round of investments, on things like tires and brakes.

Nearly 1 in 4 new cars sold in Wisconsin are leased to a consumer rather than sold outright, said Steve Drew, an analyst with Automotive Directions, a market research firm based in Madison. The proportion of leases is growing rapidly, he added.

Annual new-car sales in Wisconsin fell 17.1% in the past five years, to 148,209 last year, according to the state Department of Transportation.

Considering the fact that those figures don't distinguish between new cars sold outright and the rapidly growing proportion of new cars that are leased, one concludes that the number of outright sales of new cars is falling sharply.

In some cases, consumers are switching from cars to small trucks. Annual new-truck sales in the state rose 24.4% from 1989 to 1994, to 125,710.

"Sport utility vehicles $26,000 to $32,000 that market's booming," said market analyst Drew. Shift Toward Used Cars

But even when truck and auto sales are combined, the long- term trend is down, despite the boom in small trucks and leasing.

People in the business of selling and financing cars say there's a shift toward used cars, partly to offset the high cost of new vehicles and partly because improved quality has made people more comfortable buying used.

Indeed, sales of used cars and trucks grew 2.2% in the past five years, compared with a 2.1% drop in the sale of new vehicles, which includes the surging lease market.

But trends in used-car sales differ sharply in locations around the state.

In Waukesha County, for example, there's no difference between the increase in sales of new compared with used vehicles, according to Automotive Directions.

But in Milwaukee County, there was a big jump last year in sales of used cars and trucks compared with sales of new cars and trucks. Used-vehicle registrations jumped 10.3% in the fourth quarter of the year, while new-vehicle registrations rose only 3.4% for the year.

Bibliography for "Loan terms stretch as new-car prices rise"

View more issues: Jan 27, 1995, Jan 28, 1995, Jan 30, 1995

JACK NORMAN "Loan terms stretch as new-car prices rise". Milwaukee Journal, The. Jan 29, 1995. FindArticles.com. 16 Jun. 2008. http://findarticles.com/p/articles/mi_qn4207/is_19950129/ai_n10183050

Jumat, 27 Juni 2008

Banks offer cut-price car loan deal to Rover workers

MG Rover workers who faced having to use their redundancy money to pay off loans on cars bought from the collapsed company were yesterday offered a deal which will save them thousands of pounds.

But the banks that financed the loans, HBOS and Lloyds TSB, are likely to end up out of pocket.

On a visit to the West Midlands yesterday, the Chancellor Gordon Brown announced that Rover's administrators, PricewaterhouseCoopers, had reached an agreement with the banks to ease the plight of hundreds of affected Rover employees. They can hand the car back with the loan written off, buy the car at a heavily discounted price or agree a new loan based on the current value of the car.

Many employees bought the cars for family use. But some took advantage of the cut-price deals on offer originally to buy two or three vehicles as a way of making some quick money.

Separately, HBOS, through its subsidiary Capital Bank, held a meeting with the MG Rover dealer council yesterday to thrash out an agreement to reduce their financial exposure. Dealers have complained that thousands of unordered cars were forced on them by the manufacturer at full price as it slid closer to collapse. The dealers have been left having to pay interest charges to Capital Bank on the unsold cars.

HBOS and the dealer council said progress had been made although a settlement has not yet been reached.

Bibliography for "Banks offer cut-price car loan deal to Rover workers"

View more issues: Apr 26, 2005, Apr 27, 2005, Apr 29, 2005

Michael Harrison "Banks offer cut-price car loan deal to Rover workers". Independent, The (London). Apr 28, 2005. FindArticles.com. 16 Jun. 2008. http://findarticles.com/p/articles/mi_qn4158/is_20050428/ai_n14603627

Kamis, 26 Juni 2008

'King of Car Loans' sticks to his guns

HAYWARD -- He carries a 12-gauge Mossberg shotgun, calls himself the "King of Car Loans" and promises to "blow away" the competition.

If he were standing on Mission Boulevard, Mike Fraga would probably get arrested. But since his larger-than-life image is just a character in a billboard advertisement, there's not much Mission Boulevard commuters can do if his gun-toting stance offends them.

They can shake their fist, maybe, or call the Discovery Bay resident's toll-free number to complain.

"It is not my intention to offend anybody," Fraga told a reporter who called the number last week. "If you want to make an article about it, it's just going to help me because advertising is so expensive. ... It's going to make me more popular."

The billboard, and Fraga's refusal to have it taken down without financial compensation, has made some Hayward residents furious.

"I looked at it and I was so shocked," said Diana Schaufler, a South Hayward resident. "I've never seen a billboard like that, and it made me really angry. I just thought, 'What kind of message is this?' It isn't funny."

Schaufler said she found the sign particularly troublesome because residents have fought hard to expel gangs and gun-related violence from the area.

"This was certainly not the area to glorify guns. Not that any place is, really," Schaufler said. "To just make this so cool is extremely upsetting. There has to be another way to advertise you have good loan rates for cars other than holding a shotgun and saying you're going to blow everybody away."

Fraga has been featured on the billboard just north of the Tennyson Road intersection for a while, but he changed the artwork last month because the previous billboard -- showing him sitting at a desk -- was not getting enough customers.

The theme of the new billboard is the same as his latest television commercial, which shows him pulling up to the Dublin Buick-Pontiac-GMC dealership in a large SUV. Flanked by two sunglass- clad women, the fast-talking Fraga proclaims his business prowess and cocks his weapon.

Fraga said most comments he has received about the commercials and billboard have been positive.

"Nobody's really looking at that picture and causing crimes," he said.

After a Chavez Middle School teacher tipped off Hayward City Manager Jesus Armas to the billboard last month, Armas called Fraga to tell him the sign was "inappropriate" and urged him to replace it.

Because of constitutional free speech protections, Armas said, the city has no control over the content of advertisements.

City officials battled the billboard industry in the 1980s. Some city leaders wanted the big signs removed from residential and commercial areas and relegated to freeways.

Their effort didn't quite succeed, though a compromise policy prohibits new billboards under most circumstances. And if a billboard is torn down or removed, it cannot be replaced.

Fraga said his sign, which is his only billboard, automatically expires in May. He said he would consider changing it beforehand, but it costs $2,100 a month to maintain and $1,600 to change.

Many car dealerships sport "special finance" managers who review customers' credit, particularly when they have bad or no credit, then direct them to a car they can afford with the help of loans.

Fraga, who describes himself as a "very special finance manager," has jumped from one car dealership to another over the years and no longer works with Dublin GMC, the dealership advertised on the Hayward billboard.

Managers at Dublin GMC did not return calls for comment, but an employee confirmed Fraga stopped working there a couple of weeks ago.

Fraga said the sign is simply an extension of the persona he has spent nearly 15 years building up. Years ago, he grew friendly with former radio personality Chuy "Chewy" Gomez and began making a name for himself on local stations and television, he said.

"My only way of surviving is word of mouth."

Matt O'Brien can be reached at (510) 293-2473 or mattobrien@dailyreviewonline.com.

c2007 ANG Newspapers. Cannot be used or repurposed without prior written permission.
Provided by ProQuest Information and Learning Company. All rights Reserved.

Bibliography for "'King of Car Loans' sticks to his guns"

View more issues: Jan 20, 2007, Jan 21, 2007, Jan 23, 2007

Matt O'Brien "'King of Car Loans' sticks to his guns". Oakland Tribune. Jan 22, 2007. FindArticles.com. 16 Jun. 2008. http://findarticles.com/p/articles/mi_qn4176/is_20070122/ai_n17149064

Rabu, 25 Juni 2008

Hayward 'car loan king' sticking to his guns

HAYWARD -- He carries a 12-gauge Mossberg shotgun, calls himself the King of Car Loans and promises to "blow away" the competition.

They can shake their fist, maybe, or call the Discovery Bay resident's toll-free number to complain.

The billboard, and Fraga's refusal to have it taken down without financial compensation, has made some Hayward residents furious.

"I looked at it and I was so shocked," said Diana Schaufler, a South Hayward resident and member of the nearby United Church of Christ Hayward. "I've never seen a billboard like that, and it made me really angry. I just thought, 'What kind of message is this?' It isn't funny."

Schaufler said she found the sign particularly troublesome because residents have fought hard to expel gangs and gun-related violence from the area.

"We'll put our car loan money where our mouth is," he declares on the TV spot. In an interview, Fraga said most of the comments he's received about the commercials and billboard have been positive.

"Nobody's really looking at that picture and causing crimes," he said.

After a Chavez Middle School teacher tipped off Hayward City Manager Jesus Armas to the billboard last month, Armas called Fraga to tell him the sign was "inappropriate" and urged him to replace it.

Because of constitutional free speech protections, Armas said, the city has no control over the content of advertisements.

Fraga said the sign is simply an extension of the persona he has spent nearly 15 years building up.

"My only way of surviving is word of mouth," he said

"The only thing we could arguably regulate is the land use," Armas said.

City officials battled the billboard industry in the 1980s. Some city leaders wanted the big signs removed from residential and commercial areas and relegated to freeways.

Their effort didn't quite succeed, though a compromise policy prohibits new billboards under most circumstances. And if a billboard is torn down or removed, it cannot be replaced.

Most big signs in Hayward don't garner any controversy: Billboards currently propped up around the downtown area advertise Chabot College, Kohl's department store and Mel Gibson's "Apocalypto" movie, which is rated R for graphic violence.

In 2004, substance abuse prevention groups and Latino activists fought to remove a billboard for Tecate beer that had the words, "Finally, a cold Latina." The distributor agreed to take down both the Hayward sign and others across the country.

Fraga said his Mission Boulevard sign, which is his only billboard, automatically expires in May. He said he would consider changing it beforehand, but it costs $2,100 a month to maintain and $1,600 to change.

Many car dealerships sport "special finance" managers who review customers' credit, particularly when they have bad or no credit, then direct them to a car they can afford with the help of loans.

Managers at Dublin GMC did not return calls for comment, but an employee confirmed Fraga stopped working there a couple of weeks ago.

Matt O'Brien can be reached at (510) 293-2473 or mattobrien@dailyreviewonline.com.

c2007 ANG Newspapers. Cannot be used or repurposed without prior written permission.
Provided by ProQuest Information and Learning Company. All rights Reserved.

Bibliography for "Hayward 'car loan king' sticking to his guns"

View more issues: Jan 20, 2007, Jan 21, 2007, Jan 23, 2007

Matt O'Brien "Hayward 'car loan king' sticking to his guns". Oakland Tribune. Jan 22, 2007. FindArticles.com. 16 Jun. 2008. http://findarticles.com/p/articles/mi_qn4176/is_20070122/ai_n17149039

Selasa, 24 Juni 2008

$4M loan to car dealer on hold

SAN MATEO -- A plan to loan the owner of a car dealership $4 million to open needs further study, City Council members agreed Monday.

Under the proposal, the city would take the sales tax revenues generated by a new Ford dealership on San Mateo Drive and loan them back to the owner for 12 to 14 years to help the business get off the ground.

At a study session, council members expressed some confusion over how the deal would be financed and questioned whether an auto dealership is the best use for the site, just south of Burlingame's Auto Row.

The 3.2-acre lot at 800-880 N. San Mateo Drive has been vacant since the Shen Chevrolet dealership went out of business several years ago. In that time, two development schemes, one to build a grocery store and retail complex and the other to construct residential housing, have been rejected by the Planning Commission.

Robert Branzuela, who owns a Mitsubishi dealership at 885 N. San Mateo Drive, wants to establish a Ford dealership at the site but needs financial assistance to do it. If the plan is approved, the city would loan Branzuela about $300,000 a year until the sum reached $4 million, at which point he would begin to pay the city back in installments.

"We're not putting any city dollars at risk," City Manager Arne Croce said of the loan, which would be backed by Ford Motor Co. "We will be loaning money that we would not have in the absence of this project."

Croce added that this could be the city's last chance to install an auto dealership at the site.

But Vice Mayor Jack Matthews said he does not believe a car dealership would represent the "highest and best use" of the lot, which is expected to sell for about $12 million, since a residential development would bring in about $10 million more in sales tax revenue over 20 years.

Matthews said the proximity of the site to the Burlingame Caltrain station makes it ideal for transit-oriented housing.

But Mayor John Lee pointed out that, with several major housing projects underway, including the second phase of the Bay Meadows redevelopment, the city's need for housing may not be acute.

"There's an awful lot of housing being developed in this city," Lee said. "I'm worried about our commercial business."

Lee said another advantage to using the site for an auto dealership is that it could be operational within a year, whereas an apartment complex could take five years to complete.

Lee and Councilwoman Carole Groom said they were concerned about what would happen if the Ford corporation, which recently slashed jobs in the face of slumping revenues, defaulted on the loan. Both said they would like to use bonds to minimize the city's risk.

The council concluded the session by directing staff members to assess what the best use of the land would be and develop a more thorough analysis of how the proposed deal would be financed.

Staff writer Aaron Kinney can be reached at (650) 348-4302 or by e-mail at akinney@sanmateocountytimes.com.

c2006 ANG Newspapers. Cannot be used or repurposed without prior written permission.
Provided by ProQuest Information and Learning Company. All rights Reserved.

Bibliography for "$4M loan to car dealer on hold"

View more issues: Nov 5, 2006, Nov 6, 2006, Nov 8, 2006

Aaron Kinney "$4M loan to car dealer on hold". Oakland Tribune. Nov 7, 2006. FindArticles.com. 16 Jun. 2008. http://findarticles.com/p/articles/mi_qn4176/is_20061107/ai_n16823133

Senin, 23 Juni 2008

Abbey offers loans to Rover car buyers

MG ROVER, the car maker, won a significant vote of confidence yesterday from Abbey National when the mortgage bank agreed to provide finance to support its dealer network in a multi-million pound deal.

Under the agreement, Abbey National's motor vehicle finance division, First National Motor Finance, will provide car loans to retail customers buying through MG Rover's 300-strong UK dealer network.

The finance was previously provided by BMW, the German car maker, which sold Rover to the Phoenix consortium last May for pounds 10. MG Rover is still attempting to extract more money from BMW in addition to the pounds 500m dowry the German company gave Phoenix on completion of the deal.

MG Rover argues that it is entitled to compensation because of the falling value of the stock of unsold cars it inherited as part of the sale. But BMW has told the British company that there is no more money.

A survey published yesterday said that new car prices fell by a record 12.2 per cent in the year to November. However, Alliance & Leicester, which carried out the survey, added that the decline in prices would soon begin to slow down because of the fall in the pound against the euro and economic uncertainty.

MG Rover is also struggling in its attempts to persuade BMW to sell it the engine and gearbox manufacturing facilities at Longbridge, known as Midlands Powertrain. BMW is thought to be under pressure from Ford to find an alternative buyer. Ford, which also buys engines from Midlands Powertrain for its Land-Rover unit, is concerned about the long-term prospects for MG Rover.

Similar worries have put back the sale by BMW of the Swindon body panels factory, which counts MG Rover as its biggest customer.

Mayflower is among possible bidders for the business, thought to be worth between pounds 80m and pounds 100m. The sale had been due for completion this month, but it now looks likely to be delayed until the spring, according to potential bidders.

Bibliography for "Abbey offers loans to Rover car buyers"

View more issues: Jan 8, 2001, Jan 9, 2001, Jan 11, 2001

Michael Harrison Business Editor "Abbey offers loans to Rover car buyers". Independent, The (London). Jan 10, 2001. FindArticles.com. 16 Jun. 2008. http://findarticles.com/p/articles/mi_qn4158/is_20010110/ai_n9664902

Minggu, 22 Juni 2008

Merrill moves into securitized car loans - Money Matters

Merrill Lynch Financial Assets has begun offering investors the ability to invest in securitized car loans.

Similar to mortgage-backed securities, which securitize commercial real estate, Merrill is packaging car loans and selling them as fixed income investments. The loans are securitized by AmeriCredit Canada, which has been originating car loans in Canada since 1998. Out of these loans, Merrill will offer five securities with ratings ranging from AAA to BBB. Investors are also offered a floating rate certificate with a term of less than one year to maturity. The interest rate on the securities is set above the rate on three-month bankers' acceptance. Presently, AmeriCredit will do two securitizations a year.

Bibliography for "Merrill moves into securitized car loans - Money Matters"

View more issues: April 2002, May 2002, July 2002

"Merrill moves into securitized car loans - Money Matters". Money Digest. June 2002. FindArticles.com. 16 Jun. 2008. http://findarticles.com/p/articles/mi_m0JQR/is_6_17/ai_87456926

Sabtu, 21 Juni 2008

People's Alliance offers more convenient car loan

It's not a drive-through loan, but credit unions say that it's at least a more convenient way to obtain a car loan.

The People's Alliance Federal Credit Union has signed on with GrooveCar Inc. for a program allowing its members to close car loans on the spot at about 50 auto dealerships on Long Island.

The move, the credit union said, is expected to boost its auto loan business by offering the convenience of quicker loans. Members will no longer have to stop by a branch to get an auto loan, as they had to do earlier.

Nearly 20 credit unions on Long Island, from Bethpage Federal Credit Union to Teachers Federal Credit Union, already have signed on for the program.

"It will help our members obtain auto financing quicker. Auto buying is usually impulse," said Nick Lacetera, president and CEO of the credit union, in Hauppauge. "It can put us face-to-face with our members, while they're purchasing a car."

The Hauppauge-based non-profit, originally the credit union for Pan American World Airways, diversified in the early 1990s as Pan Am ran into problems.

People's Alliance, which has about $165 million in assets, currently has only about $15 million in car loans, a small amount. But in its first few weeks with the system, Lacetera said, it closed nine auto loans it otherwise might have lost.

"This will help us grow," said Lacetera, noting the program is the first time People's Alliance has been able to make a big push for car loans. "This is just starting up."

Carmakers have long had an upper hand through their own lending programs, such as General Motors Acceptance Corp. and Ford Motor Credit. And many banks and finance companies developed relationships with dealers.

But credit unions have had a tougher time breaking into the market. That's changing, in part, due to GrooveCar's system, according to various credit unions.

When dealers sign on for GrooveCar's Credit Lend Union Lending Plus, they also agree to ask potential car buyers whether they belong to a credit union. That sets the wheels rolling for a loan that might otherwise have gone to another institution.

"At that point of time they're offered their financing through the credit union," said Lacetera. "Because of our size, we have never been able to get into indirect lending through the dealer."

GrooveCar in conjunction with the credit unions is taking steps to bring in more loans by providing special offers. GrooveCar said credit unions on its system are running a "loan sale" from July 12 to 21.

During that period, credit union members using GrooveCar can obtain loans with no payments through 2003 for vehicles.

"Usually a manufacturer will offer a no payments option," said David Jacobson, president of Groovecar. "This will be the first time that no payments option will be available on any make any model to such a large population of consumers."

Other groups that use the program include Nassau Educators, North Shore Health Services, Sperry, Suffolk County, Nassau County and Teachers federal credit unions.

Island Federal Credit Union, the North Shore-Long Island Jewish Health System and the Town of Port Washington are considering joining, Jacobson said.

The People's Alliance now serves many former Pan Am airlines employees, as well as various hospitals, labor unions, Waldbaum's and companies in the Hauppauge Industrial Park.

The credit union, which still operates a branch office at John F. Kennedy airport along with six others as far as Miami, has more than 40,000 members at about 400 companies.

Bibliography for "People's Alliance offers more convenient car loan"

View more issues: Jun 14, 2002, Jun 21, 2002, Jul 5, 2002

Claude Solnik "People's Alliance offers more convenient car loan". Long Island Business News. Jun 28, 2002. FindArticles.com. 16 Jun. 2008. http://findarticles.com/p/articles/mi_qn4189/is_20020628/ai_n10165461

Jumat, 20 Juni 2008

CASHPOINTS: E-loan expands into car financing

E-loan, the online mortgage broker, has extended its services to include a car finance centre. Motorists can choose from four types of car loan: personal, hire purchase, contract purchase, and deferred.

n www.ELoansCarLoans.com

Abbey CAT arrives

Abbey National has launched a CAT standard mortgage. It will provide loans up to 95 per cent loan to value (LTV); rates from 0.6 per cent above base rate; no redemption penalties and daily interest calculation.

n Tel: 0800 555100

Charcol exclusive

John Charcol, the mortgage broker, is offering an exclusive three- year fixed rate mortgage with an interest rate of 5.89 per cent. The package - for loans up to 75 per cent LTV - includes free valuation and the option of free legal fees or pounds 250 cashback. There are redemption penalties during the fixed period.

n Tel: 0800 718191, www.charcolonline.co.uk

Flexible with options

Bank of Ireland Mortgages has launched a flexible mortgage with two options available. The first carries an interest rate of 5.75 per cent inclusive of a 2 per cent discount until 1 February 2002, and it has no early redemption penalties. Alternatively, you can opt for an interest rate of 6.3 per cent including a discount of 2.45 per cent until 1 February 2002. With this option, you will also get a free valuation and pounds 315 towards legal fees.

n Tel: 0800 109010

Free guide to sector funds

With an increasing number of investors opting for actively managed funds which invest in specialised areas, Fidelity Investments has decided to offer a free guide to sector fund investing. The guide explains how sector funds have developed and what type of investor they are suitable for. It also explains the benefits and risks associated with different sectors and how to extend an existing portfolio.

n Tel: 0800 414171

Bibliography for "CASHPOINTS: E-loan expands into car financing"

View more issues: Sep 22, 2000, Sep 23, 2000, Sep 25, 2000

"CASHPOINTS: E-loan expands into car financing". Independent, The (London). Sep 24, 2000. FindArticles.com. 16 Jun. 2008. http://findarticles.com/p/articles/mi_qn4158/is_20000924/ai_n14324330

Kamis, 19 Juni 2008

Many car buyers 'upside down' on loans

By Eileen Alt Powell NEW YORK — A growing number of new car buyers are finding they owe more on their existing car loans than the vehicles are worth as trade-ins.

The phenomenon, known as being "upside down" on a loan, is the result of a confluence of changes in the ways Americans buy and finance their vehicles.

To begin with, the prices of new cars and trucks have been held down as manufacturers offer incentives and rebates to lure purchasers. As new car prices flatten, so do resale values. Buyers, meanwhile, are choosing increasingly longer-term loans, sometimes extended over 84 months, to reduce monthly payments.

The result is that a consumer who trades in a car that isn't fully paid for can end up wrapping the loan hangover into the financing for a new car, greatly increasing the cost. Or, if a car is destroyed in an accident before it's paid off, the insurance settlement may not fully cover the outstanding loan.

The amounts consumers are upside down are substantial, experts say.

"More than a quarter of buyers are upside down when they come in, and the average is nearly $3,800," said Bob Kurilko, a vice president with Edmunds.com Inc., an auto information publishing company based in Santa Monica, Calif.

This loan overhang has implications for both trade-ins and insurance recovery, he pointed out.

Here's the math: Say a consumer buys a $25,000 car and begins making payments of about $500 a month, based on a 6 percent interest rate. A tree blows over in a storm, flattening the vehicle. The insurance company agrees to pay, but values the car at just $22,000; the consumer is still on the hook to the finance company for $3,000 more, which must be paid out of pocket.

Scott Jones, 43, a New York free lance photographer, said he was aware of the risk of becoming upside down on a car loan when he went shopping for a new vehicle last spring.

"I read about it on some of the Web sites, and I tried to shop carefully to avoid that trap," Jones said. His strategy, he said, was "to buy a reliable car and pay it off as soon as possible."

Jones' choice of a vehicle was a Honda Odyssey minivan, which he believes will hold its value better than some other vehicles. He made a cash down payment to reduce the size of his loan, and then financed the balance over six years, though he said he may try to pay it off earlier than that.

"I figure I'll be driving it for at least 10 years — long after the loan is finished," Jones said.

Brian Reed, a vice president at Capital One Auto Finance, based in Plano, Texas, said a major contributor to the problem is that consumers have sought longer loans to hold down their monthly payments.

"In the late 1970s and early '80s, most loans were for 36 months," Reed said. "Now, the average term is about 58 months, and some lenders go as long as 72 months or 84 months."

Consumers with long-term loans who trade their cars frequently will have built up less equity and be more likely to be upside down, he pointed out.

The best strategy, Reed said, is "to try to match the term of the loan to the time you intend to keep the vehicle."

Rob Gentile, director of automotive information products for Consumer Reports, based in Yonkers, N.Y., said consumers who know they're upside down on loans often don't bargain well for new cars, since they're distracted by how that unpaid loan is going to be handled.

"Consumers should settle on the price (of a new car) before anything else," Gentile said.

Gentile also recommends consumers finish paying down a loan before they trade a vehicle, especially if it's been a good, reliable car.

"If you roll what you owe into the new car loan, you're financing the old car at the same time you're financing the new car," he pointed out. "That will cost more in interest — and your monthly payment will have gone up, too."

Bibliography for "Many car buyers 'upside down' on loans"

View more issues: Mar 30, 2005, Mar 31, 2005, Apr 2, 2005

"Many car buyers 'upside down' on loans". Oakland Tribune. Apr 1, 2005. FindArticles.com. 16 Jun. 2008. http://findarticles.com/p/articles/mi_qn4176/is_20050401/ai_n14615719

Rabu, 18 Juni 2008

Size of car loans decrease in 2000

The size of the average car loan decreased from $19,813 to $19,705 in the year 2000, according to a recent study by the Consumer Banker's Association.

In other words, despite a 6 percent increase in vehicle prices, it appears that more consumers are paying cash, or providing larger downpayments when purchasing new cars.

Some 44 percent of new auto loan originations had credit bureau scores of 720 and above, up 41 percent from 1999. Fourteen percent had scores below 620, compared to 11 percent in 1999. However, leasing originations shrunk 4.7 percent, compared to an 11.5 percent growth the previous year.

Bibliography for "Size of car loans decrease in 2000"

View more issues: Jun 2001, Jul 2001, Sep 2001

"Size of car loans decrease in 2000". Community Banker. Aug 2001. FindArticles.com. 16 Jun. 2008. http://findarticles.com/p/articles/mi_qa5344/is_200108/ai_n21476339

Selasa, 17 Juni 2008

pounds 26bn in car loans

CAR owners in the UK have borrowed more than pounds 26billion to buy their vehicles, a new survey reveals.

Research by financial website MoneyExpert.com reveals around 3.3million people have car loans totalling nearly pounds 26.7billion. Of this, pounds 12.8billion is to buy new cars and pounds 13.8billion for second-hand motors.

But MoneyExpert.com chief executive Sean Gardner says many buyers pay too much for car finance as they do not shop around.

Mr Gardner said: "There are great deals. Unfortunately there are also some pretty bad deals too."

Bibliography for "pounds 26bn in car loans"

View more issues: Jul 31, 2005, Aug 7, 2005, Aug 21, 2005

"pounds 26bn in car loans". Sunday Mirror. Aug 14, 2005. FindArticles.com. 16 Jun. 2008. http://findarticles.com/p/articles/mi_qn4161/is_20050814/ai_n14884540

Senin, 16 Juni 2008

Car loans from Bank of Scotland

Bank of Scotland is launching a car loan package for which it has cut interest rates on personal loans by 5 per cent to 14.4 per cent APR for those applying before 31 August. Call 0800 807777 for details.

Nationwide Building Society is launching its own car loan package for sums between pounds 1,000 and pounds 10,000. Rates are 18.9 per cent APR up to pounds 4,950 for Nationwide customers, and 17.9 per cent APR for sums above that.

Guide to Prudence Prudential has launched a 36-page free guide to investment, available to anyone calling its 0800 000000 freephone hotline for information about PEPs and the company's Prudence investment bond. Lines are open between 8am and 8pm.

Money Page 015

Bibliography for "Car loans from Bank of Scotland"

View more issues: Apr 25, 1994, Apr 26, 1994, Oct 4, 1994

"Car loans from Bank of Scotland". Independent, The (London). Jun 4, 1994. FindArticles.com. 16 Jun. 2008. http://findarticles.com/p/articles/mi_qn4158/is_19940604/ai_n14855025

Utah lax on car title loans

Utah laws are among the friendliest in the nation for extremely high-interest "car title loans," according to a new study by the Consumer Federation of America.

That comes after a Deseret Morning News series this past week reported that Utah laws similarly are among the most lax nationally for also-high-interest "payday loans" -- which has helped attract more payday loan stores here than 7-Elevens, McDonald's, Burger Kings and Subway stores combined.

Of course, the same lenders often offer both types of loans. Morning News visits to dozens of such businesses found they charge a median 521 percent annual interest on unsecured payday loans and 300 percent interest on title loans -- usually secured by providing lenders an extra set of keys to allow easy repossession of cars in case of default. "As with payday lending, Utah has virtually no protection for consumers in the short-term, high-cost, small-loan market for car title loans," said Jean Ann Fox, CFA's director of consumer protection. "I don't think you can get much friendlier to that industry" than Utah is, she added.

The new study by the Consumer Federation of America, a nonprofit consumer education group, looked at laws governing car title lenders in all 50 states. It also had volunteers visit lenders in 11 states, including Utah, to collect data on rates and practices.

It found that Utah is one of only 16 states where laws or court decisions specifically allow car title loans. Utah is among just seven of those states that have no caps on their interest rates and fees.

The study said 31 states have usury caps or other provisions that make high-interest car title loans difficult -- but title lenders sometimes creatively use loopholes to allow them to charge high rates anyway. The report said such creativity is not needed in Utah, where few rules restrict car title loan lenders

"We found really high interest rates in Utah. Its laws allow the loans to be flipped, or extended, at high cost. There isn't much protection on the books," Fox said.

If someone has a clear title on a car, lenders in Utah may offer loans using it as security. If borrowers default, Utah law allows the lenders to seize and sell the car to cover amounts owed in default and return the rest to the owner. Most title lenders require borrowers to provide them with a set of car keys to allow easy repossession.

State records obtained by the Morning News show 204 locations are licensed as title loan lenders. Most are also payday lenders. (Utah has 381 licensed payday loan sites.)

In visits by volunteers to eight Utah title lenders, the CFA found annual rates ranging from 25 percent to 521 percent on 30-day car title loans of up to $5,000 or more.

"It's a debt trap. You have to pay all of that back at the end of the month, and most people are not likely to be able to do that. So they buy more time, and keep paying and paying to avoid repossession of their car," Fox said.

She adds that loans pose little risk for lenders. "Because they are secured by cars that are paid off, in theory they should be more secure than loans on new cars. But the rates are far higher."

The study adds that "title loans are over-secured. Title lenders loan a fraction of the value of the car used to secure the loan."

The study also said, "Information necessary to make an informed credit decision is hard to come by" nationally with many lenders failing to quote or post rates in terms of annual interest, and also refusing to give detailed information about terms until borrowers are ready to sign contracts.

The Morning News similarly found in visits to 67 payday lenders (most of whom also offer car title loans) that 18 percent failed to post signs as required with the annual percentage rate of their loans.

The CFA study called for states such as Utah that allow high- cost title lending to "consider repealing those laws. Failing repeal, states should enact rate caps that reflect the over-secured nature of title loans and institute post-default procedures and rights to protect consumer assets."

The CFA's complete report is available online at www.consumerfed.org.

E-mail: lee@desnews.com

Bibliography for "Utah lax on car title loans"

View more issues: Nov 18, 2005, Nov 19, 2005, Nov 21, 2005

Lee Davidson Deseret Morning News "Utah lax on car title loans". Deseret News (Salt Lake City). Nov 20, 2005. FindArticles.com. 16 Jun. 2008. http://findarticles.com/p/articles/mi_qn4188/is_20051120/ai_n15851222

Outsource Financial Services will automate its call center with CreditRevue 2000 and CreditConnection software from Credit Management Solutions Inc., headquartered in Columbia, Md. CreditRevue 2000 enables consumer lenders to maximize profitability through more knowledgeable decision-making, faster turnaround and improved productivity.

CMSI's CreditConnection is an on-line, real-time connection that closes the electronic loop between third-party originators, such as car dealers, and the lender.

A division of the Van Wagenen Co., Outsource Financial Services was formed earlier this year to act as a fullfunction, extended-hour consumer loan origination center featuring call center services. This approach allows lenders to move credit origination expenses from fixed to variable in nature; as a result, they can respond effectively and rapidly to fluctuations in loan demand, free from worry about capacity issues and staffing requirements, according to the company.

With the CMSI software, Outsource Financial will be able to automate the entire credit application process, including application entry; credit bureau interfaces; access to on-line data bases, such as the Kelley Blue Book, Vintek and NADA; detailed credit report summary and analyses that can be presented in a variety of ways; transfer of funding information to lenders accounting systems; and, if requested by Outsource Financial clients, loan documentation branded with their names and logos.

With CreditConnection, credit applications and related information that are keyed in by car dealerships will be automatically routed, via CreditConnection's computer switch, to Outsource Financial's CreditRevue 2000 system. The system will then process the applications based upon the lender's underwriting criteria and transmit the loan decision back to the car dealer in under five minutes.

Bibliography for "Automated car loans"

View more issues: Jul 1998, Aug 1998, Oct 1998

"Automated car loans". Kentucky Banker Magazine. Sep 1998. FindArticles.com. 16 Jun. 2008. http://findarticles.com/p/articles/mi_qa5353/is_199809/ai_n21427702

Loan zone: Cars for graduates

This CU program reaches out to younger members.

One of the first things college graduates need and/or want after landing their first real job is a car.

The problem is that many recent graduates don't have sufficient credit histories to finance a car. Unless they are willing to pay above-market interest rates or to provide a co-signer with a good credit history, they can't get affordable financing, because most scoring systems look for length of employment, credit history, home ownership, etc., to build a score that will be awarded a competitive interest rate.

Several years ago we brought into our field of membership the students of Nicholls State University. Shortly thereafter, the loan officers at ASI Federal Credit Union were seeing more and more applications from young professionals, which, when credit scored, resulted in interest rate determinations that seemed to be higher than the risk associated with the loan.

And yet, these were the people (who, when they had established good credit histories as most of them would) financial institutions would be soliciting. It made sense to establish a relationship early on with these applicants.

In line with this thinking, ASI FCU started its semi-annual "Graduate Car Loan Sale" three years ago.

SELLING AND CROSS SELLING

The month-long promotions are held each May and December to coincide with graduation dates. The program guidelines include the following:

* The program is available to any recent college graduate, including those with little or no credit.

* The applicant can obtain 100 percent financing on a new or used car at interest rates afforded to "A" paper members.

* To qualify, the graduate must have accepted a job in his or her field of study.

* If the member has already started his job, we ask for a check stub as employment verification.

* If the member has not yet started work, we ask for a commitment letter from the employer.

* The graduate's salary must be sufficient to qualify for the loan, the debt ratio must fall within our standard guidelines, and there must be no derogatory information on the credit report.

Since the process of buying a car allows for some discussions with the buyer, cross-selling opportunities are many. Visa cards with small, starter limits; no-fee checking accounts; and debit cards are all cross-sold.

RESULTS SO FAR

In our experience so far, each promotion brings in 10 to 20 car loans. By giving new graduates a chance to establish good credit, we are hoping to have a lifelong relationship with them, and to see increased use of all credit union services.

To date, we have approximately 60 graduate car loans on the books, with an average balance of $15,000. On average, the graduates are also using at least two other credit union services in addition to the loan.

Since the inception of this program, there have not been any defaults.

While the program offers graduates a special way to apply for these loans and each case is evaluated individually, the limit of the loan is determined by ASI FCU's standard underwriting guidelines.

With improved marketing capabilities, ASI FCU hopes to reach more and more young professionals and, through this program, to become their primary financial institution.

Audrey Cerise is president/CEO of $170 million ASI Federal Credit Union, Harahan, La.

Copyright Credit Union Executives Society Aug 2003
Provided by ProQuest Information and Learning Company. All rights ReservedCerise, Audrey "Loan zone: Cars for graduates". Credit Union Management. Aug 2003. FindArticles.com. 16 Jun. 2008. http://findarticles.com/p/articles/mi_qa5328/is_200308/ai_n21334122