Over the past 12 months I have seen a significant increase in what can be only be considered as dubious finance offers and as always by new capital companies entering the market looking to quickly shift money by any means and potentially bending the FCA consumer protection rules to do it.
When reviewing your options from the market, here are some key points to look for:
Rush Rush Rush – Is your enquiry being listened to and the key points of your enquiry noted, and have you been explained all the options that are available to you? If you are being asked to sign a high net worth statement or business mileage disclaimer, ask why as this means an unregulated facility. What does that mean? Well you should have been advised!
Investment talk – Car finance companies are not financial advisers. It takes years of experience to know the value performance of a car and is generally not experience a lender has. Are you being tempted into thinking you will be making a fast buck on a car? The reality is it could be at the potential cost of an expensive funding package.
Over attractive finance offer – Suggesting a small deposit, long term and large balloon at the end rather than listening to your request? Why? So that you pay excessive interest charges on a larger facility and you become a very profitable opportunity for them.
Generally, most lenders in the market have a similar offering with the real difference being in their appetites for certain types of assets or customer. If one lender stands out with offers like no deposit, extended terms and very high balloon payments, there is clearly something wrong and needs looking at carefully. Nothing comes for nothing so if an offer is distinctly different – there is a reason and you will be paying for it somewhere.
So, think about this – have you had the quotation fully explained to you including the type of facility (regulated or un regulated) and your early settlement options? Have you had time to consider any options offered or are you being rushed? Have you looked at the overall cost of the profile rather than just the attractive monthly payment? How do you feel about the person at the end of the phone? – Head and heart count in any business!