Getting Finance (A Loan) For A Car
- – What will you need?
- – What should you be aware of?
- – Don’t be intimidated
The prompt for us to blog on this topic came about by 4 clients complaining about the treatment they received by car yard employees.
June is a busy month for all financial institutions and businesses alike, and for many of us we like to finish off the financial year looking at those extra tax deductions and getting those last few dollars in. Car yards are no different.
Getting Finance – What Will You Need?
Like everything you do, things run smoother if we are prepared and have a plan of attack.
- – If employed – last 2 pay slips
- – If self employed – last years profit and loss and balance sheet
- – Know who you have loans with and how much you have to pay. Some people pay more than is required under the contract terms so it is important to know both amounts
- – Have an idea as to what your assets are worth (no need to be exact – just close) eg: cash in the bank – exactly is $10,391.51 whereas $10,000.00 is close enough
- – Don’t exaggerate eg: home value $720,000.00 don’t say $1,000,000.00
- – Conversely mortgage is $561,300.00 don’t understate by saying $150,000.00. You may be asked for proof
- – Don’t “forget” to tell us all the loans you have, forgetting to tell us is called non-disclosure and will result in rejection
The simplest way to have all these things at your fingertips is to contact your finance broker. We at Hunter Business Finance will do the application for you and prompt you for the answers to these questions.
What Should You Be Aware Of?
As mentioned we had four different clients with four different poor experiences with car yards in June.
The First Client
This client had been referred to us by their accountant who provided us with all their financial information. After a brief chat with the client we obtained the remaining information to apply for and obtain a loan approval.
Our client then went car hunting. Sadly this was not a happy experience. She chose a car and advised the salesman she had her finance arranged through Hunter Business Finance. The salesman still had to refer the client to their internal Finance & Insurance (F & I) person, and this F & I person threatened both legal proceedings and banking ombudsman intervention if the client did not use their finance. (The banking ombudsman is for individuals to complain, not the other way around – silly F & I person).
Our client contacted their accountant for advice, and needless to say the accountant was very unhappy with the F & I person. The client proceeded with our finance and our monthly repayments were considerably cheaper than those quoted by the car yard.
The Second Client – (different car yard)
Similar to the first, the client chose a car and spoke to the car yard’s F & I person who said they could not afford the repayments and would need their spouse to sign on the loan with them to establish serviceability. This statement was totally incorrect and we were able to obtain a finance approval for the client in their own right without their spouse signing.
When we requested an invoice from the car yard, the F & I person refused to provide it and sent an email to the client stating we must have falsified the figures so they should not sign with us.
This particular client was well known to us, had excellent credit, and more than sufficient capacity to repay the loan.
The client demanded the F & I person send the invoice to us as requested, we arranged the finance and the purchase went ahead.
The Third Client (different car yard from 1 & 2)
Similar to one and two above, this client chose a car and was sent to the F & I person, signed a Sale Contract, and paid a holding deposit on the vehicle.
We obtained a finance approval for them and sent a request to the F & I person for an invoice.
Upon receipt of our request (and realisation that the client would not be using their finance) the car yard’s Sales Manager ignored the signed Sale Contract and holding deposit, and sold the vehicle to someone else. Not only was this incredibly poor customer service, it was completely immoral and caused unnecessary frustration to the client.
The client ended up finding a vehicle with a different car yard instead, and proceeded with his finance through Hunter Business Finance.
The Fourth Client (different car yard from 1, 2 & 3)
Our client, on his accountant’s instructions, was advised to obtain his finance on a lease agreement (not a HP or chattel mortgage). There are specific reasons an accountant will request you have a lease.
The client was advised by the car yard’s F & I person that leases are no longer available and the only type of finance is a loan (a chattel mortgage) – WRONG. We obtained the lease as requested by the client’s accountant and proceeded with the purchase.
Don’t Be Intimidated
You as the car buying public must refuse to be intimidated or bullied. If this type of thing happens to you, walk out and don’t accept this type of treatment. Most importantly, if this is how you are treated when you are buying a car what will happen if you have a warranty issue or need to arrange a vehicle service?
Don’t feel pressured to sign anything on the spot. Take your time and ensure you’re happy with the vehicle and final price before signing.
First and foremost, speak to the team at Hunter Business Finance about arranging a suitable finance solution for you before heading in to the car yard. If any car yard tries to intimidate you or force you into anything, walk away. The cost of buying from this type of car yard will far exceed the drama of having to start looking again.
Note: The NSW Department of Fair Trading has prepared a handy “Car Buyers Guide” which can be found at: http://www.fairtrading.nsw.gov.au/ftw/Consumers/Motor_vehicles/Steps_to_buying_a_car.page?
Posted: 6/07/2016 1:12:01 pm by Hunter Business Finance | with 5 comments