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Post by tinkertailor25 on Sept 27, 2016 19:51:18 GMT
To what extent do people here trust the asset and LTV valuations? Do you make your own asset valuations and base your lending on that, work in a certain % extra 'leeway' in case of any overestimated values, or rely fully on the MT official figures?
Just curious as I see that today's 2012 Mercedes-Benz SLS AMG Roadster loan was valued at £190,000, and yet the borrower has the exact same vehicle on their website at £158,750 retail. And presumably a retail buyer would be looking to negotiate lower than that, which makes the actual LTV much more than the 50% that MT have claimed. Even worse if a forced sale was based on the trade value!
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fp
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Post by fp on Sept 27, 2016 20:01:46 GMT
To what extent do people here trust the asset and LTV valuations? Do you make your own asset valuations and base your lending on that, work in a certain % extra 'leeway' in case of any overestimated values, or rely fully on the MT official figures? Just curious as I see that today's 2012 Mercedes-Benz SLS AMG Roadster loan was valued at £190,000, and yet the borrower has the exact same vehicle on their website at £158,750 retail. And presumably a retail buyer would be looking to negotiate lower than that, which makes the actual LTV much more than the 50% that MT have claimed. Even worse if a forced sale was based on the trade value! Have you checked it in an official motor trade guide? What they choose to sell a vehicle for is their choice, it could be worth more, or less than that figure.
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littleoldlady
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Post by littleoldlady on Sept 27, 2016 20:16:29 GMT
Although the Merc is very expensive, it is not a 'supercar' in the sense that it is appreciating in value. In fact this model depreciates at a terrifying rate. It will probably be worth £10,000 or more less in 6 months.
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Post by tinkertailor25 on Sept 27, 2016 20:22:18 GMT
I'd be extremely surprised if a forced sale brought more than the retail price previously offered by an established forecourt dealership, who presumably should know the true worth of an asset. My late father worked in the motor trade and nearly all of the seized asset sales he was involved in were sold to trade buyers rather than individuals, so the purchase value was nowhere near the actual retail value, never mind any catalogue estimate. Even if it was a sale to retail individuals, surely no one would pay more than the retail price the asset was previously advertised for (excluding market demand changes and bidding wars)?
This is partly why I've asked the question though, how accurate do people think the catalogue valuation would be in the event of a fire sale and does it affect your lending strategy?
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Post by tinkertailor25 on Sept 27, 2016 20:27:59 GMT
Yes, that's the one. I had the same thoughts as you, but concluded that they must change the plate to avoid identifying the borrower on MT. Plus the mileage is the same, and I'm pretty sure that the showroom windows are the same but the photos are taken at different sections of the building. I agree that it's probably worth more than the loan value, but it makes me cautious about other loans. Edit: forgot to add, there are more photos and details about the car on the borrower's dealership website which leaves me about 99% convinced that it's the same one.
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Post by MoneyThing on Sept 27, 2016 20:42:49 GMT
Evening,
I would just mention that the car highlighted by the OP is not the same vehicle. The one we have loaned against is currently being advertised online for £190,000 (well specifically £189,999 as they do).
The SLS AMG is actually a car that is now appreciating in value as they have stopped making it (now replaced by the AMG GT).
I can also say that the borrower paid significantly more for the car then we loaned against it and once the car is sold, I will ask the borrower if they are happy for me to disclose the sale price on here.
Kind regards,
Ed
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Post by tinkertailor25 on Sept 27, 2016 21:42:13 GMT
Working late, Ed?  If it's not the same car then that is somewhat relieving (glad I had a 1%). It would be interesting to find out the original purchase figure, in due time of course. Still interested in people's thoughts on how valuations affect their lending strategies. Do you work on a higher LTV ratio than stated for extra security or base how much you're willing to loan on the book, retail or trade figures? Does this vary depending on the asset class (wine, cars, art, commercial property etc)? |
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archie
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Post by archie on Sept 28, 2016 6:22:46 GMT
I trust valuations on this site far more than on some other popular sites.  |
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ptr120
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Post by ptr120 on Sept 28, 2016 7:18:28 GMT
I'd far rather car loans would be valued against trade price rather than retail
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Post by GSV3MIaC on Sept 28, 2016 7:55:16 GMT
I don't care whether it's "70% LTV" against trade or "50% LTV" against retail, just as long as the asset is clearly worth more than the loan!! 8>.
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SteveT
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Post by SteveT on Sept 28, 2016 7:58:33 GMT
The main thing for me with LTVs is for the basis on which the valuation has been made to be clear and unambiguous. I can then make my own judgement as to what % I'm happy to work to. With cars, it makes relatively little difference to me whether the valuation benchmark is retail or trade; it just changes the % I'm happy to lend to.
What worries me more (although NOT with any MT loans I've seen to date) is where the valuation used is based on a presumption of something happening which is far from guaranteed. For example, planning consent being granted, equipment being installed and commissioned by a certain date, etc. Sometimes these assumptions can be buried deep within a VR whilst the headline LTV makes no mention. My hope is that the FCA will clamp down on this with a clear definition of how LTVs should be presented, a little like the rules surrounding APRs on consumer loans. Where a valuation is given that assumes something uncertain WILL happen, there should also be a requirement to share (with equal prominence) the value that it could drop to if it DOES NOT.
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averageguy
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Post by averageguy on Sept 28, 2016 8:43:14 GMT
Working late, Ed? If it's not the same car then that is somewhat relieving (glad I had a 1%). It would be interesting to find out the original purchase figure, in due time of course. Still interested in people's thoughts on how valuations affect their lending strategies. Do you work on a higher LTV ratio than stated for extra security or base how much you're willing to loan on the book, retail or trade figures? Does this vary depending on the asset class (wine, cars, art, commercial property etc)? I thought the max was £380..how did you get 1%?
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Post by GSV3MIaC on Sept 28, 2016 10:16:13 GMT
At a guess they have a partner, dog, business account, or just two separate accounts. 8>.
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littleoldlady
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Post by littleoldlady on Sept 28, 2016 10:58:29 GMT
Although the Merc is very expensive, it is not a 'supercar' in the sense that it is appreciating in value. In fact this model depreciates at a terrifying rate. It will probably be worth £10,000 or more less in 6 months. At Autotrader they list 10 of these, all under 20k miles: 2010 £206k, £150k, £175k 2011 £175k, £170k, £155k 2012 £170k 2013 £236k, £400k 2014 £465k
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