paulg
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Post by paulg on Nov 24, 2016 21:48:34 GMT
A pessimist is what an optimist calls a realist.
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starfished
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Post by starfished on Nov 24, 2016 22:26:44 GMT
The usual @bobo pessimistic, negative and extreme view of the world. There's always a quick way out, you know! I truly hope what is implied was not intentional.
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Post by Deleted on Nov 25, 2016 8:07:27 GMT
Hardly extreme! Just part of the 48%. "We" voted for poverty and yesterday that coming poverty was confirmed. Still such is Democracy....
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on Nov 25, 2016 8:48:32 GMT
Hardly extreme! Just part of the 48%. "We" voted for poverty and yesterday that coming poverty was confirmed. Still such is Democracy.... Move to another country in the EU before we leave and you should be allowed to remain there.
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SteveT
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Post by SteveT on Nov 25, 2016 8:50:59 GMT
[Mod hat on]
Can we keep this discussion away from contentious politics please!
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elliotn
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Post by elliotn on Nov 26, 2016 3:59:36 GMT
I'm a raging optimist myself! Piffling loan limits holding back your average BH aside!
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DeafEater
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Post by DeafEater on Jan 6, 2017 20:18:21 GMT
Like many MT lenders I have a chunk of my portfolio in AE loans (currently about 3.6k) but as far as I can see, AE have never paid a loan back. They pay their interest on time and regularly take out new loans but when existing loans come to their maturity date, they're always (as far as I can see) rolled over and continue as new loan numbers. I did a quick tot to work out the total of their outstanding MT loans and it seems to be about 4.5 million quid. Nevertheless their thirst for new loans continues unabated.
I then took a closer look at the schedules attached to each loan that list the vehicles making up the security for those loans. I was interested because with existing loans rolling over into new loans, I wanted to see if they were writing down the value of the individual vehicle assets over time. They aren't.
If you take loan AE315 as an example, this matured on 05/07/2016 and rather than repaying, it rolled over into AE448. If you compare the deal numbers in the asset schedules for those two loans you'll see that where the deal numbers (which identify the vehicles) are common between AE315 and AE448, the asset values are exactly the same. Hence a vehicle that is 6 months older with umpteen more thousand miles on the clock is apparently worth exactly the same as it was six months earlier. AE448 recently rolled over into AE618 so I checked the AE618 schedule for deal numbers in common with the original AE315 schedule. I didn't see any matches but AE618 DID contain some low numbered deal numbers (e.g. 500067, 500077, 500087 etc) which made me suspicious. A quick look at the asset schedule for AE316 (which is the same vintage as AE315) shows the original appearance of 500067, 500077 etc and yes, they're listed in AE618 at exactly the same value as they were 12 months ago in AE316.
Note that I'm not suggesting there is any overlap between the schedules of CURRENT loans (although I haven't got the time to check there isn't) but anyone that thinks that a car which is valued at £10,000 can be driven for a year and STILL be worth £10,000 the following year, is one stick short of a bundle.
Can anyone see a problem with my logic?
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hazellend
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Post by hazellend on Jan 6, 2017 20:25:52 GMT
Like many MT lenders I have a chunk of my portfolio in AE loans (currently about 3.6k) but as far as I can see, AE have never paid a loan back. They pay their interest on time and regularly take out new loans but when existing loans come to their maturity date, they're always (as far as I can see) rolled over and continue as new loan numbers. I did a quick tot to work out the total of their outstanding MT loans and it seems to be about 4.5 million quid. Nevertheless their thirst for new loans continues unabated. I then took a closer look at the schedules attached to each loan that list the vehicles making up the security for those loans. I was interested because with existing loans rolling over into new loans, I wanted to see if they were writing down the value of the individual vehicle assets over time. They aren't. If you take loan AE315 as an example, this matured on 05/07/2016 and rather than repaying, it rolled over into AE448. If you compare the deal numbers in the asset schedules for those two loans you'll see that where the deal numbers (which identify the vehicles) are common between AE315 and AE448, the asset values are exactly the same. Hence a vehicle that is 6 months older with umpteen more thousand miles on the clock is apparently worth exactly the same as it was six months earlier. AE448 recently rolled over into AE618 so I checked the AE618 schedule for deal numbers in common with the original AE315 schedule. I didn't see any matches but AE618 DID contain some low numbered deal numbers (e.g. 500067, 500077, 500087 etc) which made me suspicious. A quick look at the asset schedule for AE316 (which is the same vintage as AE315) shows the original appearance of 500067, 500077 etc and yes, they're listed in AE618 at exactly the same value as they were 12 months ago in AE316. Note that I'm not suggesting there is any overlap between the schedules of CURRENT loans (although I haven't got the time to check there isn't) but anyone that thinks that a car which is valued at £10,000 can be driven for a year and STILL be worth £10,000 the following year, is one stick short of a bundle. Can anyone see a problem with my logic? Hopefully, Moneything will be able to respond to this. Quite worrying if what you say is correct.
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Post by slumberingaccountant on Jan 6, 2017 21:59:31 GMT
The loan value outstanding on each car should have dropped too, so maybe it sorts itself out. I must admit i have a tiny part of these as the LTV looks too high.
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stub8535
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personal opinions only. Not qualified to advise on investment products.
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Post by stub8535 on Jan 7, 2017 0:34:54 GMT
The collateral is reevaluated every month and new assets are added to the same or higher value as assets are removed to sale etc. At rollover the assets should thus read the same. To truly compare one needs to screen grab the assets list and then compare that with the rollover list to see if there is a problem.
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james
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Post by james on Jan 7, 2017 5:54:05 GMT
The loan value outstanding on each car should have dropped too, so maybe it sorts itself out. I must admit i have a tiny part of these as the LTV looks too high. It doesn't, that makes it worse. The loan we make is to AE and that doesn't decrease in value over time. If the outstanding value of vehicle and repayments has dropped that makes the LTV for both portions worse and means that others have to be added to the bundle to keep them within limits. For these loans the most important security is the total of HP payments remaining, not the vehicle value. If we ever see a renewal where no new vehicles are added compared to the original schedule that is a high probability indicator of trouble because the future HP payments have dropped by six months worth. It isn't a concern that AE wants to borrow more. They need to buy vehicles and repayments from their customers come in over time so we should expect growth in loan value linked to growth in their business.
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archie
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Post by archie on Jan 7, 2017 7:57:12 GMT
I guess what would be interesting is how long the HP agreements normally run for.
As the HP agreements expire then they are replaced with new agreements. This would mean eventually the early loans would have all the asset list replaced with new vehicles and AE wouldn't need to raise as much in new borrowing.
The last new loan was 100k where as in the summer they were borrowing 200k. That could just be seasonal demand or partly the effect of new vehicles going into existing loans instead.
The way I view these loans is the HP agreements will always pay far more than the MT interest so they should be relatively safe.
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jonah
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Post by jonah on Jan 7, 2017 8:50:59 GMT
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adrianc
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Post by adrianc on Jan 7, 2017 9:46:50 GMT
View that "5% drop" in isolation, and it looks bad. But as that article points out, 2016 was a 2% increase on 2015 and a new record. 2015 was a 6% increase on 2014 and a new record. www.bbc.co.uk/news/business-352490442014 was a 9% increase on 2013 and a 10-year record, the fourth-highest ever. www.bbc.co.uk/news/business-30706580So that's a cumulative increase of nearly 18% in three years. Take that 5% drop off, and you're still 12% up on 2013. The new car market has changed a lot in the last few years - a lot of the "fleet sales" that article talks about will be to lease companies for personal finance packages. Joe Average does not now own his shiny new car, he leases or PCPs it. In three years time, he has to hand it back, but will almost certainly just take another one on a similar deal. If he's on a PCP, he has the option of dipping deep into his pocket to pay the balloon and keep it, but if he can't/won't, then he walks. That's a strong driver of repeat sales on three-yearly cycles.
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Post by moneymagnet on Jan 7, 2017 10:02:31 GMT
An interesting article. I wonder if bad news for new car sales could be good news for used car sales. If new car prices are going up and the inflation rate goes up, perhaps more people will buy used cars as opposed to new? Could 2017 be a very profitable year for AE?
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