stevio
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Post by stevio on Jul 25, 2017 18:08:29 GMT
There has been talk in the press of a credit bubble with car loans being one of the larger sources of finance. We have seen car loans at CO fail, but hopefully with a good recovery. Ratesetter have also run into a big problem with car laons to a specific company and are bailing out investors.
What sort of exposure to car loans do people have and what loans are out there?
Are any, due to the structure, better than others?
Is this a UK or worldwide problem?
Does anyone have any proper insight into this market (not man down the pub)? - what sort of LTV, rate, length etc is expected?
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Post by bracknellboy on Jul 25, 2017 18:27:09 GMT
nothing over insightful to say, but just to note that I significantly reduced my exposure on MT to car loans a few weeks back. Afterwards felt that I may have slightly overdone the downsizing. Performance of car loan funders on TC has not been wonderful in the past, as I recall.
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baz657
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Post by baz657 on Jul 25, 2017 19:06:36 GMT
Residuals on diesels are already suffering since all the scandals became public knowledge. They're not helped by the extortionate repair costs involved which are now just about starting to come to light when diesels (especially Euro 5 and 6 versions) go past their warranty periods.
Petrol versions are faring much better. At least I got those decisions right about hers and my cars last time we bought (if only my product knowledge on P2P investments was as good!).
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Post by dan1 on Jul 25, 2017 19:14:22 GMT
I bought into the longest remaining term car loan on COL the day before it defaulted  . Should have bought the negative term loan that defaulted - at least I'd have my capital back now rather than a long wait. Take my advice not but, I feel a certain degree of ambivalence when I hear the BoE are warning about PCP and the like. It's the risks they're not discussing that'll most likely lead to the next asset crash. At least car loans are asset backed, unlike the majority of consumer debt (think credit cards, personal loans). I don't for one minute think asset backed means no losses but equally the risk of 100% loss is very low given a diversified portfolio. At the end of the day the cars have value, and 2nd hand may be in demand if the economy really tanks. |
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Post by martin44 on Jul 25, 2017 22:57:19 GMT
I have lent funds on quite a few cars in the past via Fundingsecure, the difference was lending on vintage cars, which were expected (or i expected) to increase in value over the period of the loan, personally i would not invest in modern car loans on any platform, the depreciation over six months can be eye watering.
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archie
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Post by archie on Jul 26, 2017 6:28:48 GMT
I like the AE grouped assets loans because they are on the HP agreements rather than cars, ending on Monday sadly. I'm wary of some of the others loans as vehicles can easily be misplaced.  |
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Post by nellerdk on Jul 26, 2017 16:00:01 GMT
it is not really a problem if you have buyback guarantee.
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stevio
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Post by stevio on Jul 26, 2017 16:10:18 GMT
it is not really a problem if you have buyback guarantee. Any particular loans have that?
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Post by nellerdk on Jul 26, 2017 18:14:32 GMT
it is not really a problem if you have buyback guarantee. Any particular loans have that? yes, on e.g. Twino and Mintos.
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angrysaveruk
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Post by angrysaveruk on Jul 26, 2017 19:12:51 GMT
Zopa also has considerable exposure to Car Loans and it is something I am concerned about. I am letting my loans run-off. I am pretty sure there is a big financial event coming within 2 years.
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Post by df on Jul 26, 2017 22:55:00 GMT
Zopa also has considerable exposure to Car Loans and it is something I am concerned about. I am letting my loans run-off. I am pretty sure there is a big financial event coming within 2 years. I might be wrong, but I don't think Zopa's loans are secured on assets.
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Post by df on Jul 26, 2017 23:21:17 GMT
There has been talk in the press of a credit bubble with car loans being one of the larger sources of finance. We have seen car loans at CO fail, but hopefully with a good recovery. Ratesetter have also run into a big problem with car laons to a specific company and are bailing out investors. What sort of exposure to car loans do people have and what loans are out there? Are any, due to the structure, better than others? Is this a UK or worldwide problem? Does anyone have any proper insight into this market (not man down the pub)? - what sort of LTV, rate, length etc is expected? I tend to ignore 'talks in the press'... I have some car loans on MT, COL and FS. I think classic, luxury/low-depreciation and sports cars are better, group asset is ok and loans secured on ordinary cars are the worst. All type of loans default for various reasons. Car loans are not an exception. I wouldn't stop investing in new car loans just because some of them have defaulted. I don't have any exposure to RS car loans, but will take an offer to sell out without paying their ridiculous fees. I have very little left there, it's a good opportunity to reinvest it somewhere else for a better return.
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Post by WestonKevTMP on Jul 27, 2017 0:42:27 GMT
Some interesting anecdotal for a provincial town mechanic this weekend. He has visibily noticed that all cars coming in for work nowadays are high end cars, such a BMWs.
The owners are the same types as before - young or less well off people that normally couldn't afford these models. But they can afford it on the PCP deals, or as WhatCar says "PCP finance is hugely popular, because it lets you drive something that you would otherwise struggle to afford"
The issue is that PCP relies on a strong used car market with valuations remaining strong. But with so many used high end models flooding the market shortly, and I'm no expert in used car prices, there's only one way the valuations can go. Which is going to cause pain for the dealers and finance providers. Or the borrower if the Guaranteed Future Value (GFV) has been set to low.
As it happens I don't think any of the P2P platforms (or their partners) have used the PCP model. And have typically focussed on the used car market with loans over 5-years.
Kevin.
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angrysaveruk
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Post by angrysaveruk on Jul 27, 2017 8:34:21 GMT
Zopa also has considerable exposure to Car Loans and it is something I am concerned about. I am letting my loans run-off. I am pretty sure there is a big financial event coming within 2 years. I might be wrong, but I don't think Zopa's loans are secured on assets. No they are not, but a large number of their loans seem to be going on car purchases - which is part of the bigger problem of people buying cars they cannot afford so they can post about it on Facebook.
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Post by yorkshireman on Jul 27, 2017 9:14:50 GMT
The owners are the same types as before - young or less well off people that normally couldn't afford these models. But they can afford it on the PCP deals, or as WhatCar says " PCP finance is hugely popular, because it lets you drive something that you would otherwise struggle to afford"A debt fuelled economy is wonderful init?
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. Should have bought the negative term loan that defaulted - at least I'd have my capital back now rather than a long wait.
