kulerucket
Member of DD Central
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Post by kulerucket on Dec 30, 2016 10:49:08 GMT
Out of interest what is your maximum LTV on a car loan? They generally all seem quite high, but maybe that's normal for car loans. When considering depreciation of the car value the collateral might not cover the loan after a year. If I go for a maximum of 75% I can still pick up loans, but there are many 90%+ that seem way too high.
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Post by loontik on Dec 30, 2016 17:25:00 GMT
I think the lower the LTV, lower the interest rates on that as well. Typically LTV's around 60 - 75% command a fair return. I think with decent LTV, in case of a default or late payment it should be fairly easy to sell in the secondary market too.
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Post by kilozulu on Dec 30, 2016 22:23:27 GMT
I aim for 60%.
Expierence with defaults I've seen is that collateral=car is sold for about 70% of valuation, plus the recovery handling cost is 5-10% of loan, thus anything above 60% LTV is likely to loose some of principal.
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p2pmaster
investment is life.
Posts: 128
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Post by p2pmaster on Feb 12, 2017 10:15:35 GMT
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Post by zeverare on Feb 12, 2017 12:08:30 GMT
uk is an almost closed market for cars since they are right hand drive. So you cannot export used cars to continental europe. If there is a problem with car loans values of used cars can tumble very fast.
That makes it more comparable with the housing market in the US: you cannot move a house.
Even worse in some states you could just give your key back to bank and say, it is now your problem.
I don't know about the baltics but here in Belgium you are still responsible for the remaining balance if you cannot repay a loan and the collateral does not cover the outstanding amount. The lender can go directly to your employer and take a cut of your paycheck an go to your house and take your furniture, tv, ...
Of course there is still risk if you lend to somebody who cannot pay back.
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JamesFrance
Member of DD Central
Port Grimaud 1974
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Post by JamesFrance on Feb 12, 2017 12:56:45 GMT
I do doubt the value of some of these already old cars after another 5 years. A major repair can soon exceed the value of the car so if the engine fails it becomes worthless.
I prefer the loans with buyback.
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Post by extremis on Feb 12, 2017 16:12:33 GMT
I prefer the loans with buyback. Sure, but personal loans interest rates are in free fall these days.. Would you still buy loans with buyback guarantee if they only have 1 digit interest rates?
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JamesFrance
Member of DD Central
Port Grimaud 1974
Posts: 1,317
Likes: 893
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Post by JamesFrance on Feb 12, 2017 16:17:16 GMT
No, but there are buyback car loans available.
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kulerucket
Member of DD Central
Posts: 336
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Post by kulerucket on Feb 12, 2017 21:09:27 GMT
Annoyingly, there are about 30K€ worth of 14%, 60m+ car loans with buyback right now. And I have a balance of 0.00€   |
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Post by gmaxkenny on Feb 13, 2017 2:26:03 GMT
Annoyingly, there are about 30K€ worth of 14%, 60m+ car loans with buyback right now. And I have a balance of 0.00€ Look at the LTVs these are basically unsecured personnel loans with buyback.
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Post by guggaburggi on Feb 13, 2017 9:04:01 GMT
Annoyingly, there are about 30K€ worth of 14%, 60m+ car loans with buyback right now. And I have a balance of 0.00€ Look at the LTVs these are basically unsecured personnel loans with buyback. No they are not. The money is used to buy a car. The car still exist no matter the LTV. In unsecured personnel loans, there is no securitization at all.
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