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24-07-2008, 09:03 AM | #1 | ||
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Join Date: Jan 2005
Location: Sunshine Coast
Posts: 1,250
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I have just had an interesting few days with a car yard and a car finance brokerage..........
the ute i was looking at buying was $9,000 , the dealer tried to get me to put a deposit down there and then , I said when my finance is soughted I will put a deposit down , the yard didnt like it but I was adamant...... Really glad I said this because if I did put the $300 down I would of lost it. So here's the thing , the finance broker was trying to charge me $770 for a max of 2 hours work to send my credit file to a credit lender.....As far as I am aware car finance brokers get a payment from the finance company and also from the car yards aswell......$770 IS AN ABSOLUTE RORT! car......................$9000 loan application fee.$350 Broker fee..............$770 So what do these SHARKS do that gives them the right to charge these insane amounts money for so little work and qualifications???
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24-07-2008, 09:10 AM | #2 | ||
BF Ute...
Join Date: Jul 2005
Posts: 1,351
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Why didnt you just find out about finance at the yard? Or how about just go to your bank?
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24-07-2008, 09:11 AM | #3 | ||
FF.Com.Au Hardcore
Join Date: Dec 2004
Posts: 22,922
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The fact that they can supply money when others can't..
Its a bit like the Motor Finance Wizard, hes always on ACA because of his apparently high rates / jacked cars but people forget that 90% of the people he supplies finance to are bankrupts, so with the increased risk there comes a cost and unfortunately thats life.. For 9 grand your better off talking to your own bank and getting finance that way... Thats if your credit rating is A+
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24-07-2008, 09:30 AM | #4 | |||
FF.Com.Au Hardcore
Join Date: May 2008
Posts: 1,536
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24-07-2008, 09:59 AM | #5 | ||
Banned
Join Date: Jun 2008
Posts: 1,054
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Just organise your own finance, they can charge what they like, but doesn't mean you have to pay for it, just go somewhere else.
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24-07-2008, 09:12 AM | #6 | ||
Bogan w/ Wheels?
Join Date: Dec 2007
Location: Bendigo, Vic
Posts: 296
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They're basically more qualified car dealers mate.
I have great story about my run in with this. Started with me having to sign a form to take a car for a test drive *Which turned out to be a binding contract* then ended them locking my car i owned in there shed when I was inside with the contract. Ended with me having to nearly knock 3 guys out to get my car back and stop the deal going through.
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24-07-2008, 09:24 AM | #7 | ||
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Join Date: Jan 2005
Location: Sunshine Coast
Posts: 1,250
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Tobey, that was through the car yards finance broker.....
LS, Yes I do have an A+ credit rating but because I hadnt organised credit and the salesman said our finance guy happens to be here right now do you want to talk to him I said sure why not.......I will be deffinitely going to the bank now..... maybe I'm a bit slow catching on
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24-07-2008, 09:28 AM | #8 | ||
FF.Com.Au Hardcore
Join Date: May 2008
Posts: 1,536
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When you put a deposit down you always do it subject to finance. So therefore if the yard is a rep yard they will return your deposit. If you don't put down a deposit you can't expect that the vehicle you are purchasing will still be there when you get back. As for the brokers if it is one at a yard (ie a finance manager) you shouldn't be paying for their services as they are paid by the dealership for the work that they perform. You will always have setup\application fees to the finance company but in most cases these are only payable if you go ahead with the loan. I know what I'm talking about Red and if I can be of any help to you please don't hesitate to contact me. This goes for any member of the forum. Nothing p.....s me off more than people being taken by dodgy people in the car industry as it reflects on those of use who are professional take pride in what we do.
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24-07-2008, 04:59 PM | #9 | |||
The Ancient Warrior
Join Date: Jan 2005
Location: The Qld Border Ranges
Posts: 346
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That's not entirely correct. If you put a deposit down on anything, with a rider clause saying, "Subject to finance", you could still be easily caught and also lose your deposit, or even forced to go ahead with the deal, because the car yard is able to arrange finance for you. You may not be happy with the terms, however the rider Clause, "subject to finance" has been satisfied by the car yard and that is all they're interested in. On the other hand if your rider clause stated, "Subject to me arranging finance, satisfactory to me, from the ANZ bank." You would be completely covered if the finance from the ANZ bank, was not forthcoming or not to your liking, then your deposit has to be returned to you and you are not obliged to go on with the deal, because none of your stipulations has been satisfied. It might seem silly at the time, to insert phrases of this type in a rider clause and a yard, or other retailer, might mock you and try to talk you out of adding it but, believe me, when you're making a decision to make a large purchase commitment, like a car, you have to have every base covered, to your advantage. |
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24-07-2008, 11:46 AM | #10 | ||
13.96 @ 101.65
Join Date: Jun 2005
Location: Rockingham WA
Posts: 1,577
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a fee at a finance broker, thats a bit steep!! mine was free.
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24-07-2008, 01:20 PM | #11 | |||
FF.Com.Au Hardcore
Join Date: Dec 2004
Posts: 12,077
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24-07-2008, 01:47 PM | #12 | ||
Regular Member
Join Date: Apr 2008
Posts: 183
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Its also handy to note that car brokers/dealers can also jack up the interest rate up to a certain percentage on top of the lenders rate. About 6% on top of the std base rate is about their maximum, so in effect you are paying them an ongoing income from the rate too.....on top of brokerage fees.
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24-07-2008, 02:06 PM | #13 | |||
Ex EL Falcon
Join Date: Nov 2005
Location: Bris-bane
Posts: 683
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Re car brokers... don't like them. Our new Mazda 3 was bought through the dealer (on behalf of St George) - originally I had decided to go with Suncorp, got approved etc and then the dealer said 'we'll do a better deal'. I didn't believe them but no, they were able to offer us almost 2% less interest rate than Suncorp offered us, less fees, flat early exit fee of $100 and with the added advantage of having the finance finalised on the spot. And yes we did read the contract (my partner is a lawyer so she reads the fine print ALL THE TIME ). I won't even get started on how expensive the Commonwealth's secured personal loans are...
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24-07-2008, 02:28 PM | #14 | |||
13.96 @ 101.65
Join Date: Jun 2005
Location: Rockingham WA
Posts: 1,577
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Quote:
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24-07-2008, 05:56 PM | #15 | |||
FF.Com.Au Hardcore
Join Date: Dec 2004
Posts: 12,077
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e.g. Big TV $3000 24 month interest free OR $2500 if you have cash. The $500 is the fee (not interest) they take for giving you the money. And then if you are silly enough not to pay it out completely they hit you with a squillion percent interest back dated to the day of purchace. Read the tiny writing on your contract. There is no such thing as a free lunch........... |
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24-07-2008, 06:03 PM | #16 | |||
FF.Com.Au Hardcore
Join Date: May 2007
Location: Geelong
Posts: 2,374
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24-07-2008, 07:48 PM | #17 | ||||
Ex EL Falcon
Join Date: Nov 2005
Location: Bris-bane
Posts: 683
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The only real catch with these cards is getting done up the khyber on interest if you don't pay it off in time, which a lot of people don't... If you are silly enough to let that happen then that's the way it is... but the fees are as expected from financial institutes and GE are far from the worst. I recall being charged $160 in fees for 3 months' worth of banking with the commonwealth once. :
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Our Lady of Blessed Acceleration, don't fail us now! Last edited by Hunter; 24-07-2008 at 07:53 PM. |
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24-07-2008, 01:04 PM | #18 | ||
Nate
Join Date: Jan 2006
Location: Regional WA
Posts: 65
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Yep. Brokers get "Introducers Commission" from banks. Generally going through brokers you will end up with your finance through the company that pays the best commission not the one that provides the best rates/service. Generally you should stay away from brokers unless as previously mentioned, the banks themselves wont touch you. In which case you should probably ask if more debt is really what you need.
Do a bit of research on the internet and you'll find a better deal than most brokers anyway. Remember there are more options than the big 4 banks. |
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24-07-2008, 03:00 PM | #19 | ||
B1 - J & D Services
Join Date: Aug 2005
Location: Brim, Victoria
Posts: 1,633
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I do a bit of car and finance brokerage! If you can call it that!
Basically for a flat $150 I: - work out what you can afford - find appropriate finance if needed - work out what you want form a vehicle and narrow down the suitable models etc. - will find the car you want, - at the price you want - work out ongoing service.maintenance deals etc. if needed. I am no one special, no special training or anything like that... But I do have heaps of contacts, knowledge and interest in the vehicle and now the finance market too! I specialise in cars from $500 upwards with the dearest one so far being 120K Rolls Royce... That one was fun... It is not hard to find good deals, as usual you just need to know the right people... For example... Last year was one of my best deals that I have ever done... - Last of the Nissan Pulsars, TI, with auto and all the power options etc with 8000km. - Extended three years warranty, - 12 months rego - Three years free servicing, - One set of new tyres when needed, - Three years comprehensive insurance and roadside assistance, $16,000 drive away!
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24-07-2008, 05:55 PM | #20 | ||
Join Date: Dec 2004
Posts: 9,292
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i actually just sent away for my credit file and it arrived today in the mail.
interesting to see that RAPID FINANCE who i originally was going to go through (stay away from them) had not only agreed to give me credit but on the file it had the sum of $25700. thing is i only asked and applied for $20000 yet they went ahead and got me approved for $25000 without my knowledge or permission. doesnt matter though as i told them to get stuffed as they come back with an interest rate of 24%pa!!! i reapplied through another firm who got me credit through Liberty Finance (the same place that Rapid finance got me credit) and they came back with an interest rate of 18%pa. still high i know but it gives you an insight on how it all works. one company was going to pocket 6% of the interest each year for doing stuff all. greedy bastards. |
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24-07-2008, 07:28 PM | #21 | ||
Regular Member
Join Date: May 2008
Posts: 376
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[QUOTE=davway]
thing is i only asked and applied for $20000 yet they went ahead and got me approved for $25000 without my knowledge or permission. Generally the personal loan amount on your credit file includes the interest charged on your loan so even though you applied for $20000 with interest its around $25000 an interest rate of 18%pa. This is still too high. Unless you are financing through one of the major yards then you generally are better off getting a personal loan (secured) from your current Bank. If the car is acceptable to the Bank for security you should be able to get a rate at worse in the low 10%'s |
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24-07-2008, 06:08 PM | #22 | ||
What's green is gold
Join Date: Feb 2006
Location: Shepparton
Posts: 3,079
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Haha i know a chick that bought a rough EF futura at a place like that, after 5 years it will have cost her $15,000!
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24-07-2008, 07:09 PM | #23 | ||
FF.Com.Au Hardcore
Join Date: May 2008
Posts: 1,536
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As I stated chippitydip if the yard reputable.... This is the key thing guys. If you don't deal with a reputable yard you are in their hands.
I cant stress this enough guys, there is alot of sharks out there. |
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24-07-2008, 08:46 PM | #24 | ||
FF.Com.Au Hardcore
Join Date: May 2007
Location: Geelong
Posts: 2,374
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i won't lie i was young when i was told and still don't understand completly. But when a family member that owns a harvey norman tells you are stupid to buy interest free . You be smart to listen .
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24-07-2008, 10:59 PM | #25 | ||
Regular Member
Join Date: Feb 2007
Posts: 321
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I think some of you guys watch too much ACA/today tonight.
Interest free is not a rort. The only people who complain about interest free are the dumb s who don't know what they are talking about. Case: I purchase $5000 worth of goods on interest free. The interest free period was 36 months. The total profit from the sale was 14% (due to the goods being in a catalogue sale). The interest free period cost the retailer 12%. Even if I was able to negotiate a 5% discount (pretty pointless for the retailer as they would be losing money) I would have only saved $250. Now I agree that $250 is more money than I would want to throw away. But by me using the interest free offer I was able to put my $5000 into a bank account which pays 8% pa for the 3 years. Result: I earn $1200 over the 3 years (would be more when you consider that the interest is paid monthly and would compound). If I had paid cash I "may" have saved myself $250 + monthly account fee of 2.99 per month, which over 3 years is $107.65. End result is I am up over $800. I don't see anything wrong with that. |
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24-07-2008, 11:09 PM | #26 | ||
Regular Member
Join Date: Feb 2007
Posts: 321
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On original topic. Some car brokers are criminals, so are some homeloan brokers.
Just look at what has happened in the US. The whole reason the housing market is rooted over there is due to greedy finance companies writing loans to sub prime mortgage candidates with adjusting interest rates. Bottom line is that so long as you read what your signing everyone should be AOK. |
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25-07-2008, 12:51 AM | #27 | ||
Regular Member
Join Date: May 2008
Posts: 294
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no you don't get it. clearly.
If a TV is ticketed at $3000 then thats what you will pay for it on hoc. but that tv is really worth $2500 so if u pay cash thats what ull get it for. Therefore if u bargain ofcourse the sales assistant is gonna knock $500 off it and the store is going to still break even and profit. WORK IT OUT? The prices are risen when interest free applies and only the dumbs*its who pay $3000 for it with cash should not buy anything. therefore $500 of that 3000 is profited which interms is what? 24 months interest free on a certain interest rating. i hope u, understand that? far out. Hidden fees apply, even to the people that are braindead and cant work it out |
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25-07-2008, 10:12 AM | #28 | |||
Ex EL Falcon
Join Date: Nov 2005
Location: Bris-bane
Posts: 683
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Besides which, you're trying to convince us of something we already know: you pay more when you buy using a means other cash... I thought this was already well known and applied to a lot of different payment methods... What I am saying is that if you use the credit at the RIGHT TIME then you will get a cheaper price - in this instance the xboxes were being sold cheaper than everywhere else so HN could MOVE the stock. Using credit during sales is how you maximise its value. Of course in some sales they won't let you use anything other than cash. I think you lot think I don't get what you're saying: I do, I'm just pointing out that what you're saying is already well known and not some hidden fee that only the high elders of the church of the dollar know about... EDIT: Oh and how do you explain a colleague of mine here who bought a big screen plasma for $500 less than the advertised price... and used his GE card? Maybe the store made a loss who knows but he did get it cheaper and I did see him do it (I helped him move it to his house in fact).
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Our Lady of Blessed Acceleration, don't fail us now! Last edited by Hunter; 25-07-2008 at 10:18 AM. |
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25-07-2008, 10:33 AM | #29 | ||
FF.Com.Au Hardcore
Join Date: Dec 2004
Posts: 12,077
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It is quite amusing to read back over this.
Those who have done the selling or work in the industry all agree that the interest free thing is a scam. Those who have bought interest free all have about a zillion reasons why what they did was far better that paying cash because they could not have made a mistake. It is also interesting to note that HN et al are extending the interest free period and giving advertising an absolute flogging at the moment. It appears that even those who never have any money and never pay their bills on time are not buying anymore which is a sure sign of a slowing economy.... |
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25-07-2008, 03:31 PM | #30 | |||
FF.Com.Au Hardcore
Join Date: May 2006
Location: In my happy place
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