These finance companies are thieves

[StrokedXT]

You agreed to the termsof the contract, when you signed it you agreed at the time it was beneficial for you so a bit rich to complain really.

Never understood the whole bank hating phenomenon it's a business and you are free to go to any institution you choose. If you chose poorly it's not the banks fault.

[vztrt]

Originally Posted by 302 XC

Most lending institues have a fee IF paid out within a certain term
Read your home loan cotract
Some banks charge like a 20K fee if paid out within the first 12 months
This fee reduces a bit each year

Its normally there for about 3-4 years, mind you I have never seen it at 20k more like 3k. It was to stop people being on the introductory rate for a year and then looking for a better deal.

[fmc351]

Originally Posted by StrokedXT

You agreed to the termsof the contract, when you signed it you agreed at the time it was beneficial for you so a bit rich to complain really.

Never understood the whole bank hating phenomenon it's a business and you are free to go to any institution you choose. If you chose poorly it's not the banks fault.

I dont think you read it right mate. He isnt arguing against a fee as if he wants to pay it early by a large amount. He simply wants to offload the car now, has 2 payments to go, and wants to be able to settle the loan in full. He is willing to pay the last two payments at the same amounts they would be if the term ran its course. Its really just a bookkeeping thing, no income loss at all.

In other words, the finance co isnt losing any money at all, they are getting every dollar as if the contract ran its term. The OP isnt trying to save himself some interest. But because he wants to change cars now, they want an extra piece just because they can, not because they should be entitled. They think they have him over a barrel, and they are eager to ...

Id be calling them thieves too.

[Rodge]

Originally Posted by GT0132

Sorry still don't get it (maybe a question for dash GT)

You pay tax on your taxable income calculated as your business assessable income less deductible expenses (including depreciation on plant and equipment including motor vehicles). This does not change whether you use the businesses cash, or you obtain bank finance to buy the work vehicle.

While the amount of tax you pay does not change, the cash you have available for other purposes does change given that you have used your own funds and not borrowed.

Correct.
Many clients get confused with the inter-connection between their shareholder current account, net profit and the companies cash earning ability.

The most common mistake for example is that if the company has the resources to buy a new vehicle out of cash flow then that must have come from profit, therefore its taxable income. In actual fact many factors could have influenced the companies ability to buy a vehicle out of cash flow, other fixed asset sales and changes in working capital or stock to name just three.

Having said that for small companies that have few debtors, creditors or stock its often the case that the ability to purchase a vehicle out of cash reserves is inextricably linked to highly profitable trading, (hence the not uncommon misconception that buying such a vehicle is in itself a taxable matter).

For what its worth if you can get ahead of the curve and buy a vehicle outright, look after it and update on a regular basis, say every three or four years for example, its easier to stay ahead of the curve and avoid financing next time with a bit of careful planning, thus avoiding the finance companies alltogether. That said, of course finance costs for the purchase of business vehicle(s) is a tax deductible expense so many people are in the fortunate position of being able to take some comfort from that as well as depreciate them in their books.

[302 XC]

Originally Posted by vztrt

Its normally there for about 3-4 years, mind you I have never seen it at 20k more like 3k. It was to stop people being on the introductory rate for a year and then looking for a better deal.

It also stops people who refinance then want to sell the property
IE getting that 100K equity, buying stuff , then sell the house

[phillyc]

Originally Posted by Supercharged

The Nitro Turbo ute is being replaced with a FPV GS ute.

Glad to hear the fee is sorted. But most importantly. CONGRATS on the purchase of the new FPV GS!!!!

[GT 160]

I understand your point and they could have easily waved the early term fee as they have but you signed a contract and under the terms you were required to pay an early term fee.

Reminds of when i worked for GE and i'd have people abusing me daily for what was apparently my fault that they were in arrears and being slugged with 20%+ interest. Everybody else's fault but there own, nobody forced a gun to there heads to sign the contracts.

[Iggypoppin']

Originally Posted by fitzwa

I understand your point and they could have easily waved the early term fee as they have but you signed a contract and under the terms you were required to pay an early term fee.

Reminds of when i worked for GE and i'd have people abusing me daily for what was apparently my fault that they were in arrears and being slugged with 20%+ interest. Everybody else's fault but there own, nobody forced a gun to there heads to sign the contracts.

I had a GE creditline card when I purchased my wheels and tyres each year, I read the fine print very carefully before I signed off on the wheels. $1000 card with %0 interest for 12 months, payments deferred. I usually paid about $400 off with my own money then used my tax money to pay off the rest. I knew if I didn't and I let it go till after 12 months, I'd be on %25 or so interest. They are good tools (creditline cards) if you know how to use one responsibly.

[Professor Farnsworth]

Originally Posted by Iggypoppin'

I had a GE creditline card when I purchased my wheels and tyres each year, I read the fine print very carefully before I signed off on the wheels. $1000 card with %0 interest for 12 months, payments deferred. I usually paid about $400 off with my own money then used my tax money to pay off the rest. I knew if I didn't and I let it go till after 12 months, I'd be on %25 or so interest. They are good tools (creditline cards) if you know how to use one responsibly.

Yeah been there done that, many years ago. Ended up on 28.5% Lesson learned, i'll never touch credit again unless i have to.

[GTpilot]

Originally Posted by Iggypoppin'

I had a GE creditline card when I purchased my wheels and tyres each year, I read the fine print very carefully before I signed off on the wheels. $1000 card with %0 interest for 12 months, payments deferred. I usually paid about $400 off with my own money then used my tax money to pay off the rest. I knew if I didn't and I let it go till after 12 months, I'd be on %25 or so interest. They are good tools (creditline cards) if you know how to use one responsibly.

My partner and I use them interest free cards all the time, We buy loads of stuff with them. Currently we have about 10k owing across a couple of cards.
Now having said that we also have just over 20k in additional payments made on our home loan, so we are covered, but that is saving on interest too, and is available for use to redraw at any time. When the 12/18/24mth Interest free term is up, redraw from the homeloan and pay it out.
10k extra on our home loan over 18mths is around $1k in interest saved, Buy now, keep OUR money elsewhere, Pay later... Save on interest -Thanks GE!

[ray38l]

Originally Posted by Professor Farnsworth

Yeah been there done that, many years ago. Ended up on 28.5% Lesson learned, i'll never touch credit again unless i have to.

i almost got stung by the high interest. It wasn't that i couldnt afford to pay it off, i just forgot because there were no repayments required till the interest hit. 2 days before the interest hit i got another credit card with 6 months interest free to pay out ge.

[sarrge2001]

It pays to do your homework......

When i leased the Turbo, i went with Esanda at an interest rate of 9.6%. I could have also done a novated lease through work (there is a company here that pushes pretty heavily) but when i compared the breakdown of costs i couldn't work out why the finance componant was so much more expensive that what Esanda quoted me.

Turns out that the novated lease finance rate was just over 14% but getting that information out of them was like pulling teeth......

[aussie muscle]

Originally Posted by Rodge

What has happenned to the lost art of saving up for things ?

only drug dealers buy new cars with cash!

[cedric]

Originally Posted by hawke

Supercharged,

You may need a new accountant, or there was some miscommunication.

Purchasing a business vehicle for cash allows you to take depreciation of the asset as a cost. If financed, interest or lease payment are a cost. Both are limited by value of vehicle and or private use and your GST ITC entitlement.

totally agree. i pay cash for my work vehicles and claim them 100%

[The Yeti]

Originally Posted by hawke

Supercharged,

You may need a new accountant, or there was some miscommunication.

Purchasing a business vehicle for cash allows you to take depreciation of the asset as a cost. If financed, interest or lease payment are a cost. Both are limited by value of vehicle and or private use and your GST ITC entitlement.

this is how I understand it

[EAK33Y]

People get sucke din everytime with GE and all those credit lines

I work for a Building society and people just get silly with the intrest free cards and spend it even if they cant pay it back.We have a GO mastercard with 2k oweing we only spent 3k on a new lounge and our limit was 10k with a home loan of 250k and we just earn over minimum wage.

We probaly get 2-3 people a week wanting a Personal loan to pay out GE because they spend too much and cant pay it back before the intrest free period is over

Asmuch as i would love to spend the other 6k on movie room i know i cant afford it

[Powdered Toast Man]

I bought my BA using the now defunct Ford Credit and they had an early payout fee but it reduced depending on how early the loan was payed out.

I payed it off (36K loan) about 2 years early and ended up paying about a $300 early payment fee. But it was a loan with monthly calculated interest and I saved about 5 grand in interest payments so I didn't mind.

If they used a $800 flat rate fee I would have told them to stick it, especially paying it out only 2 months early.

[fmc351]

Originally Posted by Powdered Toast Man

I bought my BA using the now defunct Ford Credit and they had an early payout fee but it reduced depending on how early the loan was payed out.

I payed it off (36K loan) about 2 years early and ended up paying about a $300 early payment fee. But it was a loan with monthly calculated interest and I saved about 5 grand in interest payments so I didn't mind.

If they used a $800 flat rate fee I would have told them to stick it, especially paying it out only 2 months early.

Imagine how insulting it is when you offer to pay not only the last two months payments, but also the interest that would be owed if the payments were made normally, and they still try to hit you up for the $800 simply because you paid them in advance.

Its not like he is trying to save a few bucks on the loan, he is paying it in full, with the full amount of interest. He just wants to upgrade now, not in 2 months.

Thats how I read the OP anyway. And if Ive read it right, they are thieves.

[sudszy]

I gather the changeover to the newer car couldnt be made without paying it out or could it?

The only justification I see from the finance company for charging if you pay out early including paying out the interest as if it went full term is that they depend on making their existence by people not making their payments on time and the loan going longer than the original plan?

If they can insist on people having to wait until the time has elapsed before they pay, maybe there is more chance the people will lose their money in the mean time, figuring that's why these people needed finance in the 1st place, they are bad money managers.

[93EB_SXR6]

...and Sudzy has arrived!!!
I predict a "closed thread".

Finance companies are thieves, which is part of the reason I buy older cars/don't have a huge tv.
My brother has a similar loan on his BAII ute for his electrical business, not sure what bank he's with but he's very happy with it so I'll ask him about it next time I'm down his way.