As a general point the UK appears to have gone "loan crazy".
loans against the house, loans against the pension, loans to pay loans, loans to buy cars, etc. etc. All very worrying.
However, I heard one on the radio this morning about "Log Book Loans".
Apparantly, if you have a car without finance, you give them the log book, they lend you 40% of the value of the car, and you keep the car to drive around in.
And they emphasised "no credit checks".
Presumably they take the car if you don't pay.
I didn't catch what the interest rates or repayment terms were like.
However, surely this is a daft idea and is almost irresponsible in that it may lead people with bad credit histories, or insufficient dosh to pay the loans, into further credit issues. No doubt resulting in them losing 100% of their car to service the 40% they borrowed.
Or am I missing something and its really a very good idea ??
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>>Or am I missing something and its really a very good idea ??
Yep! A brilliant idea for the loan sharks...
This keeping-up-with-the-Jones' attitude which seems so prevalent is going to be the ruination of the economy (once again!)
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The UK consumer hasn't cottoned on to the effects of low inflation, meaning that they still accept paying interest rates of 20% or more whilst earning 2% on any savings.
At the same time their income is only going up by around 3% per annum, so the debt is not being eroded.
Also house prices are going up by 20% so if you need a larger house for a growing family the gap between what you get for your existing property and what you need to pay for the next rung on the ladder becomes unbridgeable.
A lot of people are going to land up in deep trouble before the message hits home.
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What is to stop someone taking out a loan, not mentioning that they were going to buy a car with it then borrowing further money on that vehicle? If there are no credit checks then there is no way of telling whether the vehicle was bought with actual hard cash.
teabelly
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Whats stopping someone getting a duplicate V5 and then selling the car to some unfortunate punter ?
I wonder if these loan companies register thier intereset with HPI ?
As for the borrowing levels in the UK it will lead to big problems if the economy slows/unemployment goes up... Of course you could take out another loan to consolidate your other loans with affordable repayments and cash to spare for a new car or holiday... (who falls for this nonsense ??)
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log book is not proof of ownership anyways
my dad drives a car that i own, but his names on the book cos he is the keeper in all senses but ownership
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Of courseyou could take out another loan to consolidate your other loans with affordable repayments and cash to spare for a new car or holiday... (who falls for this nonsense ??)
Me, for one. I'm still trying to repair the results of youthful indiscretion (on reflection, buying a Triumph 2000 with a credit card wasn't a great idea) and I'm quite happy to lump all my storecards, credit cards etc into a loan at 7.9% interest, where the amount I am paying each month in capital and interest ends up less than the interest alone that I was paying before.
What people tend to forget, when they start lecturing others on the foolishness of borrowing money, is that you can only take this attitude if you either have plenty of money to start with, or are happy to use public transport to get everywhere for a couple of years while you save up for a car. (Or indeed live in a cardboard box for 15 years while you save up for a house). The entire lifestyle of an awful lot of people is effectively funded by borrowing against the future increase in the value of their house, and if you stop people borrowing, most new car buyers aren't going to be able to raise the cash to buy anything more expensive than a Perodua Nippa. Which won't be a lot of fun for those of us who let other people take the depreciation hit, and then buy lovely fast luxury cars for about one-tenth of their original value.
Having said which, the golden rule is never to offer any security for the loans (except on your mortgage, where you don't have any choice). Pledging your car as security against a loan is a really bad idea, and if your financial circumstances are so poor that you can't get unsecured credit, then it's odds-on that you will fail to keep up the repayments and lose your car. It's not a new idea - pawnbrokers have been doing this for centuries - but if you find yourself tempted by one of these offers, you might be better advised to start reading up on bankruptcy laws instead.
Richard Hall
bangernomics.tripod.com
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You can pledge anything in the Philippines and most families have something in the system at any one time, jewelry against school fees or medical bills or graduation parties or something. Interest rates are, sit down before you read this, quite legally, all lenders have to be registered with the Stock Exchange, 2-3% per cent PER WEEK.
In fact a certain amount of my retirement income comes from investing in this system, coincidentally as it happens, a group who specialise in lending against vehicles. Well, it beats any bank, and your money's safe.
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...there's a new law coming in as from 1st November whereby you cannot tax a car you have just bought unless you have the V5. So no more combined taxing of cars and applying for the V5 at the same time...<
I don't understand why they would do this... I bought a car last year and another this year with no V5 (from BCA auction) and got the tax/V5 application in together. If I have to wait till I get the V5 before taxing them, what am I supposed to do, wait 6-8 weeks before taking it out of the drive? What is the upside for the authorities?
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I don't understand why they would do this... I bought a car last year and another this year with no V5 (from BCA auction) and got the tax/V5 application in together. If I have to wait till I get the V5 before taxing them, what am I supposed to do, wait 6-8 weeks before taking it out of the drive? What is the upside for the authorities?
The upside is that it will lead to most cars without a V5 being unsaleable. This will cut out many dodgy deals. The Vendor will have to make sure there is a current V5, or will have to accept a lower price to allow for the Buyer's 6-8 weeks car-unusable time.
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>>The upside is that it will lead to most cars without a V5 being unsaleable. <<
But many (most?) cars sold by second hand dealers have no tax. If you buy a car without a V5 you are taking the same risk, just with added inconvenience.
It suits the private buyer anyway, I just bought another car at auction today with no V5 (but with full service book). It is cheaper for me as traders don't want the inconvenience of applying for a V5, while I don't care, hence less competition. And this was an absolutely spotless 'forecourt ready' car too.
>>to allow for the Buyer's 6-8 weeks car-unusable time. <<
The car I bought last month had no V5 either (can you spot a trend here?), but it came through today after just 3 weeks.
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Theory of Supply and Demand explains all these activities.
As the saying goes "Your bank will willingly lend money to you at preferential lower interest rates if you can prove that you are finacially strong so as not to require the loan in the first place". Anyone else has to pay more and those that can least afford it have to pay the highest rates of interest. This is all "common sense" in Economics theory.
With regard to arguements about house prices being too high, people having to borrow too much, etc., again it is all a question of supply and demand; and eventually the market will roughly balance everything out. Eg. If prices rise too much, people eventually cannot afford those houses; prices drop, and balance is restored.
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yea but prescott and friends are bucking the market by planning to build a whole set of "afordable houses for essential public workers" which over the course of a few years will just become another set of run down council estates
every public worker I know wants the money putting in their pay packets so that they can make the choices not some politician
the reason there are no doctors and nurses willing to work for long in some parts of the country is because they arent paid a market wage for those areas
also the free market in houses is being policitically held back because areas where the free market would sensibly build new hosues are being held back on some "king canute" idea that by preventing house building the people are going to choose to live in some run down S**thole somewhere else
house prices will crash, but lots of the current problems are to do with politicians meddling in peoples free choices
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also i object to the way the list of public workers that are listed as "essential", its easy to list health and emergency workers, but if you dont have some of the less visible public servants the community is just as badly affected, as it is people doing some jobs in the expensive parts of the country are doing it largely for love
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"the reason there are no doctors and nurses willing to work for long in some parts of the country is because they arent paid a market wage for those areas"
This is the fault of national pay scales. If you can walk to work in Sunderland but need either to pay £3,000 p.a. for a season ticket to get to work in London or pay £400,000 for a house in London so you can walk to work how can the pay scales be the same?
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I thought there were weighting allowances to alleviate regional differences.
And I'm not anti-public servants at all, but they really DO live in another world sometimes when it comes to pay demands (generalisation I know). I haven't had a rise for over two years now, and my job is on a knife edge. I often work a 10 hour day (or more) for no overtime. (I know I'm a fool...)
AFAIK public servants usually get a cost-of-living rise related to inflation, then get a merit rise (albeit small) on top.
Also there usually is greater job security and much better pension arrangements than many others get. Going "long term" sick or having a baby doesn't usually threaten your liveliehood. Leave entitlements are often quite generous, as is training availability and (if the worst should happen) redundancy packages.
The downside is of course that salaries are lower. You can't have everything...
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yea but prescott and friends are bucking the market by planning to build a whole set of "afordable houses for essential public workers" which over the course of a few years will just become another set of run down council estates
This meddling will soon fail of its accord. Without going in to too much detail about economic theory, the reasons Prescott will fail are:
1. You either have a free market or communism. We all know the state of the countries that choose to folow the communism path.
2. Every employee in any industry sees himself/herself as a key worker.
3. Prescott's idea of the affordable housing does not tie in with the aspiration of the key workers he has in mind. It is like his idea for a fair transport system: that "Two-Jags" are the minimum number of cars he needs, everyone else can go by bus.
Regarding the pay/location/cost-of-living argument, supply-demand economics eventually take care of these imbalances. However, public services in the UK are somewhat shielded from true market forces and so take longer to get in line. Although the pay of nurses/teachers etc. appears low on the face of it, when their overall job-security and lifetime costs-benfits are taken in to account (especially the infation proof pensions), they are far better off than those who work for public companies.
If these public service workers were that unhappy, they would soon leave to find jobs outside. But they do not!
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Re "Every employee in any industry sees himself/herself as a key worker." I dont see myself as a key worker (dont tell the boss)
I agree the public services are a shambles and lots of them couldnt hack it in the good old free market
but job X pays the same in Oxford, Reading, Huddersfield, Remote bit of Scotland - which can mean for a public sector worker doing job X they can be relatively well off in Huddersfield but on the bread line in a shared house in Reading
National pay scales in the public sector are a big problem, because they do not reflect what is happening in the outside world
We do have some great people trying to do their best in job X in expensive places and I feel sorry for them, while at the same time I get upset at all the poor public servants that would have been sacked years ago in any private enterprise I've seen
Oh and some public sector staff are on (for instance) three year contracts nowadays
re "If these public service workers were that unhappy, they would soon leave to find jobs outside" some of them continue for the best of reasons because they love the people they serve, but may as well be working for charity for the money reward they get
Free market is the way to go, get rid of labour control freak society
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>Oh and some public sector staff are on (for instance) three >year contracts nowadays
The vast majority of new recruits in the public sector are on three year contracts or shorter. It takes a while to filter through, but the idea that conditions are better there is way out of date. In higher education the short-term contract figure is around 60 percent of all staff, and a great many of them are paid by the hour, with no pension, no redundancy, and no pay over the summer. Only catering is more casualised. My wife works in a top-rated department in a good redbrick university. Over the last three years they've recruited nine new staff members, only one of whom is on a "permanent" (that is, open) contract. Only three are still working there this autumn. Most have gone to other jobs, which is exactly what I did. I'm self-employed, and apart from the pension I have a much easier life than she does. I work much shorter hours for the same net pay. I also have a properly furnished office, with a non-leaking roof and an up to date computer (her office pc is a 486). I worked in the public sector for ten years, and it was a constant struggle to find money for anything, from office furniture, to stationary, to repairing the roof.
Incidentally, it's not a choice between Communism and the free market. Most Western countries have a blend of market and social economic policies. The free market has made a complete dog's breakfast of Russia these past ten years. But then I suppose they can always sell the nukes...
Chris
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"> I agree the public services are a shambles and lots of them couldnt hack it in the good old free market<"
Public services work in countries where social spending is high, eg France, Germany. Low social spending = poor public services.
The *free market* does not exist anywhere in the world, the term *free market* implies that the consumer has full knowledge of the prices of all products/services .... which is difficult.
Of course, if you think the level of social spending in the UK is too high, you can take the free market option and emigrate.
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I love the terms "Loan" and "Borrow" when it comes to money. You might loan me your hedge trimmer and you might borrow my camera, but no financial institution will ever lend you their money. They will sell it to you, and if they were honest to admit that and remind you that they were charging you £1.30 (for example)for every pound you bought off them it would make a lot of people think twice before they got into debt. Credit makes the world go round, but an awful lot of people drown under their debts.
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Supply and demand is not so simple for housing, for starters because the price you buy a house for isn't the price you end up paying. (Unless you go 'ere mate' and whip out a donkey choker wad of cash there and then.) Its monthly repayments that also determine demand, so with low interest rates the demand goes up as does the emperors new clothes house price merry go round. But after purchasing, these rates may well go up from here and suddenly "oh shet", price crash.
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comments removed as they infringe the site policy on no naming / shaming - DD
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Just to try and ease this back towards motoring...
It is noticeable that vehicles with UK number plates visiting this part of France seem, in the main, to be large, shiny, recent 4x4s. It's a bit like the American SUV syndrome in miniature.
You don't see this with vehicles carrying German, Dutch, Belgian or Spanish plates.
Presumably Brits buy these motors because they can finance them against their houses - but will we be seeing so many of them next summer, or the summer after?
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Wow - that's an old thread. I'd have just deleted his comment, whatever it was, and let it rest in peace!
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Oops! Never looked at the date! RIP
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Wow - that's an old thread. I'd have just deleted his comment, whatever it was, and let it rest in peace!
or rust in peace................(sorry missed wat wos wroted)
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