Idiots and their money.
Discussion
Went over to Mothers house today as you do, my brother is 18 and one of his mates was there, so we got chatting about cars, work etc etc. The usual as I haven't seen them all for a while, I'll set the scene.
This kid is also 18, works as somewhere training to be an engineer for something or rather, bit of a chav, but a nice chap underneath, earns about a grand a month he says. Comes from a fairy poor background and is the kind that would wear sportswear out in the evening, but for some reason my brother still likes him...
So he's telling me about this Saxo VTR he has put a deposit down on (it looks f
king awful btw, body kit, stupid exhausts, awful bonnet, 18 inch wheels etc) it was £2500. He tells me he has got a loan for £3k to cover the car and a sound system. I start to question more as I did the same thing when I was 18 (got a loan to buy a car) turns out he asked his bank, who said no, he was then phoned (as you do when they sell your details) by yesloans or someone, and they have managed to get him the money, he just had to get his mum to be a guarantor and they would give it to him.
So I would guess they sent out the paperwork etc, and it was signed by his mother and him. I ask him what the APR on the loan i and how long the term is. Its a 3 year loan, and the APR is 60%, he says. So he pays back around 5.5k when all is said and done. Not to mention the insurance is £2k per year too.
What fking planet does his mother live on, this is why people get into so much debt isn't it, is this yes loans fault or him and his mothers?
When I said I got a loan I was earning more than that, and I also got a fairly good rate of 11%, but I regret it, and I wasn't living at home and didn't need to get a guarantor, my mother would have not let me do it.
This kid is also 18, works as somewhere training to be an engineer for something or rather, bit of a chav, but a nice chap underneath, earns about a grand a month he says. Comes from a fairy poor background and is the kind that would wear sportswear out in the evening, but for some reason my brother still likes him...
So he's telling me about this Saxo VTR he has put a deposit down on (it looks f
king awful btw, body kit, stupid exhausts, awful bonnet, 18 inch wheels etc) it was £2500. He tells me he has got a loan for £3k to cover the car and a sound system. I start to question more as I did the same thing when I was 18 (got a loan to buy a car) turns out he asked his bank, who said no, he was then phoned (as you do when they sell your details) by yesloans or someone, and they have managed to get him the money, he just had to get his mum to be a guarantor and they would give it to him.So I would guess they sent out the paperwork etc, and it was signed by his mother and him. I ask him what the APR on the loan i and how long the term is. Its a 3 year loan, and the APR is 60%, he says. So he pays back around 5.5k when all is said and done. Not to mention the insurance is £2k per year too.
What f
king planet does his mother live on, this is why people get into so much debt isn't it, is this yes loans fault or him and his mothers? When I said I got a loan I was earning more than that, and I also got a fairly good rate of 11%, but I regret it, and I wasn't living at home and didn't need to get a guarantor, my mother would have not let me do it.
Incorrigible said:
If he can afford to re-pay it what's the problem
They didn't force it on him
Well he can I guess, but that's if he doesn't get greedy, an lord knows what happens if he stacks it, like he did the first saxo.They didn't force it on him
I just find it incredible his mother would let her 18 year old son take out a 60% apr loan...
wiffmaster said:
I didn't know that you could specify a guarantor if you made a loan! What a business model; loan at a ridiculously high rate with virtually guaranteed payback. These guys must be raking it in for sod all risk...
Bear in mind this is wat the kid told me, it might not be the case. But it seemed that when I sold cars any kid could get the finance at a silly rate if they got guarantor...Madness.
Welcome to the world of fools and money. I was regualarly offered loans of up to £10,000 after I declined a stupid compnay's offer for £12,000 insurance on my Scooby, and I suppose if you don't know how much cars cost you'll be happy someone's putting you out of your misery and helping you pay for insurance.
Friend of mine spent about £9000 on a 2008 Ford Ka... bit excessive, don't you think? Specially as the new one has come out, and he's still paying £9000 for his, when it's really worth no more than £4000 now.
Friend of mine spent about £9000 on a 2008 Ford Ka... bit excessive, don't you think? Specially as the new one has come out, and he's still paying £9000 for his, when it's really worth no more than £4000 now.
wiffmaster said:
I didn't know that you could specify a guarantor if you made a loan! What a business model; loan at a ridiculously high rate with virtually guaranteed payback. These guys must be raking it in for sod all risk...
A bit like the National lottery company then or the GubermentNot meant to be antagonistic, but have you seen what a normal payback is on a 25 year mortgage?
If you have a look at the key facts illustration, it's normally, give or take, double what you borrowed.
Of course, you'll end up with an asset worth a damned sight more than a second hand Paxo, but still, the overall interest is scary.
60% is ruddy ridiculous though if he's got a guarantor, he surely could have got a better deal than this?
All the more reason for 'finance' to be taught in schools, he probably has no idea how much he's just had his pants pulled down!
If you have a look at the key facts illustration, it's normally, give or take, double what you borrowed.
Of course, you'll end up with an asset worth a damned sight more than a second hand Paxo, but still, the overall interest is scary.
60% is ruddy ridiculous though if he's got a guarantor, he surely could have got a better deal than this?
All the more reason for 'finance' to be taught in schools, he probably has no idea how much he's just had his pants pulled down!
Flanders. said:
A mate of mine is 18, he's got a loan so he can buy a Corsa VXR, the car cost 13k and he's paying back 25k. He had to get rid of his flat to pay for it.
What the F**k is wrong with him????I know, i know, each to their own, its his choice, what other people do with their money etc etc
But really!?
I really need to get into the money lending business and take advantage of these fools!
Some people will get a car at any cost, the stupid thing is that if he has saved some of this money he's earning he probably could afford the car in about 4 months (i'm assuming he lives with his parents)
My cousin is the same, has hardly any money to his name, has a kid, is about 25, lives with his rents, but decided to go out and get finance on a honda civic costing about £7k, with a 40% apr
Some people will get a car at any cost, the stupid thing is that if he has saved some of this money he's earning he probably could afford the car in about 4 months (i'm assuming he lives with his parents)
My cousin is the same, has hardly any money to his name, has a kid, is about 25, lives with his rents, but decided to go out and get finance on a honda civic costing about £7k, with a 40% apr
okgo said:
Bear in mind this is wat the kid told me, it might not be the case. But it seemed that when I sold cars any kid could get the finance at a silly rate if they got guarantor...
Madness.
I just checked it and apparently you can require a guarantor! I thought guarantors only applied to things like property rental.Madness.
I suppose the risk is that the guarantor will also default on the loan. But, assuming you're making low value loans and the person defaults, you'd expect either the loan payer or the guarantor to have sufficient assets to cover the debt. It seems like a pretty sound business model.
wiffmaster said:
okgo said:
Bear in mind this is wat the kid told me, it might not be the case. But it seemed that when I sold cars any kid could get the finance at a silly rate if they got guarantor...
Madness.
I just checked it and apparently you can require a guarantor! I thought guarantors only applied to things like property rental.Madness.
I suppose the risk is that the guarantor will also default on the loan. But, assuming you're making low value loans and the person defaults, you'd expect either the loan payer or the guarantor to have sufficient assets to cover the debt. It seems like a pretty sound business model.
Sounds like a fantastic business. A ton of profit if you can live with being a true cock. I realise that fundamentally all businesses are about exploiting clients' lack of knowledge, ability etc but, given debt can be so destructive, taking advantage of people who don't know any better is still a bit distasteful.
But yeah, maybe I could start a Zopa competitor that has just one button: "GIMME CASH!!" and lots of direct marketing. Anyone want in?
But yeah, maybe I could start a Zopa competitor that has just one button: "GIMME CASH!!" and lots of direct marketing. Anyone want in?
maser_spyder said:
Not meant to be antagonistic, but have you seen what a normal payback is on a 25 year mortgage?
If you have a look at the key facts illustration, it's normally, give or take, double what you borrowed.
Of course, you'll end up with an asset worth a damned sight more than a second hand Paxo, but still, the overall interest is scary.
60% is ruddy ridiculous though if he's got a guarantor, he surely could have got a better deal than this?
All the more reason for 'finance' to be taught in schools, he probably has no idea how much he's just had his pants pulled down!
Given, empirically, the asset outperforms the interest over the 25 year, this is a "good investment". Of course, past performance is no guarantee of future performance etc etc.If you have a look at the key facts illustration, it's normally, give or take, double what you borrowed.
Of course, you'll end up with an asset worth a damned sight more than a second hand Paxo, but still, the overall interest is scary.
60% is ruddy ridiculous though if he's got a guarantor, he surely could have got a better deal than this?
All the more reason for 'finance' to be taught in schools, he probably has no idea how much he's just had his pants pulled down!
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