Auto Dealership Financing Frauds and Tips to Avoid It

When people decide to buy a car, they must make wise decisions when it comes to the selection of dealers irrespective of buying a new or used vehicle. Most of the car dealers would be honest but the buyers cannot take it for granted at any conditions. The borrowers must be aware of the various scams in order to safeguard their interests. I have presented some of the valuable tips on how to avoid the auto dealership financing scams.

Financing scams are the most popular ones that prevail in the market. The borrowers might have applied for a loan and the lenders would have agreed to the interest rates specified by them. On taking possession of the car, they might get calls from the lenders informing that the loan was not approved and forcing the borrowers to pay higher rate of interest. The initial rate of interest would have been clearly explained in the agreement which would be termed as “subject to loan approval”. The lenders have got all the rights to disqualify your loan application and might charge you extra $1000 as the finance charges and make you pay $50 extra per month. The borrowers can avoid making a deal if they are sure of having a bad credit. This might be an added burden later in the days to come.

Certain dealers will charge an extra $300 to $900 for the window VIN# etching saying that the bank officials demand this payment. Dealers might say that it is absolutely free and then add the same amount in the fee to cover it up. If anybody says its free, it is highly recommended to get it in writing from the dealer. If they are not ready to do so, then the borrowers must be ready to etch the car itself.

Beware of the credit score scam which might make you lose huge amount of money. Almost all the lenders would underestimate your credit score in order to pull higher interest rates. It is always recommended that the borrowers must take a copy of their credit report from equifax. It is tough for the lenders to deceive when the borrowers can have the proof of credit report.

There are some lenders who will insist you to pay an amount of $2000 for a forced warranty scam by informing that the bank officials demanded it. How is it possible for the bank authorities to trust you for a $22000 loan and not for a $20000 loan. The borrowers can simply ignore such deals or must get that in writing from the dealer.

The dealership preparation scam is yet another famous scam which every customer would have been a victim. An additional cost of $500 would be demanded by the lenders that will cover the labor costs who had removed the plastics from the seats, check the fluids and all the other aspects. However, all these processes are done in the factory outlet and the cost is already covered. People who know this information can argue this fact with the dealers and try to avoid the scam. In a nut shell, do not believe until it is written in the agreement.

Catering Business Financing – Loans, Investors Or Grants?

It is possible to start a catering business with very little capital investment. However, if you want to start out with a reasonably professional operation and you don’t have any savings then you will need some kind of external financing. Here are some of the catering business financing options that you might consider.

Independent Funding

The catering industry can be entered for a reasonably low investment if you avoid setting up your own commercial premises and kitchen. You can cut costs by starting out from your home or renting equipment instead of purchasing it. For these reasons it is wise to save up and fund your catering startup yourself instead of going into debt right from the start.

Things may not go as planned in your first year in business or you may need financing to expand. For these reasons you should try to leave your financing options open for later when you may desperately need them.

Family and Friends

Hitting family members and friends up for a loan is one option that many entrepreneurs try. Be careful here though as you could cause damage to relationships that are important to you if you suddenly find that you are unable to make repayments on schedule.

Bank Loans

Banks offer a variety of loans or lines of credit to entrepreneurs wanting to start or expand small businesses. To increase your chances of qualifying, approach a bank that you have a good account history with. Let them know that you are willing to fund at least some of the startup costs and only need a loan for the remainder.

You will increase your chances if you have a well written business plan to present to them. Having assets that you can use as collateral or someone who can guarantee your loan could also be a necessity.

Investors or Partners

If catering business startup costs seem too daunting then why not split them with one or more business partners. It is even possible to get an investor who will provide you with funding in return for an ownership interest in your business.

Try to make some connections in the catering community either near your home or online and you may find someone who is keen to work with you. Be prepared to sell your idea to partners or investors though as they will be skeptical. You should have a strong catering business plan to show them and you could even go as far as preparing some sample dishes for them.

The downside with this kind of funding is that you lose control. Partners or investors may want to be involved with management decisions and you might find that they want to take the business in a direction that you are not happy with. If you do take this route then make sure that everyone involved knows where they stand right from the start. Get everything in writing if possible.

Government Loans and Grants

Other options for financing a catering business include government loans or grants. The Small Business Administration in the US is a good place to start your search. You must be eligible though and prepared to go through a lengthy application process. Even if you do qualify for this kind of financing then you might face strict controls as to exactly how you can use the funds.

Credit Card Financing

Many entrepreneurs these days are starting businesses by taking out a number of cash advances on their credit cards. While this method is not advised due to the high interest rates involved it may be worth considering if it is your last option. Before going for this method you should be pretty sure that you can start making repayments within a reasonably short period of time.

In reality there may not be one single silver bullet for your funding problems. You might need to combine two or more of the options mentioned above to get to the amount that you need.

No matter which catering business financing options you decide to go with just make sure that all of your startup capital is used wisely.

Car Finance – How to Decide Best Car Loan EMI

Earlier, car buyers had to be fully dependent on the loan officer. Thanks to the various options we have these days, the loan agents have to compete with each other for our car deals. We have the ‘pre-approved loan’ and ‘loan on phone’. Banks yearn for customers. This article will help car buyers get the best EMI on the car loan.

The car finance rates may be high. Yet, the car buyer is the one who gains. Negotiation is the best trick that one can play in the game of car financing. Brush up on your negotiation skills and you will be amazed at how the interest rate and car loan EMI decrease drastically. If a finance agent tells you that the rate and EMI are fixed, ask for the manager. You never know, the EMI may go down.

Do not forget to do your home work. Use the EMI calculators that are present on most car loan web sites. Calculate the EMI for the amount you would have to borrow as auto loan. Compare the EMIs from as many Web sites as you can. It is advisable to later lower down the choice to may be five car finance agents who offer the lowest interest rates and the lowest EMIs. Don’t be happy though, that you’ve got the best car loan deal. You need to negotiate on those interest rates. Even very little amount saved in margin down payment and interest counts. There are enough options available for an average Indian to obtain an auto loan on sensible terms as long as he knows what to ask for and assess what is being sold.

Suppose you take a car loan of Rs 1 lakh for a 3-year term and EMI of Rs 3,331, the amount you would repay at the end of the three-year tenure would be Rs 1,19,916. The extra sum you would have repaid over the principal is Rs 19,916. On a yearly basis, the same works out to Rs. 6,638 or 6.6 per cent a year. This is the flat rate charged by the loan agency.

The reason the rate is so good is because it takes for granted the simple interest, which is not appropriate for our EMI based loan. The flat rate is applicable, if you are allowed to pay only the interest at the end of every year for three years and repay the principal after three years.

Most car loans come with monthly payments in the form of EMIs that include principal repayment and interest charges. Your principal outstanding decreases every month and the monthly interest is calculated on this reducing balance. See to it that you settle for the lowest EMI in order to get the best deal. However, do not forget the interest rate.

Today, car finance agents offer loan tenures as long as seven years that naturally lower the EMI. However, such car loans may not be optimal. You may end up constantly owing more on your car than its worth as your car is depreciating faster than you’re paying your loan off. You will not even be able to sell off your car midway without losing money. Then comes the pre-payment penalty too. You will be happier considering a cheaper car than a longer loan.