anybody know the legalities in a car dealership providing in house financing for cust

sharp_shooter

Just wondering if there are any regulations on a car dealer or small time car seller offering a personal finance agreement on the purchase of a car with a written agreement between both parties. It is done in America all the time but not here.

Anyone any idea why?

Thanks in advance

Nuttzz

I'd assume that it would be that any financial lending is regulated by the central bank and you'd have to apply for a licence which is why dealers act as agents for banks/leasing companies instead

sharp_shooter

Nuttzz wrote: »

I'd assume that it would be that any financial lending is regulated by the central bank and you'd have to apply for a licence which is why dealers act as agents for banks/leasing companies instead

That's a fair point but if both parties were to come to an agreement would there be a law against? For example, if someone was unable to obtain finance and a person was prepared to offer a payment plan on the car is there a law against that?

pedroeibar1

sharp_shooter wrote: »

Just wondering if there are any regulations on a car dealer or small time car seller offering a personal finance agreement on the purchase of a car with a written agreement between both parties. It is done in America all the time but not here.

Anyone any idea why?

Thanks in advance

Having bought several cars in the US while living there, I never once encountered what you state. Car finance in the US is much the same as it is in Ireland.

The Central Bank and Irish Financial Services Regulatory Authority Act 2003 increased the penalties on conviction of illegal trading in moneylending to a fine of up to €63,486.90 and/or up to five years imprisonment.


The notion is so daft there is no point in making further comment!

sharp_shooter

pedroeibar1 wrote: »

Having bought several cars in the US while living there, I never once encountered what you state. Car finance in the US is much the same as it is in Ireland.

The Central Bank and Irish Financial Services Regulatory Authority Act 2003 increased the penalties on conviction of illegal trading in moneylending to a fine of up to €63,486.90 and/or up to five years imprisonment.


The notion is so daft there is no point in making further comment!

OK so you are clearly missing my point, firstly just because you never encountered it doesn't mean it doesn't happen! I purchased several cars through an in house agreement. I sign a contract with the dealer and I call in every month and pay the agreed amount until the car is clear. Very simple, no financial BS no waiting for approval and not credit checks. Just prove u have a job and get paid enough to make the repayments. If u miss 2 payments the car is repossessed.

Firstly I am not money lending, it is more of a hire purschase... also you seem to be making the assumption I am intending to do this illegally? I am asking would I be breaking the law.... If yes then I intend to figure out what law and ascertain if I can aquire a license to operate legally....

I don't know what is dafter. .. The fact that you think u know so much that I would be daft to comment or the fact that you would even make a statement like that. Please refrain from further comments on this thread unless you are willing to provide some real useful information no just make assumptions that you know who I am or what I intend to do. And as far as your statement about america... you are either lying or just daft yourself to make that comment because if u know anything about the states you know that every state is different and that some are a dam sight different to here so ple as early let's stick to facts from here on in

Thank you for your feedback

delahuntv

Probably hire it out and have agreement that hire charged paid will be deducted from purchase price in xyears. House builders did similar a few years ago.

Basically you still own the car, so risk to you is low. Purchaser has to keep rent payments until final payment and then pays nominal amount to buy.

Once its drawn up properly, there should be no issue.

Might want to give these a ring and run it past them http://www.centralbank.ie/regulation/Pages/home.aspx

Would this be a one off or a regular thing?

sharp_shooter

[Deleted User] wrote: »

Would this be a one off or a regular thing?

I'm thinking regular. Just with low cost vehicles with a small interest fee. I just see that it is difficult for people to buy cars now and if someone wants to buy a cheap reliable car... for say 1500 - 2000 I can buy it and they can pay me a monthly amount. It helps them get mobile and get a start and I make a modest fee for the service. Just an idea I had when a friend complained about needing a car ASAP but not being able to buy anything with tax and test that is reliable for less than 1000.

AltAccount

So basically you want to start some kind of sub prime car rental company?

You'll be taking on all the financial risk, you'll be tasked with chasing up bad debtors etc, on top of being a motor dealer.

What interest rate would you be looking to charge?

hardCopy

AltAccount wrote: »

So basically you want to start some kind of sub prime car rental company?

You'll be taking on all the financial risk, you'll be tasked with chasing up bad debtors etc, on top of being a motor dealer.

What interest rate would you be looking to charge?

You'd need serious capital to finance your initial stock and won't see any return until the first few are near paid off, and then you'll be reinvesting that in more stock.

You'll be more bank than car dealer, is that really the business you want to be in?

sharp_shooter

hardCopy wrote: »

You'd need serious capital to finance your initial stock and won't see any return until the first few are near paid off, and then you'll be reinvesting that in more stock.

You'll be more bank than car dealer, is that really the business you want to be in?

Not quite car rental because the buyer is responsible for the car from when the contracts are signed.

The risk factor is not that high as the cars will all be fitted with realtime gos units until the car is paid off. The car remains my property until the payments are completed. If the buyer does not pay or misses a number of deadlines the car will be repossessed and all payments made remain with the company.

Yes it will take capital but let's say u invest in stocks u risk loosing all your money with little or no control. With this I take my car and grow it... yes it will take time but all investments do. I also get to help out people who can make their life better by having transportation.

Intrest will vary depending on the price of the vehicle and the loan term. It will naturally be higher than a bank as I am offering an alternative for those who cannot obtain credit so there is also the added risk hence an added cost.

My main concern is the legalities of it. As long as I am not breaking any laws and I am not operating without permits that I require than the business has potential. If it requires permits etc then the level of time and investment will determine whether it is worth it or not.

pedroeibar1

sharp_shooter wrote: »

OK so you are clearly missing my point, firstly just because you never encountered it doesn't mean it doesn't happen! I purchased several cars through an in house agreement. I sign a contract with the dealer and I call in every month and pay the agreed amount until the car is clear. Very simple, no financial BS no waiting for approval and not credit checks. Just prove u have a job and get paid enough to make the repayments. If u miss 2 payments the car is repossessed.

Firstly I am not money lending, it is more of a hire purschase... also you seem to be making the assumption I am intending to do this illegally? I am asking would I be breaking the law.... If yes then I intend to figure out what law and ascertain if I can aquire a license to operate legally....

I don't know what is dafter. .. The fact that you think u know so much that I would be daft to comment or the fact that you would even make a statement like that. Please refrain from further comments on this thread unless you are willing to provide some real useful information no just make assumptions that you know who I am or what I intend to do. And as far as your statement about america... you are either lying or just daft yourself to make that comment because if u know anything about the states you know that every state is different and that some are a dam sight different to here so ple as early let's stick to facts from here on in

Thank you for your feedback

Embarrassingly awful.
Asking for legal advice is against the Charter; asking for it/comparing it on the US market is stupid.
I as part of my function in the US had to sit for the agent/broker exams in NYC & in NJ, so I know nothing.. But as you seem to know it all, the best of luck to you.

capefear

Didn't George Mordaunt I think it was try this last year or the year before. He had a lot of ads on donedeal, were you get a second hand car and you pay 200 a month or something. You needed to show payslips and be in fulltime employment. I'll try and find a link later.

Seamus1964

I don't want to sound smart but...All this "small interest fee" and " realtime gos units" feels more like Tony Soprano style of business..
You will break so many laws including privacy protection - a little piece of advice : forget about it

delahuntv

I assumed you were looking at just doing it now and again.

If its a business model, then maybe you will need to get specialised advice, as if something goes wrong the excuse "someone on borads said" won't wash.

It is an interesting model, but you will be dealing with those who can;t get credit from normal sources - and that's for a reason. - Some genuinely nare able to pay, but there are too many dishonest people out there for something like this to be done without sound and verifiable advice both from a legal standpoint, regulatry standpoint and your own financial wellbeing.

Long temr car rental, is probably the best route to investigate. - Windsor Car rentals used to do this on cars that had finished their short term rental life.

capefear

http://www.payasyougoauto.ie/contentv3/


Here is the link I spoke about earlier

dbran

sharp_shooter wrote: »

That's a fair point but if both parties were to come to an agreement would there be a law against? For example, if someone was unable to obtain finance and a person was prepared to offer a payment plan on the car is there a law against that?

If you are going to act as an entity that provides credit to the consumer an any form then you will need to be authorised by the central bank. Hence the reason why the motor dealer will often defer to an existing credit institute that they have an agreement with. I suspect they must get some sort of commission from them as a result etc.

As unfortunately this thread is getting nasty I am going to close it.

dbran