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Different types of Financing Approvals

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BY JELANI DANIEL

In my previous column, a brief summary of what financing entails was provided, breaking down how banks, dealerships, and brokerages handle various financing and loan options to buyers. Financing, as a whole, is one option, but within the bubble of financing, there are leases. Each option suits various lifestyles and credit scores. Today, I will outline three different types of lease options and what they contain, letting you see first-hand which option is most suitable for your needs.

Note: Financing approvals are often based on current credit scores, so some options may be unavailable to those in different credit brackets.

FINANCE LEASE:

A lump sum is not required in this case since the purchaser of the vehicle is the financer. The financer will take possession of the car, and much like a landlord, issue monthly charges to the leasee. There is no need for a large deposit or time-consuming loan. Such lease options are great if you are looking for an automobile quickly and have little to no initial capital to invest.

The driver has responsibilities that include the residual risk and general upkeep. At the end of the agreed upon lease term, the leasor has the option to refinance, buy, or trade-in the car.

OPERATING LEASE:

An operating lease is very similar to a finance lease, but the residual risk mentioned above does not apply. Instead, the car is paid month-by-month and can be obtained quickly. The leasee can continue to rent the vehicle or upgrade to a newer model at the end of the lease term.

COMMERCIAL HIRE PURCHASE LEASE:

The financer obtains the automobile initially from a manufacturer or dealer. The vehicle is then granted to a leasor, and upon completion of payments, is bought by the leasee. When the loan is paid off, the hired renter can then take full possession of the car. This allows the use of monthly payments without a hefty initial deposit.

The three options listed above include no down payment as well as standard and fixed rates. This gives the leasor sensible options when considering which automobile they would like to obtain. As well, tax-deductions may be issued on the operating leases as well as the finance leases, so speak to your broker today to see which option suits you best.

 

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Automotive

Top Caribbean Celebrities and Their Exotic Cars

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BY: MALIAKA BRYCE

Each quarter I take time out to update my Vision Board – a task that helps me stay focused on achieving my goals. Exotic cars are my weakness and motivator of choice. Dreaming of driving a sexy V12 makes me work a little faster and harder. My latest vision board inspiration comes from four of my favorite Caribbean Celebrities and their dream cars.

  1. Nicki Minaj – Trinidad and Tobago

This island girl owns a few beautiful cars, most of which are bright pink including her Lamborghini Aventador valued at $400,000, and Bentley Continental GT worth $250,000. She was also spotted in a $500,000 Maybach 62S boosting a 12-cylinder twin-turbo engine with an astonishing 604 horsepower and 738 lb-ft of torque.

Onika Tanya Maraj was born in Trinidad and Tobago and raised in Jamaica and Queens, New York. The rapper/actress released three platinum-selling albums, Pink Friday, Pink Friday: Roman Reloaded and The Pinkprint. Her album sales coupled with her various movie roles and stint as an American Idol judge, helped Minaj earn approximately $70 million in her career, according to celebritynetworth.com.

  1. Bob Marley – Jamaican

During his lifetime, Bob Marley owned a number of luxury vehicles including a BMW, Land Rover Defender & Mercedes 500SL.  Nesta Robert Marley was the world ambassador for reggae music and one of Jamaica’s biggest superstar singers, musician and songwriter selling over 25 million records throughout his career. To celebrate Marley’s 70th birthday, Jamaica’s Land Rover dealership and the Marley family fully restored Bob’s classic Land Rover truck to its former glory. The vehicle is now on display at the Bob Marley Museum in Kingston Jamaica. The Marley estate is said to be worth over $130 million dollars placing him on Forbes Magazine’ list of the five top-earning dead celebrities.

  1. Wyclef Jean – Haitian

Wyclef owns an exotic car collection of over 37 cars including a $1 million dollar – Mclaren F1 “The fastest car in the world” and the rarest most expensive cars in the world, the Pagani Zonda C12 at $1,400,000.  Wyclef’’s cherry red C12 is one of only three in America. Wyclef Jeanelle Jean is a world famous singer, rapper, musician, actor, and politician. Jean moved to the States from Haiti at the age of nine and rose to fame as a member of the Fugees, winning three Grammy Awards for his work in music. According to People with Money Magazine his property holdings, endorsements, restaurant chain, football team, Vodka, perfume and fashion line puts Wyclef’s net worth over $146 million

  1. Usain Bolt – Jamaican

Bolt is the fastest man alive and the richest runner in the history of track and field and owns a fleet of very fast vehicles including the Nissan GT2 worth over $100,999 custom designed and finished in real gold, Ferrari F30 Spider and a Ferrari 458 valued at over $291,000.00. The Olympic 100m and 200m champion sprinter has endorsements from Puma, Gatorade, Virgin Media, Visa, a best-selling autobiography and commands an appearance fee ranging from $250,000 to $500,000. It is estimated that Usain is worth close to $100 million.

So, keep dreaming big – because if they can do it – so can we… Right?

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Automotive

Three Tips for a Rust-Free Winter

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BY: MALIAKA BRYCE

This may just be the world’s fastest crash course on rust prevention ever written – well maybe not ever but, by the end of this article you will have learned the basics as it relates to rust on your car and how to handle it.

Rust 101

What is Rust? In simplified terms, when iron meets water and oxygen the result is rust.
Vehicles made with iron based products will eventually show signs of rust. The goal, therefore, is to use protection as a method to extend the life of the vehicle. Most cars will rust in two to three years if unprotected. However, once treated and maintained an average car will show little signs of rust for up to five to six years which happens to be the average length of time most Canadians will keep a vehicle. Preventing rust is important to the potential reselling value of the vehicle and should not be overlooked.

Where Does Rust Start? The paint job is the car’s first line of defense against rust. Once the paint is nicked, scratched or exposed corrosion can start to form in those areas. Rust often forms anywhere two iron parts rub together such as the doors, hinges, etc. The undercarriage of the vehicles is also often prone to rust. Salt, dirt, sand, damp weather, heavy snow, and carbon elements all help to speed up the rate at which the iron will start to rust or corrode.

How to Prevent Rust? These are the three basic steps necessary to increase the life of the vehicle and prevent rust: Keep the car protected/oiled, clean, and dry.

1. Keep it Protected and Oiled: Rust proofing spray/undercoating is currently the most popular method of rust protection used in Canada due to its price point and availability and is recommended for new vehicles. Rust proofing is used in areas that are more visible on the vehicle such as the door, wheel wells, fenders etc. and are available as oils, gels, or waxes that require yearly maintenance. The ceramic application is a new alternative to wax products and is said to be five times stronger than wax and lasts for five years. Undercoating protects the undercarriage of the vehicle or the hidden parts of the car and is often called sealants. There are a variety of brands and price ranges
available for rustproofing and undercoating – additional research is recommended before purchasing a package.
a. Electronic Rust Inhibitors – work well on boats and bridges but have been proven less effective on cars and are often not recommended.
b. Paint protection film products represent the latest in protection technology and are removable, self-healing, stain resistant and often maintenance free.

2. Keep it Clean: It is highly recommended to remove the vehicles dirt, salt and all other elements that increase the corrosion rate of the iron as quickly as possible. Washing all parts of the car including the underbody is necessary to prolong the life of the protection option chosen. Use baking soda and not dish-washing soap.

3. Keep It Dry: Once cleaned, the vehicles must be properly dried and kept out of moisture. Store your vehicles inside when ever possible or use a car tarp or tent to protect from heavy snowfall or rain. Keep water away from your vehicle.

You now know the basics of rust prevention. How many of these suggestions will you adopt in your everyday routine? Do you have other rust proofing ideas? We want to hear from you.

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Automotive

The “Trump Effect” – On Canada’s Automotive Industry

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BY: MALIAKA BRYCE

The 45th president of the United States has been sworn in and whether you agree with his politics or not, it’s fair to say that Trump has already made a huge impact on the world with his endless smiles and fabulous hair.  All jokes aside, many members of the Canadian Auto Industry are anxiously holding their breath to see how the Trump effect will impact us here in Canada.

Here’s what you need to know:

  1. Trump has stated he is working to revitalize the American auto industry by encouraging more manufacturing within America and adding heavy taxes and/or tariffs to all imported auto parts or vehicles coming into the country. Trump’s spokesperson Sean Spicer stated “When a company that’s in the U.S. moves to a place, whether it’s Canada, or Mexico, or any other country seeking to put U.S. workers at a disadvantage, then Trump is going to do everything he can to deter that,”
  1. Roughly 10% of American cars are made in Canada although many of the parts used in Canadian plants are imported from all over the world including Mexico. Canada is home to five major automakers that assemble vehicles and export to the tune of $60-billion worth of cars, crossovers and minivans to the United States last year.

This year the Canadian Auto Industry was making plans to expand with Honda Motors recently announced they will be driving $400,000 million dollars into the Alliston Ontario plant.

  1. Trump has also promised to make changes to the current NAFTA (North American Free Trade Agreement) between Canada, America and Mexico. Trump’s spokesman Sean Spicer said that Trump planned decisive trade moves in the coming days. He said Trump would issue an executive order on NAFTA and the Trans-Pacific Partnership, but didn’t say specifically whether he would serve notice of the U.S. intent to withdraw.

According to industry analyst Dennis DesRosiers,“It is increasingly likely these acts will lead to a renegotiation of NAFTA that will reduce or eliminate protectionist measures exempted from NAFTA. “nixing NAFTA or imposing a Mexican tariff could seriously hurt North American auto sales and the Canadian automotive sector as a whole. Even scarier is the fact the industry may be first on Trump’s policy targets list, says DesRosiers.

The Bottom Line: Trump has Canada stumped. It’s very much a wait-and-see type situation.

DesRosiers predicts “the reaction from automakers could go two ways: they could simply move production back to the U.S.; or they could “price to the tariff,” meaning they could jack up prices to cover the tax. The latter would hurt both consumers and automakers”.

What’s my two cents, I’m glad you asked – as a former auto sales representative, Van Dusen Chevrolet, Buick GMC Brand ambassador, in my opinion if you need a new car within the next year or so go ahead and buy it umm… let’s say now because chances are prices are likely to go up by 15-45% within the year. The cost of parts will likely be on the rise as well so if your emergency fund is not yet filed to the brim – go ahead and buy that extended warranty or you could always take an auto mechanics course and DIY with some chewing gum and a wire clothes hanger like my Dad used to do.    

We want to hear your take on the issue. Do you work in the Canadian auto Industry?  How has the Trump administration affected you and your work environment? What issues or concerns are you facing?   

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