Are you looking for a double-digit return at this time when interest rates are at historic lows? One investment you might not want to consider is an automobile, which happens to be one of the fastest-depreciating items you can possess. However, a peer-to-peer lending company (Buy2LetCars), on the other hand, is offering yearly interest rates as high as 11% over three years. Thereby, you become the car-based equivalent of a buy-to-let landlord. In this guide, we discuss everything you need to know about buy-to-let cars and investments in detail.
Buy-to-Let Cars: Overview
Buy2LetCars, together with Wheels4Sure, was founded in 2012 as a novel business concept. One that provides an attractive option for individuals to lease a brand new car with a full manufacturer’s warranty, a service package, as well as breakdown cover for one cheap set monthly price.
Thus, Buy to Let Cars fills that void in the market by allowing investors to fund brand-new cars through Crowd for Angels, which their sister firm Wheels4Sure then leases out.
However, since its inception in 2012, buy-to-let cars have provided assistance for a lot of folks to get behind the wheel of a new car.
Additionally, the rental of an automobile to an end-user and the rental payments they make produce your profits. While everyone who leases a car will thoroughly scrutinize it to ensure that they can afford the three-year payments. Regardless of whether the end-user defaults, Buy2LetCars will cover all monthly payments owed to you up to at least 85 percent of the initial loan amount.
Furthermore, the car you have sponsored is equipped with advanced Smart Telematics and Tracking Software. This forbids any use of the vehicle without proper payment.
However, to keep driving the vehicle, the driver must enter a code into the vehicle each month. And this code is only available until you make the full monthly payment. Likewise, the car will be immobilized if the code is not entered, preventing it from being used again.
More on but to Let Cars
Regardless of end-user default, Buy2LetCars promises to honor every monthly payment due to you up to 85 percent of the initial loan amount. Since 2012, 100% of Buy to Let Cars investors have gotten the expected returns on their investment.
At the same time, Buy2LetCars will negotiate the sale of a car if an end-user fails to pay the vehicle rental payments. And also, it is not viable to lease that vehicle to another user. This is because Buy2LetCars will cover any shortfall up to this amount. So the money you get after the sale of the vehicle will always be at least 85 percent of what you put into it.
Nevertheless, please keep in mind that your investment is guaranteed only up to 85% of the time. This is because this amount is contingent on Buy2LetCars being able to cover any deficit. Because this loan is for seven automobiles, there is room for the risk of a single-vehicle compromising security.
The end-user, the driver, bears all responsibility for any damage to the vehicle resulting from your buy-to-let car investment.
Buy-to-Let Cars Scam
The administrators of Buy2LetCars which include Raedex Consortium aka Wheels4Sure, Buy 2 Let Cars, aw well as Rent 2 Own Cars) have announced their preliminary findings.
According to the investigation, five out of every six cars purchased by Buy2LetCars investors did not exist. Nevertheless, Buy2LetCars’ pitch was always that each investor will buy a single automobile that will be rented out. And at the same time, be used to pay their return, as well as the car could be sold if the lessee stopped paying.
In addition, there is an identifying total of 3,609 loan terms, involving 834 investors. However, the Group owns 596 vehicles, indicating that there are more loans than vehicles. Specifically, a backer will simply provide a large sum of money. And it will be used to buy a brand-new automobile and lease it out through their sister firm, Wheels4Sure.
Furthermore, they also protect your asset by installing cutting-edge tracking and immobilization equipment in each vehicle.
In January 2021, the Buy2LetCars website is launched. However, it appears that It allocates certain cars to more than one investor, according to the administrators. While other investors got no car at all.
All the more, the Joint Administrators are conducting a review of B2L’s records to assign each investment to a category according to the signed paperwork and included within the records. This exercise also revealed that certain vehicle registration numbers were mentioned in many loan agreements.
Buy To Let Cars Investment.
Buy To Let Cars’ investment will fund the acquisition of 7 leasing automobiles for the UK market, with a return of 7% to investors. There will be reimbursement of Interest and a portion of the capital in 36 monthly installments over three years. And at the same time, a final balancing payment plus interest is due after the term.
However, Buy To Let Cars Limited provides the following options for investment in lease cars over three years
Options for Investing in Lease Cars
Level 1: invest £7,000–£10,000 and get a return of 7% per year
Level 2: invest £14,000 to fund “one unit” with a return of 9% per year
For Level 3: invest to fund “two to six new units” (presumably £28,000–£84,000) and receive a return of 10% per year
Level 4: invest to fund “7 or more units” (£98,000 or more) and receive a return of 11% per year
The money from investors will fund several leasing cars that borrowers will subsequently lease. Nevertheless, the guaranteed return will be generated using the borrower’s lease payments.
However, if the lender fails to make their repayments and Buy 2 Let Cars is unable to locate a new lender, Buy 2 Let Cars will try to sell the car to recoup the investor’s investment. Meanwhile, Buy To Let Cars offers to compensate for any deficit. This is if the amount coming in is less than the amount you invest. This is up to a maximum of 85 percent of the amount you provide for the buy-to-let car investment.
On the contrary, Buy-to-Let Cars consist of three companies. They are: Buy 2 Let Cars Ltd., Rent 2 Own Cars Ltd. (as Wheels 4 Sure), as well as Raedex Consortium Limited, the parent company. Unless otherwise stated, Buy-to-Let Cars (the group’s most common name) refers to the entire group or investment for the duration of this article.
Though the FCA regulates Raedex Consortium Limited’s car leasing services, the investment scheme is uncontrolled.
Buy-To-Let Cars London
Buy2LetCars is the company’s name, and it requires investors to put up a minimum of £13,500. This is what it claims is enough to buy a new automobile. Meanwhile, someone will subsequently rent the car, and the investor receives £250 each month for the following three years from the lease payments, totaling £9,000. However, when the lease expires, the investor receives an £8,955 lump sum payment. Likewise, these data enable Buy2LetCars to claim a three-year return of 33 percent, or 11 percent per year, on investments.
So far, the company claims to have attracted 300 investors and has purchased and leased 600 vehicles. On the other hand, because it has only been in operation for two years, it was unable to give Guardian Money a practical example of anyone who invested and, at the end of the day, got away with the money after three years.
In addition, many prospective buyers who heard the advertisements are venturing into online forums to discuss product quality. And as a result, they’re seeking answers to the questions below.
Who Are the People Who Run the Business?
Reginald Larry-Cole is the CEO of Buy2LetCars, which also has two additional directors, Scott Martin, and Stalina Elba. However, Larry Cole was a vehicle salesman who got into financing. Likewise, before starting Buy2LetCars, he ran Paygo Cars, a company that provides automobile financing to people who couldn’t get loans from standard lenders.
Furthermore, this business went through financial difficulties and was deliberately stricken from the Companies House registry in 2011. Meanwhile, before the above statement, Buy2LetCars was originally with Companies House in 2011
What Are the Company’s Assets?
Generally, in West Wickham, Kent, Buy2LetCars has a shop and an office. Likewise, Companies House accounts show scant evidence of currency trading but are up-to-date. However, according to Cole, they will file further accounting for the previous 18 months at the end of this month. However, because the corporation does not own cars, they are not listed on the balance sheet as assets.
Who Owns The Cars, and Who Rents Them?
The automobiles are almost entirely leased to people who have been turned down for credit elsewhere. Meanwhile, Buy2LetCars’ sister company, Wheels4Sure, will be handling the leasing. And it claims that all applicants will go through a stringent financial check.
After trying various garages offering guaranteed credit and receiving numerous rejections, I decided to give Wheels4Sure a try as a last resort.
However, It is a costly method of obtaining a vehicle. In the meantime, Wheels4Sure charges £249.19 per month to lease a Hyundai i30 Active. This is the car in which Buy2Let commonly invests. Likewise, because the same car that will be on lease through Hyundai costs £179 per month, Jason is paying a significant premium as a result of his poor credit record. Specifically, Buy2LetCars claims that their usual leasing income is roughly £300 per month.
Will My Lessees Default, Leaving Me Without a Source of Income?
There’s a good probability that some consumers will miss payments. Buy2LetCars, on the other hand, will continue to give investors a monthly income, according to Cole. Likewise, if a renter writes off the car, investors will continue to receive monthly payments and the final lump sum, according to the business.
Who Owns the Automobiles?
Generally, the investor will own the property and have a loan tied to it for a buy-to-let property. Nevertheless, the company is the registered keeper on the V5C form for Buy2Let cars. Meanwhile, it claims to do so so that investors don’t have to worry about parking charges or complications if they use it for illicit purposes. However, it states that it sent the V5C to the investor. Likewise, what happens if the company goes bankrupt is beyond the point. So, if Buy2LetCars went bankrupt, the investor might have the vehicle repossessed, according to Cole.
Will £8,955 Be Available to Investors After Three Years?
Typically, this question perplexes many investors. Generally, you may find a three-year-old Hyundai i30s for roughly £5,000 on autotrader.co.uk. Meanwhile, a list of newer used models is on Cargiant.co.uk for roughly £6,500 to £7,500.
However, Wheels4Sure promises there will be no obligation to make further payments after lease expiration. So, while the investor may receive £250 each month for three years, it’s unclear how they’ll wind up with £8,955 at the end.
In addition, investors will receive the ultimate lump sum from Buy2LetCars’ income from vehicle dealer kickbacks, or profit. This is at the initial stage because the £13,500 is larger than the cost of the cars. And at the same time, profit on some monthly payments, according to the company. Likewise, every investor receives £250 per month, although some leases might cost as much as £399 per month.
What Happens if the Automobile Vanishes?
The company claims that because the vehicle has GPS locators, anyone leasing it cannot just disappear with it. And at the same time, if the leaseholder fails to make a payment, Buy2LetCars can deactivate the vehicle.
What if the Company Goes Out of Business?
Specifically, this is likely the most significant danger. And in such a case, investors would almost certainly lose all of their money. Normally, the firm does not have a license and does not participate in the Financial Services Compensation Scheme. And while investors would technically own a car that was elsewhere in the country, they would rely on the administrators to track it down. This is to either restore it to the investor or arrange for the leaseholder to continue paying for it.
What Do Financial Experts Have to Say About It?
“An outlay of £13,500 will be quite significant for many people,” says Patrick Connolly, a certified financial planner at Chase de Vere. “Investors have no access to their money for three years, and there is no protection from the Financial Services Compensation Scheme if Buy2LetCars is unable to pay investors what they are due.”
“While the profits mentioned are far higher than those available through savings accounts, the risks are also significantly higher. We don’t think this is a good investment.”
Conclusion
Buy2LetCars is offering an investment project that looks too good to be true. An investment with a yearly interest rate as high as 11% over three years, thereby making you the car-based equivalent of a buy-to-let landlord? That would seem like the best deal or investment ever.
Buy-to-Let Cars FAQs
What happened to buy to let cars?
Buy2LetCars is now barred from arranging any new leases on behalf of its investors, although it can continue collecting payments from people who have hired cars via sister brand Wheels4Sure. It uses the money to buy new cars, which it then leases to people with poor credit histories via Wheels4Sure.
How does buy to let cars work?
In a buy-to-let property, the investor has title to the property, with a loan attached. With Buy2Let cars, the company is listed as the registered keeper on the V5C form. It says it does this so investors don’t have to deal with parking tickets or problems if the car is used in illegal activity
Is leasing a vehicle a good idea?
Leasing a car has potential benefits that may appeal to some drivers: Lower monthly payments: Monthly payments for a car lease are usually lower than monthly car loan payments, so leasing could mean spending less money each month to drive the same car.
