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Buy 2 let cars scam?
martinbiz
post Thu, 3 Apr 2014 - 21:34
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Does anyone understand their business model, they seem to be spending an awful lot of money on advertising, but I can't see how it works.

You buy a car for 13k they rent it for you and pay you £250 per month for 3 years, backed up by your 'asset' and at the end of the term they give you 8k for a car that's worth probably 4 at best, maybe I've missed something dontknow.gif
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post Thu, 3 Apr 2014 - 21:34
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enfield freddy
post Thu, 3 Apr 2014 - 21:44
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who pays for maintenance , new engines , insurance etc

it seems that you do the spending (13k) and they can easily rent it for £300 + a month to an insurance claims Co,

http://www.propertytribes.com/buy-2-let-ca...unt-t-6177.html
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Gan
post Fri, 4 Apr 2014 - 09:12
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A brand name car rental company with vehicles less than 12 months old and company/insurance contracts would expect a monthly turnover in the region of £500-700 per month for a vehicle.

Unless the buyer paid cash for the car and has no loans, credit cards etc that he could have paid instead, the car is costing him £300-400/month in some way
He's getting £250 back that's probably taxable

In effect he's investing about £100 / month for an £8000 return in three years, also taxable
The renters pay for insurance and servicing. The cars have a GPS tracker.

The website claims that they deal with administration like parking tickets.
I'm puzzled how this works if the owner is still named on the V5 unless the address is B2L
We've seen a few threads recently where OPs have received notices for vehicles under loan
I'd like to know how the continuous insurance issue is dealt with

I'll suspend judgment on the principle for now because I'm a big fan of crowd-lending and not at all happy with the result of the Financial Conduct Authority's mock consultation process. My concern is the company profile

The directors have three companies formed 2011-2012 :

Buy 2 Let Cars Ltd
Rent 2 Loan Cars Ltd
Raedex Consortium Ltd

Raedex, the owner of B2L was formed later. Both companies are non-trading
R2L is on the first warning to be dissolved

If B2L succeeds and is still around in three years, the early investors could do quite well
I can see the market becoming very competitive though

This post has been edited by Gan: Fri, 4 Apr 2014 - 09:14
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glasgow_bhoy
post Fri, 4 Apr 2014 - 20:51
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Very strange concept. I can't help thinking thats got similar underworkings to a PCP lease deal though. And they're not going to be sustainable in the long run. Manufacturers have pushed heavily on them for the past 5/6 years, but they really are a short term solution to boosting low mileage used car stocks. With this model from buy to lease, I don't see how they can give values of £8k after 3 years on a £13k car, given PCP prices already offer competitive deals to customers at very good prices. It just doesn't add up to me.
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psimmons200
post Fri, 4 Apr 2014 - 23:42
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QUOTE (martinbiz @ Thu, 3 Apr 2014 - 22:34) *
You buy a car for 13k they rent it for you and pay you £250 per month for 3 years, backed up by your 'asset' and at the end of the term they give you 8k for a car that's worth probably 4 at best go bankrupt because their business model makes no sense, and leave the 'investor' high and dry

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Gan
post Sat, 5 Apr 2014 - 17:06
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That's my prediction

It's the odd ownership and trading status as well as the inflated end-of-life valuation that for me ring alarm bells of a potential Ponzi scheme
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Gan
post Mon, 7 Apr 2014 - 20:57
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Spoke to a couple of finance specialists this evening, one of whom was previously involved with a car dealership
Apart from the financial angle his view was that, regardless of the website promises, only sub-prime individuals will be renting cars at those prices

This leads to obvious conclusions about insurance, servicing and the prospect of the car lasting three years

They shared my suspicions about the companies' ownership and trading status

Psimmons comment a couple of posts ago looks pretty close to the most likely business model
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Chris Hughes
post Thu, 31 Jul 2014 - 15:25
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Hi,
I’m actually an investor with Buy2Letcars.com and thought I would share the benefit of my experience.
1. Firstly, it is not a scam – I’ve been there (and it’s not a flash hired office – it’s a proper business centre in West Wickham, Kent), they have over 200 investors and more than 500 cars on the road. Go there and see for yourself – I was sceptical at first, but I rang up and met them and was reassured.
2. Insurance & damage/ loss of vehicles: all vehicles are password restricted and have the ability to be remotely disabled preventing theft or default on the payments. All this is provided by Buy2LetCars.com, who, along with the DVLA and the police, can track the whereabouts of the cars 24 hours a day. Vehicle insurance is provided by the end user. Believe me, these investments are well protected.
3. Returns: to have questions is only natural, I would suggest ringing Buy2LetCars.com to clarify. You put in £13,500 to fund one car. You get a £250/month for 3 years (£9000 in total), then a lump sum of £8,955 for the car, a total of £17,955 or 33% over three years. There is also an option to part fund a car on £7,000.
4. Depreciation: yes, cars do fall in value, however the key to this scheme is that even though the car falls in value, the repayments don’t decrease guaranteeing your return. Banks have been - and are still - making a killing from car finance for years – if it wasn’t profitable they wouldn’t do it.

I started off with one car in 2012 and have been so impressed, I have invested in more vehicles as I've gone along. My wife Alma and I live comfortably off our monthly ‘car wages’ and at the end of the three years have a lump sum to re-invest. I’ve been an investor for over 10 years and I can honestly say this is my best investment. I would really encourage anyone with any questions to contact Reg and Scott direct – they are really friendly and will happily answer any questions on 0800 014 9228 or visit the website.

cheers, Chris
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andy_foster
post Thu, 31 Jul 2014 - 17:01
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Holy thread resurrection Batman!

The biggest single risk in this scam clearly dubious business model is not getting the final payment at the end of the 3 years. As the 'scheme' has only been running for 2 years, I am somewhat unsure as to how our illustrious thread resurrector can state with any certainty that it's not a scam.

I note that Chris' post is virtually a cut and paste of an article about him in dluxe magazine last November.

Chris' praise is almost as gushing as the victims of a particular PPC who posted here telling us how they regretted not paying those ever so nice people at that PPC, and all posted from the same IP address.

Of course, Chris could be entirely genuine, and I could be having wing of pork and chips for my tea.

This post has been edited by andy_foster: Thu, 31 Jul 2014 - 17:01


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Barry S
post Thu, 31 Jul 2014 - 17:05
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Mr Hughes is also one of the "voices" of B2L in their radio ads...
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Rallyman72
post Thu, 31 Jul 2014 - 17:09
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Isn't this a bit strange:
QUOTE (Chris Hughes @ Thu, 31 Jul 2014 - 16:25) *
I started off with one car in 2012
QUOTE (Chris Hughes @ Thu, 31 Jul 2014 - 16:25) *
I've been an investor for over 10 years


Whole thing seems a bit dubious to me. And, if it is being sold as an investment scheme, what is their FCA registration number?

According to the testimonial from Chris Hughes on the website he started with 3 cars in 2012 and now has 12.

Reg and Scott only became directors in November of last year.

And the company has filed account for the years ended 30/6/12 and 30/6/13 showing their net worth of £0. Yup. nil, zilch, denada ...

Where's the salt ....

This post has been edited by Rallyman72: Thu, 31 Jul 2014 - 17:23


--------------------
The accident was caused by cockpit thrombosis - a dangerous clot between seatback and steering wheel ...

1. Read this first
2. Nip Wizard
Parking tickets - council - 0, Rallyman - 1
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Gan
post Thu, 31 Jul 2014 - 17:22
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So who's paying him if Buy 2 Let Cars Ltd and its parent company Raedex Holdings Ltd are both non-trading ?

Nothing I've read today that changes my opinion of the company

The article says that he's recommending the investment to all his friends and family
Hope they're more understanding than mine would be
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andy_foster
post Thu, 31 Jul 2014 - 17:28
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QUOTE
Q. Who owns the car – the asset?
A. The car is 100% owned by you and all legal documentation will be in your name. You keep the title deed and the original V5C registration document.


QUOTE
Q. Who is responsible for servicing the car, taxing the car, and insurance?
A. Every car is fully comprehensively insured by the end user who is also responsible for servicing. Each car comes with first year RFL; second and third years are paid for by end user. Buy2letcars monitors this as part of our obligation to you.


QUOTE
Q. Will I receive any parking fines etc through the post as I own the car?
A. All administration of your asset is handled by buy2letcars.com. You will never have to deal with any aspect of administration including and not limited to fines, road fund licence etc.


QUOTE
Q. Who is responsible for taxing my investment vehicle in years 2 and 3?
A. The end user is responsible for the second and third year road fund licence; buy2letcars monitor’s this as part of the lease agreement.


What is a title deed for a car when it's at home? Whose name and address is the original V5C in if parking fines and tax reminders are dealt with by B2L?

Chris thinks so highly of B2L that he also registered on Pistonheads to tell them that it's not a scam shortly after posting here.


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Rallyman72
post Thu, 31 Jul 2014 - 17:30
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Consumer Credit Licence and ICO number come back to Raedex Consortium. VAT number is Buy2Let.

The more I look at this the more it strikes me as being a pyramid scheme.


--------------------
The accident was caused by cockpit thrombosis - a dangerous clot between seatback and steering wheel ...

1. Read this first
2. Nip Wizard
Parking tickets - council - 0, Rallyman - 1
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Kieran_e1
post Thu, 31 Jul 2014 - 17:34
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QUOTE (Rallyman72 @ Thu, 31 Jul 2014 - 18:09) *
Isn't this a bit strange:
QUOTE (Chris Hughes @ Thu, 31 Jul 2014 - 16:25) *
I started off with one car in 2012
QUOTE (Chris Hughes @ Thu, 31 Jul 2014 - 16:25) *
I've been an investor for over 10 years


Whole thing seems a bit dubious to me. And, if it is being sold as an investment scheme, what is their FCA registration number?



it will be a UCIS or Unregulated Collective investment Scheme and will therefore have no fca number
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Rallyman72
post Thu, 31 Jul 2014 - 17:41
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But, Unregulated schemes cannot sell directly to the general public in the UK. They can only be promoted via a suitably qualified IFA under FSMA 2000 s.238. The terminology has also changed to make them Non Mainstream Pooled Investment Schemes from last year. If it is based in the UK, which it appears to be, it is operating illegally.

And, you are now in my professional sphere where I have been on the FCA register in the past (but my present role does not require such registration). As for professional qualifications I hold the Securities Institute Diploma as well making me a fully qualified stockbroker. And fund management is my bread and butter.

This post has been edited by Rallyman72: Thu, 31 Jul 2014 - 17:42


--------------------
The accident was caused by cockpit thrombosis - a dangerous clot between seatback and steering wheel ...

1. Read this first
2. Nip Wizard
Parking tickets - council - 0, Rallyman - 1
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Kieran_e1
post Thu, 31 Jul 2014 - 17:58
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QUOTE (Rallyman72 @ Thu, 31 Jul 2014 - 18:41) *
But, Unregulated schemes cannot sell directly to the general public in the UK. They can only be promoted via a suitably qualified IFA under FSMA 2000 s.238. The terminology has also changed to make them Non Mainstream Pooled Investment Schemes from last year. If it is based in the UK, which it appears to be, it is operating illegally.

And, you are now in my professional sphere where I have been on the FCA register in the past (but my present role does not require such registration). As for professional qualifications I hold the Securities Institute Diploma as well making me a fully qualified stockbroker. And fund management is my bread and butter.

As an ex-IFA and current DFM adviser smile.gif you and I both know that FSMA counts for he haw with regard to these types of UCIS schemes. Every other week there are various schemes cooked up and firms which are set up to specifically promote this type of investment which then bust out leaving investors ******.

Regardless we know it's a scam smile.gif and we know it's probably operating illegally smile.gif

Should add I have never advised a client to invest in a UCIS or NMPIS if you wish smile.gif

This post has been edited by Kieran_e1: Thu, 31 Jul 2014 - 17:59
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Rallyman72
post Thu, 31 Jul 2014 - 18:20
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OK, we'll agree that FSMA, for many, means nothing (for my employer it is crucial).

And I think we are both of a mind on the rest. icon_thumleft.gif


--------------------
The accident was caused by cockpit thrombosis - a dangerous clot between seatback and steering wheel ...

1. Read this first
2. Nip Wizard
Parking tickets - council - 0, Rallyman - 1
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southpaw82
post Thu, 31 Jul 2014 - 18:23
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QUOTE (Rallyman72 @ Thu, 31 Jul 2014 - 19:20) *
OK, we'll agree that FSMA, for many, means nothing (for my employer it is crucial).


Only MCOB and CONC.


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Moderator

Any comments made do not constitute legal advice and should not be relied upon. No lawyer/client relationship should be assumed nor should any duty of care be owed.
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Peterandmike
post Sun, 17 Aug 2014 - 15:18
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A Ponzi scheme (eg Bernie Madoff) is a scam where returns to older investors are funded by new investors. The scheme fails if/when new investments are insufficient to meet the cash flow. Then everyone loses and the perpetrators go to jail if they haven't fled the country.

Buy2let might be a very clever deal set up by people who have spotted an opening in the market. Or it might be a Ponzi scheme. Or it might be a legitimate business attempt which fails to meet the hopes of the promoters and turns into a Ponzi scheme. I know what I think and won't be investing.
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