Tips to Prevent Car Theft
Take Your Keys. Nearly 20 percent of all vehicles stolen have the keys in them.
Lock Your Car. Approximately 50 percent of all vehicles stolen were left unlocked.
Never Hide a Second Set of Keys in Your Car. Extra keys can be easily found if a thief takes time to look.
Park in Well-lighted Areas. Over half of all vehicle thefts occur at night.
Park in Attended Lots. Auto thieves do not like witnesses and prefer unattended parking lots.
If You Park in an Attended Lot, Leave Only the Ignition/Door Key. If your trunk and glovebox use the same key as the door, have one of them changed. Don't give the attendant easy access to your glovebox and trunk. Upon returning, check the tires, spare tire, and battery to be sure they are the same as those you had when you parked.
Never Leave Your Car Running, Even if You'll Only be Gone For a Minute. Vehicles are commonly stolen at convenience stores, gas stations, ATMs, etc. Many vehicles are also stolen on cold mornings when the owner leaves the vehicle running to warm up.
Completely Close Car Windows When Parking. Don't make it any easier for the thief to enter your vehicle.
Don't Leave Valuables in Plain View. Don't make your car a more desirable target and attract thieves by leaving valuables in plain sight.
Park With Your Wheels Turned Toward the Curb. Make your car tough to tow away. Wheels should also be turned to the side in driveways and parking lots.
If Your Vehicle is Rear-Wheel Drive, Back into Your Driveway. Rear wheels lock on four-wheel drive vehicles, making them difficult to tow. Front-wheel drive vehicles should be parked front end first.
Always Use Your Emergency Brake When Parking. In addition to ensuring safety, using the emergency brake makes your car harder to tow.
If You Have a Garage, Use It. If you have a garage, take the time to use it rather than parking outside where your vehicle is more vulnerable.
When parking in a Garage, Lock the Garage Door and Your Vehicle. By locking both the garage and vehicle doors, the chances of deterring a thief greatly improve.
Don't leave the registration or Title in Your Car. A car thief will use these to sell your stolen car. File the title at your home or office, and carry registration in your purse or wallet.
Disable Your Vehicle When Leaving it Unattended for an Extended Period. Remove the electronic ignition fuse, coil wire, rotor distributor, or otherwise disable your vehicle anytime thieves may have extended access to it.
Replace T-Shaped Door Locks With Straight Locks. Some vehicle doors have lock assemblies at window level that flare out in a knob or "T" shape. A thief can use various tools to gain access inside the vehicle, grab and pull the lock. Straight locks prevent this.
Vehicle Identification Number (VIN). Stolen cars/parts are more easily traced when vehicle VIN numbers have been etched on car windows and major parts.
Engrave Expensive Accessories. Engrave personal ID numbers on car stereos, cellular phones, etc., so the thief will have difficulty disposing of them.
Investing in Vehicle Protection
Ignition Kill Switch. Splice an inexpensive toggle switch into your ignition wire. The trick is hiding the switch well. Keypads, pressure pads and more expensive "immobilizers" and "passkeys" can also be used.
Fuel Kill Switch. The valve that halts the fuel supply is closed. Visible Steering Wheel Lock. Prevents the steering wheel from being turned.
Floorboard Locks. Devices that disable the gas or break pedal.
Gearshift Locks. Disables shifting of the transmission.
Tire/Wheel Locks. Prevents the vehicle from moving.
Hood Locks. Prevents the thief from gaining access to your security system and
battery.
Armored Collar Around Steering Column. Protects the column and ignition.
Electronic Security Systems. Audio alarms sound loud warnings when doors/hood/trunk are opened. Optional sensors include glass breakage, motion, tampering and towing. Panic buttons and automatic engine disable features are also recommended.
Vehicle Tracking This is done with a transmitter hidden in the car that allows police to track the vehicle.
Finance Terminology
Finance Terminology
Acceleration Clause
A stipulation in hire-purchase agreements that upon default in payment of any one installment, the full outstanding balance of the price shall immediately become due. The acceleration clause confers upon the owner the right, while keeping the agreement alive, to recover from the defaulting hirer the full unpaid balance of the hire-purchase price.
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Amortisation
This term is used in two senses:
The repayment of Principal and Interest components of a Loan, over a period of time.
Write-off of an expenditure (like issue cost of shares, pre-incorporation expenses) over a period of time.
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Back-loaded lease
A lease where the rentals are higher towards the end of the lease tenure. This is also called 'rear-end loaded lease'.
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Balloon lease
In this type of lease agreement the rentals are low at the inception, higher during the middle period and again low during the end.
The residual value in such lease contracts are usually very low.
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EMI
(EMI) Equated Monthly Installments are installment towards repayment of a loan, lease or hire purchase agreement.
As banks and finance companies conduct very high volumes of retail business it becomes easier for them to monitor and manage installments that are constant in amount.
The EMI's are collected in advance as post dated cheques.
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Escalation Clause
A clause in lease agreements which provides that the rentals shall increase on certain eventuality, e.g., on increase in interest rate or on non-availibility of certain tax benifits.
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Flat Rate of Interest
A method of calculating the interest rate based on the total outflow of money. The method does not take into consideration the time value of money and is thus a crude measure.
Flat rate of interest is the % paid in excess of the finance amount, and is calculated on per year basis.
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Working:
(1)Finance Amount = A
(2)Total Outflow = B
(3)Finance Tenure = C
Flat Rate (per annum) = ((B-A) / (A)*(C)) x 100
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Front-loaded lease
A lease agreement where the rental payments are higher in the initial period, going down towards the end of the tenure. Opposite of back-loaded lease (or rear-ended lease).
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Hire Purchase Price
The total sum payable by the hirer under a hire-purchase agreement in order to complete the purchase of the goods to which the agreement relates. A total of cash-price & financing charge.
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Hirer
The person who takes the goos on hire. If you purchase a car under hire-purchase agreement with a finance company, then you become the hirer.
The person who takes the goos on hire. If you purchase a car under hire-purchase agreement with a finance company, then you become the hirer.
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Hypothecation
A hypothecation is an equitable charge on the goods without possession, but not amounting to a mortgage. The contract is done to secure a debt. Banks that give you a loan to purchase a car, hypothecate the car in their name as security.
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Inception of a lease
The date of signing of the lease agreement where the property to be leased has been constructed or has been been acquired by the lessor. Where, on such date, the property to be leased has not been constructed or acquired by the lessor, the date on which such construction is completed or the property is acquired by the lessor, shall be the date of inception.
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IRR(Internal Rate of Return)
The internal rate of return of a project is the discount rate which makes makes its net present value equal to zero.
The IRR method is a popular discounted cash flow method, that takes into account the time value of money and also considers the cash flow stream in its entirety.
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Late Payment Charges
When the monthly installment towards repayment of a loan is delayed the financier collects the installment alongwith the late payment charges. The late payment charge is also known as the delayed payment charges or the overdue payment charges.
The late payment charges are fixed at the time of signing the finance contract.
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Lease Rental
In a purchase transaction, the commodity (as a tangible form) is purchased for money while in a hiring transaction the services of the commodity (intangible) are purchased. Economic parlance therefore refers to the payment on hire interchangably as 'rent', 'rental' or 'lease payment'.
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Lease Rate
The equivalent simple annual interest rate implicit in the minimum lease rentals. This is not the same as the interest rate implicit in a lease, which reflects the compounding effect.
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Lease Term
The tenure or the period of the lease agreement is known as lease term.
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Lessee
The user of the leased asset is called the lessee. The lessor (finance company) is teh owner of the asset.
Under the Motor Vehicles Act of 1930, the lessor was considered as the owner of the vehicle and was subject to the liabilities of owner under the act. Thus the lessor was liable for any criminal action or other offence, even though the lease agreement shifted this burden to the lessee.
This position has been reversed under the Motor Vehicles Act, 1988. Although the legal ownership vests in the lessor, the lessee is regarded as the owner for all purposes under the Act.
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Lessor
Under the lease agreement, the finance company who is the legal owner of the asset is known as the lessor.
The Motor Vehicles Act, 1988 - Section 51 contains special provisions regarding motor vehicle subject to hire-purchase agreement, etc. In case of vehicles financed under hire-purchase, lease or loan agreement, the name of the lessor is mentioned as a financier.
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Lien
A lender's claim on assets offered as security for a loan. It is a right which a person, to whom a sum of money is owed by another, is given in law over the goods of that other', to secure payment of the sum owed.
Lien may be possessory, i.e., exercisable only as long as the goods are in the possession of the claimant, and equitable, i.e., enforcable irrespective of the possession by the creditor.
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Margin Amount
Most financiers finance upto 90% of the cars value. The balance has to be paid as downpayment which is also called the Margin Aomunt.
The resale values of cars differ and financier's fix up the extent of finance and the margin amount based on their perception of security of the asset.
Thus for smaller cars like the Maruti 800, Maruti Zen etc. the financiers demand only 10% as margin amount. For premium cars that have lower resale values, the financier hedge against future risk by collecting a bigger margin amount of 20 - 30% of the cars cost.
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Margin Amount
Minimum Payment Clause
A clause in hire-purchase agreement imposing a liability on the hirer to make a payment over and above the arrears of hire-rent, in the event of the agreement or the hiring being terminated before the property in the goods has been passed to the hirer. The payment may be expressed to be for depreciation of goods or by way of liquidated damages or compensation for loss of profit.
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NPV(Net Present Value)
The value of cash flows discounted using the time and risk value of money. It is the real value of a receipt or payment in future, deflated because of interest. It is a method of evaluating investment proposals.
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Operating lease
A short term cancellable lease agreement which is not fully amortised. It is a lease, other than a finance lease wherein the lessor seeks to recover his investment in a lease by leasing the equipment to more than one lessee. For financial accounting purposes, an operating lease is a lease which does not meet the criteria for a capital lease or direct financing lease. Also, used generally to describe a short-term lease whereby a user can acquire use of an asset for a fraction of the useful life of the asset. The lessor may provide services in connection with the lease such as maintenance, insurance and payment of taxes.
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PDC(post dated cheque)
Most financiers collect post dated cheques towards the repayment of the lease rentals or the installments (EMI's) for a lease / hire-purchase / loan contract.
The post dated cheques not only provide convinience, but also protect the financiers by making the issuer of the cheques liable to honour them as per the Negotiable Instruments Act .
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Promissory Note
As a matter of precaution, the lessee/hirer/borrower is required to execute an unconditional promissory note in favour of the financier, for full amount of the installments / rentals payable under theagreement. The promissory note is counter guaranteed by the guarantor where applicable .
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Residual Value
The market value of equipment prevailing at the end of the lease term.
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Security Deposit
Security Deposit is typical to hire-purchase agreements offered by Non Banking Finance Companies.
The party seeking finance (hirer), is offered finance upto 100% of the cars cost. The security deposit can vary from 15% to 35% as per the scheme selected. The security deposit earns an interest of 14% simple or 14% compounded quarterly, for the period of the agreement (tenure).
At the end of the tenure the security deposit is refunded along with the interest earned through the tenure.
Unlike Fixed Deposits which can be terminated and refund sought before maturity, the security deposit is linked to the car hire-purchase agreement and is refunded only on termination of the hire-purchase agreement and not in between.
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Termination Schedule
Leases sometimes contain provisions permitting a lessee to terminate the lease during the lease term in the event the leased equipment becomes redundant or obsolete to needs. The liability of the lessee in the event of such termination is set forth in a termination schedule which values the equipment at various points during the lease term. If the equipment is sold at a price lower than set forth in the schedule, the lessee pays the difference.
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