| AutoAdvance Finance |
| |
Auto Advance Finance is a product of Nichibo Japan Trading, created to help our clients have a consistent stock flow.
Auto Advance is a wholesale finance facility that removes the need for a third-party financier, and simplifies the administration of your stock and payments thereof. Since the administration of the facility is straightforward for us (as there is no third-party financier to consider), we can pass on those savings to the Dealership in the form of interest rates significantly lower than our competitors. This provides a win-win scenario for all parties.
As a general rule, we require customers to reliably trade on standard FOB terms (payment prior to delivery) for a period of at least six months before the extension of Auto Advance credit can be considered. Credit analysis of annual financial accounts and supporting information and credit checks may also need to be performed in order to establish a company's credit-worthiness, and the decision to extend credit, and to what level, is dependent on the strength of these results. Additionally, if appropriate collateral security can be offered in support of the application, the level of credit extended and interest rate offered can be particularly generous.
A brief summary
To offer added service to Nichibo clients, Auto Advance is now able to extend credit to Dealers from the date of shipment through to when the vehicle is sold, up to a maximum of six months from shipment date. To avoid exposure to FX risk vehicles are automatically invoiced in New Zealand dollars, purchases are converted from yen FOB value using the advertised exchange rate on the day, which is displayed on Auto Search when you logon
If a vehicle is not sold within six months of shipment date, the balance must be repaid to Nichibo regardless. Interest is charged at the end of each month on the daily balance outstanding.
How does it work?
The facility is made up of a series of individual loans. Each loan relates to a specific vehicle that has been purchased. Nichibo automatically adds all vehicles to the Dealers Auto Advance account when a vehicle has been allocated to a vessel for shipment. If the vehicle's FOB value is paid for before or on the date the vehicles are shipped, no interest is charged as credit is not deemed to have been extended. Conversely, if the vehicle's FOB value has not been paid on or before the shipment date, credit is deemed to have been extended and interest will be charged.
Credit extended does not include associated charges such as freight and GST.
What do I do when I sell a vehicle on the facility?
Once title passes (upon sale of the vehicle), the amount outstanding with respect to that vehicle must be settled within 3 working days of the change of title.
Vehicle Payments
Each Monday you will receive e-mail advice showing all vehicles on your facility. When making payment, simply print the remittance advice and tick the box next to the vehicle(s) paid and fax the Remittance Advice to Auto Advance, or alternatively email us the details of the vehicle/s you have made payment for. This will assist in processing your payment correctly against the vehicle/s being paid.
Can I make part payments or pay early?
You may make a partial payment of the outstanding charges on a vehicle at any time.
Where this occurs, interest will be charged on the reduced balance from the date of receipted funds.
You may at any time pay all the charges outstanding on a vehicle, at which time interest will cease to be charged (notwithstanding the requirement to settle when title passes).
Calculation and Charging of Interest
Interest is computed in NZD on the daily balance outstanding for each vehicle.
The rate of interest charged may be subject to change, in which case Auto Advance will notify the Dealer in writing not less than one month prior to the scheduled date of change.
Auto Advance will issue an invoice for interest due under the facility at the end of each month.
All interest payments are to be paid by direct debit, in New Zealand dollars, from the Dealer's account on the 20th of the month following the interest period.
How much can I borrow?
Credit limits are established according to each Dealer's individual circumstances. The strength of the Dealer's financial accounts, as well as the strength of personal guarantees and any collateral security offered, are taken into account in determining the credit limit. The greater the security level, the greater the credit limit that can be approved.
Settlement
Settlement is deemed to have been made on the date that funds are received into Nichibo's bank account in Japan.
Security
Nichibo, as part of its governance program, automatically registers with the PPSR a PMSI (Purchase Money Security Interest) over the vehicle where credit is deemed to have been extended. This interest is removed when all monies outstanding on the vehicle have been paid.
Nichibo have opted for a PMSI charge as this accommodates those Dealers who have a Revolving Credit Floor Plan Facility with other Financiers. Where this situation exists, Nichibo's PMSI will take priority over other charges.
Upon receipt of a signed copy of the Auto Advance Finance credit contract, Nichibo and Auto Advance will jointly register a general security over vehicles supplied by Nichibo against both the Debtor Organisation and one or more Personal Guarantor(s).
Additionally Nichibo will in most cases retain possession of vehicle MR2a documentation upon compliance, either at Nichibo’s head office, or by agreement at your compliance centre. MR2a’s are then released on request and the 3 day timeframe for payment begins.
Penalty Interest
Credit is only extended to a Dealer where the Dealer has legal title to the vehicle. Nichibo will charge penalty interest at a rate above the standard monthly rate on the balance outstanding from the date that settlement was deemed due (date title passed) until the amount is settled.
Stock Inspections
As normal industry practice, stockchecks are conducted at the Dealership, generally every 3- 4 weeks, to ensure all financed vehicles are accounted for. A monthly stock audit fee of $150.00 incl GST is payable on account, along with any interest outstanding this amount will be debited from your account on the 20th of the month following. Any vehicles not accounted for must be paid for within 3 working days.
|
|
