In these days of low inflation, its people on fixed incomes and with savings in cash who are the ones to feel the pinch, sadly those in retirement often fall into both categories. With interest on savings as low as 2-3% and the cost of living is increasing all the time, cash left in the bank is depreciating leaving savers and investors in a worrying position.
However, Chris Hughes from Rugby, Warwickshire, has found a new way of making his money work for him and his wife in their retirement. Chris, a retired business owner, had previously invested in fixed rate bonds and was used to a healthy 7.5% growth rate. As his bonds matured, the new low available rates of 2-3% shocked him.
Chris, 67, said; “I looked around to see what return I could get from mainstream finance, and it wasn’t good. Then I saw an advertisement in the Sunday Times for a new scheme that invested in cars. The return was strong, and best of all, it was real people investing their money to help essential key workers access reliable transportation.”
Buy2LetCars is a scheme in which private investors take the place of big banks and loan companies by investing in vehicles that are then made available to people with healthy incomes who, for one reason or another, can’t access mainstream credit. Chris invested £13,500 in one vehicle initially – this provided him with a monthly sum of £250 for the next three years plus a lump sum at the end of £8,955. In total Chris will turn his £13,500 into £17,955 over three years - a return of 33%.
“At first, I thought the model sounded complicated but the banks have been making a fortune providing finance for cars for years. In this scheme, the bank is replaced by a private investor, who actually owns the car so their investment is protected. Income is provided by the monthly lease and the sale of the car at the end of the three years.”
The scheme, known as peer-to-peer funding, has been increasing in popularity over the few years, since the collapse of major banks in 2008. Buy2LetCars Investment Manager Scott Martin explains “We are finding that people are keen to cut the banks out of the loop. With Buy2LetCars, it is people who are funding other people. It meets two needs – the first is for investors to make money from their hard-earned cash and the second is to provide reliable cars for essential key workers who can’t access mainstream credit.”
As Chris says “The banks aren’t lending any more – we are the banks now.”
Chris was so impressed with the scheme he invested in a further eleven vehicles giving an income of £3000/month and has now recommended Buy2LetCars to his friends and family. “My advice to anyone with £13,500 in the bank is ‘just do it’. My wife Alma and I live comfortably off our monthly ‘car wages’ plus have a lump sum at the end of the three years to re-invest.”
For more information on Buy2letcars.com visit www.buy2letcars.com or visit them on Twitter.