What is the finance in captivity?
captured finance is a subsidiary established for the purpose of providing a loan to customers to the parent company. This is designed to make financing for consumers who make large purchases such as appliances and vehicles. The captured financial companies are owned or dominated by the parent company depending on how they are structured and exist only in favor of the parent company. Commercial houses often offer stores to their customers and people can also get shops for grocery stores and other types of shops. Customers can often apply on the spot for a large purchase and may be offered motivation, such as a discount from a selling price or a savings card that will apply to future purchases.
Another example is financing offered through a car manufacturer. Many car manufacturers have capture financial companies that provide loan to people who buy their cars. Likewise, such companies can also use productionCI of appliances and expensive devices. The captured finance exists to make the company's products more accessible to consumers and ensure that the company has a stable buyer offer. Without a loan of this nature, some purchases for consumers may be out of reach. Captivity financial companies can also offer a loan to customers who may not be able to get loans differently, thereby opening the market for potential customers.
Having captured financial companies allows the company to expand the loan to customers without being directly at risk. Smaller businesses can offer things as charges for fees for a fee directly to customers without an intermediary. The problem with this is that when the debtors fail, the company takes the loss directly. With the captured finals of the company, such losses will be established by a subsidiary. Acts as a financial company and can also invest and take further steps to make a penZeje for the parent company and alleviate the risks from consumers.
People who receive financing through a captured financial company should be careful. The interest rate can be higher than another type of loan such as a bank loan. In addition, such loans may come up with misleading or unfavorable conditions. For example, people may be informed that they do not have to make any payments per year, but they will not be warned of the fact that interest is increasing during this period.