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RACV, or the Royal Automobile Club of Victoria, is the Victoria affiliate of the Australian Automobile Association. It is mutually owned and was founded in 1903. Its core service is its roadside assistance program, for which it has 1.99 million members. As well as roadside assistance it runs a large amount of car related businesses including vehicle insurance, driving instruction and car loans. It also has a chain of retail outlets. Its car loans have extended to personal loans and debt consolidation services.
The loans are designed to be quickly approved. They are applied for over the phone, and the documentation is sent to a retail outlet where the borrower signs the documentation and then gets their money as a cheque, although it can be done by mail. In this way there is more personal contact than many other personal loans. As the retail outlets are in Victoria, lending is rarely done outside Victoria.
Car loans are the main loan business. RACV offers 24 hour approval and pre-approval. They advertise as offering a low rate of interest with no ongoing fees. They offer discounts on RACV motor insurance. Repayments are done through direct debit, and can be done monthly or fortnightly. Cars held as security for the loan are liable to be repossessed if the loan is not repaid. RACV also offer business car loans. These have separate terms and conditions from the personal car loans.
Borrowers who take out the car loan have three types of loan insurance on offer. As well as motor insurance they also offer “autosure protection”, which means that the balance of the loan is paid off if there is a total write off of the car. This is only available to those borrowers who have comprehensive insurance and is an option that adds to the cost. Another form of insurance is loan protection cover which will repay the loan to RACV if the borrower suffers from injury, death, illness or unemployment. The third type of loan insurance is the RACV Warranty which covers the cost of repair if the car breaks down. This can be taken for up to three years.
Personal loans and debt consolidation loans have largely similar terms and conditions to the car loans. Unlike the car loans, they are unsecured and can be used for any purpose. Due to their unsecured nature they have higher interest rates. They also offer discounts on RACV motor insurance and loan protection cover. |
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