Reckless Car Loans Salesmen Exposed

More news on the issue of potentially dangerous levels of sub-prime car loans in today’s Daily Mail. Their investigation found unscrupulous car salesmen are offering cars worth up to £20,000 with no deposit but monthly payments of hundreds of pounds that they will be paying back for many years to come. And these loans are being offered even to people with poor credit ratings, the unemployed, and people on low wages.

The Mail reports

“… the deals commit them to paying hundreds of pounds per month for years. If they fail to keep up payments, they face having the cars repossessed and court orders forcing them to pay the outstanding loan… Experts fear that if huge numbers default on loans, it will cause a domino effect that could cripple the City… Last night, MPs and campaigners called for an urgent crackdown on the ‘reckless’ lending, while Vauxhall and Suzuki launched probes into the conduct of their dealerships… City watchdog the Financial Conduct Authority is already investigating ‘irresponsible lending’ in the motor industry. There has been a surge in motorists taking out loans for new cars and defaulting on payments. In a chilling echo of the sub-prime mortgage crisis of 2007, car finance firms packaged and sold £5.5billion of risky loan debt to investors last year – twice as much as the year before. Last week, the Bank of England warned that drivers owe £58billion on car finance – an increase of 15 per cent in a year.”