Car Finance in the News

Bravepants

Blimey!



Let's get someone else to work out whether we can afford stuff!



Some people!



https://www.bbc.co.uk/news/business-your-money-48776454

Takedap

Bravepants wrote: »

Blimey!


Let's get someone else to work out whether we can afford stuff!

Some people!

https://www.bbc.co.uk/news/business-your-money-48776454

Personal responsibility is a thing of the past.

Bravepants

I particularly find this line maddening:


"I think it's criminal, the impact it's had on the family, my daughter, it's outrageous."


It's your daughter's fault, and YOU are her parents so perhaps you should have advised her before hand?



I mean a first year student with a part-time job and she comes home with a £20k Audi! !!!!!!!

Gadfium

Pathetic, isn't it?


"I think she was just silly"...no you daft bint, she was a grown adult that cant work out how much something costs and whether she could afford it or not.

Bravepants

The more I think about it, the more it seems like one of those joke headline stories you see in "Viz!" comic. Hehe!

eskbanker

While I entirely agree with the personal responsibility angle and despair at the tone of the piece, that's not to say that there hasn't been irresponsible lending too.

However, in this case, it's made clear in the article that the loan was made in early 2017 but also, crucially, that:

The Financial Conduct Authority, the watchdog responsible for regulating the car finance industry, introduced new guidelines in November 2018 after expressing concern some lenders weren't "complying with FCA rules on assessing creditworthiness, including affordability".

so it's really a complete non-story if the loophole exploited by a finance company (failing to check affordability) has since been closed!

What next, "my daughter had PPI on a card, something really ought to be done about it"?

wiseonesomeofthetime

Have to agree with all of the above.

bd10

Where were the proper affordability checks? BOTH sides? How much car sales have been done solely on credit? What percentage were outright/cash sales for the past 5+ years? If these loans will mature and borrowers will be forced to either sell at a loss or roll over to a new car and loan, ... the whole car finance industry will have a serious problem on their hands: excess supply of forced sellers, so the value of these cars will have to come down and once this happens, car loan books would also have to get marked down, not to mention a rise in default rates. The only difference to the mortgage crisis from 10 years back is that car loans are relatively small compared to mortgages.

Personally, I don't like the tone of the BBC article. Car salesmen rubber stamping finance deals does not absolve the borrower from calculating whether he/she can afford these payments. No need to play the victim card here, they apparently made a stupid mistake which will cost them dearly. Tough break.

eskbanker

I'm not even sure that there was a particularly stupid mistake involved in the first place to be honest, other than falling for some upselling.

While it appears that there wasn't any affordability checking done, the clear implication is that it was affordable at the time anyway, but only recently became less so when the owner lost her job a couple of years later, which could happen to anyone at any time:

With Victoria having recently lost her job, Mandy and her husband have been stepping in to help meet the payments. But they say they simply can't afford to anymore.

Perhaps the BBC feels that lenders should only lend to people who are guaranteed not to lose their jobs throughout the term of a loan - good luck with finding a way to check that!

shinytop

The finance company could always add in an additional payment - a sort of insurance if you will - as protection to the borrower in the event that they lose their job.

arnoldy

I agree with the posts here about personal responsibility. The order should be : deal with your problems your self, then ask family, then Charity, and then State (taxpayers) as a last resort.


Not the other way round.


Yes if it comes to State needing to get involved in our lives we should have a excellent system to support those in desperate need.