MPs call for the car finance industry to begin publishing the details of defaults and arrears rates as the speculation around finance agreements continue to grow.
Concerns about the health of the industry and even the value of vehicles have led to MPs asking questions about how these deals are being made.
If there are huge numbers of defaults on these loans, it could cause a ripple effect that could lead to another financial crisis.
The situation has similarities to the situation in 2007, with car finance firms selling some £5.5 billion in risky loans last year – double the figure of the year before. The Bank of England has said that drivers now owe £58 billion in car finance, an increase of 15% on 2015’s figures.
MPs and campaigners are calling for a crackdown on these ‘reckless’ tactics. Meanwhile, manufacturers, Vauxhall and Suzuki are investigating the conduct of their own dealerships. Furthermore, the Financial Conduct Authority (FCA) has already said it isinvestigating ‘irresponsible lending’ in the motor industry.
We encourage you to think very carefully before you commit to any car finance deals.