Car financing crackdown

Page may contain affiliate links. Please see terms for details.
A few youngsters I know have recently gone the PCP route. It was interesting to hear what the dealers were looking at. There was a delay on one where there was an anomaly on the lad's mother's maiden name - no deal if it had not been resolved(it was). In another case the dealer looked at bank statements and advised that if there were payments to BetFred and the like, there was no deal available. Some caution is clearly being exercised, but obviously a dealer can't predict whether a punter will actually make the required payments.
 
I helped a pall move some stuff today for his mum.

Parked in the adjacent drive, a 6 year old C class, no tax or MOT and rather beaten up with every wheel dinged and big scratches/dents everywhere.
The young lass that owns it can't afford to have it fixed for MOT and can't hand it back (can't anyway without an MOT) till March next year.
I wonder if she is one of those who find preposterous the idea of taking-out a loan to finance your higher education?
 
I wonder if she is one of those who find preposterous the idea of taking-out a loan to finance your higher education?

Exactly, of course needs to be in a new(ish) car as her friends have one!

Another friend (mechanic type) gave an 18th birthday gift of a little mini, all serviced, cleaned and fresh MOT to his 18 year old niece.
The niece loved the car till one of her friends got a shiny new car, mum then sold the mini and got the lass a new car on PCP. You just can't tell them.
 
The key is that it's not the lender choosing a higher rate based upon their assessment of the risk but, instead, it's the dealer setting a higher rate in order to earn a larger commission.

Agreed. Finance companies are under more a more pressure to make sure that they’re only approving applications where it is clear that the individual or company can actually afford the payments and have a track record of being able to do so.

There’s always going to be a market for people with poor credit history that are deemed high risk. If there wasn’t they’d simply have no option at all, which I think some would see as being worse.


Sent from my iPhone using Tapatalk
 
Agreed. Finance companies are under more a more pressure to make sure that they’re only approving applications where it is clear that the individual or company can actually afford the payments and have a track record of being able to do so.

There’s always going to be a market for people with poor credit history that are deemed high risk. If there wasn’t they’d simply have no option at all, which I think some would see as being worse.


Sent from my iPhone using Tapatalk
My point is that it's not the dealer's responsibility to identify risk, that is for the lender to assess.

The FCA's issue is with individual dealers, or even salesmen, setting a higher rate purely to earn more commission.

In the case of impaired credit cases the lender should cascade the case onto a higher rate if a potential risk is identified, the dealer does not have access to the data to assess risk.
 

Users who are viewing this thread

Back
Top Bottom