Car payments are ruining our lives - BBC

[Telecaster]

There needs to be proper legislation on finance deals, you can't just shrug your shoulders and say it's their fault let them get on with it. It is their fault, but she wouldn't be up the creek if there were proper checks done on affordability of the repayments.

There should be a minimum requirement and proof of earnings required, but it won't happen as they're making money hand over fist on idiots getting hocked up on cars they can't afford on the never never.

 

[Hedge]

There needs to be proper legislation on finance deals, you can't just shrug your shoulders and say it's their fault let them get on with it. It is their fault, but she wouldn't be up the creek if there were proper checks done on affordability of the repayments.

There should be a minimum requirement and proof of earnings required, but it won't happen as they're making money hand over fist on idiots getting hocked up on cars they can't afford on the never never.

The industry needs sorting out. People do dumb stuff when they are young and naive.

When I was 20 I wanted a loan for £1000. The lady in the bank told me I could have the £1000 but only if I signed up for their gold credit card. I agreed, the £1k went into my bank then 3 days later a credit card with £4500 limit turned up at my house. By end of that year I had been to ibiza and spent a grand on turntables.

I was a moron but the banks practices were shady as hell.

 

[AHarvey]

Yes, she's to blame, but I think the finance company is as well.

They shouldn't be allowed to just sign people without checking they have the ability to pay it back.

A lad I know has started his own car sales business and is doing well for himself, he's your typical grease ball type, however, he's not actually selling cars, he's selling finance deals.

 

[MassiveJim]

whilst I agree with most people in here's sentiment, this is not an isolated incident is it ?
So whilst I don't feel sympathy for her, I have to say as a country for some reason we don't teach people basic economics in school, the Polish people that I have worked with seem far more switched on in terms of money, and i was wondering to myself if that is because they are taught to be more money savvy than we are.

I come from a poor background and when i left school I was terrible with money, I was in debt to the tune of £15k at the age of 25, at that point I took out a loan for £15k and paid it off.
But I had to teach myself about money and debt, I had no hand from anyone else, I am mathematically savvy though so its pretty easy for me to do that, a lot of people are not, so as much as a lot of you in this thread are saying its basic maths and easy to understand, you are not talking about people that are of an equal intelligence to yourself and they don't make decisions based on logic or reason like you or I may.

 

[Resident]

That article is trash, it doesn't even say how much the vehicle *should* cost but talks about finance costing £20k total.

Secondly, the financial ombudsman are about as useful as a chocolate teapot from my experience - I was mis-sold a car based on the spec/model and they deemed £500 was significant compensation.

Given the monthly repayment and average Apr on car finance the car was around 16k.

Given you can pick up top spec special edition models on 2015 plates for around that now I'd guess it had a moderate spec & between 2013-2015 reg.

But paying 20 grand for a small 2nd hand hatch, seriously?

Hearing she's a University student as well makes me question how? You used to have to be smart to get to University...

 

[[TW]Fox]

There needs to be proper legislation on finance deals, you can't just shrug your shoulders and say it's their fault let them get on with it. It is their fault, but she wouldn't be up the creek if there were proper checks done on affordability of the repayments.

There should be a minimum requirement and proof of earnings required, but it won't happen as they're making money hand over fist on idiots getting hocked up on cars they can't afford on the never never.

She had a job at the time and subsequently lost it. What would an affordability check have done to predict that?

 

[Nasher]

There needs to be proper legislation on finance deals, you can't just shrug your shoulders and say it's their fault let them get on with it. It is their fault, but she wouldn't be up the creek if there were proper checks done on affordability of the repayments.

There should be a minimum requirement and proof of earnings required, but it won't happen as they're making money hand over fist on idiots getting hocked up on cars they can't afford on the never never.

And this is why the whole recession started in the first place and another one is brewing.

They don't check things properly. They dish out loans because management is telling them they have to sell X number of loans a month. They don't care that they might not be able to pay it back months/years down the line, it's someone else's problem.

 

[BUDFORCE]

Greed.

Unfortunate trait of a lot of people that if anything is almost encouraged by modern society.

Funds capitalism. Ruins the environment, brings only misery in the long run.

 

[Ahleckz]

All these loans have a 14 day cooling period, so it's not like they can complain that they didn't get time to think about it and were pressured by the seller.

one for paying the girls debts (having not dragged her back to the garage within the cooling off period when they first saw the car) and second, for moaning to the BBC. I mean, really?

Yes, they have a cooling off period but that's only for the loan and the customer has to go back to the finance company to withdraw (and settle) - not the dealership. They still have to pay for it and buy the car.

To be fair to the industry, more checks have been put in place. When I was selling we didn't really ask any affordability questions and then sent the agreed deal to our finance department for them to approach the finance companies to get the deal. Very occasionally they'd come back and want proof of earnings but mostly it was a rubber stamp (and we pre-agreed the rates also). Nowadays, questions regarding rent/mortgage payment, salary and outgoings are asked for and a better picture of risk can be drawn up however I suspect this is a box ticking exercise rather than anyone properly looking into it (bar some circumstances).

Ultimately, it's completely down to the customer. Car sales executives are there to sell a car and a finance package, it isn't their responsibility to ensure that the customer can afford it.

 

[DeanT77]

But paying 20 grand for a small 2nd hand hatch, seriously?

That's a solid point that I glossed over to be honest.

 

[Iamzod]

I know someone like this. Paying over £300 for a car over the last 4 years but can't even afford to maintain it, so is now running around in a 4 year old golf which has still got the wipers from the factory which are falling to bits and never even had a service.

 

[mjt]

I know someone like this. Paying over £300 for a car over the last 4 years but can't even afford to maintain it, so is now running around in a 4 year old golf which has still got the wipers from the factory which are falling to bits and never even had a service.

The problem is that you know they’re paying off hideous amounts of interest. I managed to get a loan at 0.5%, so I’m only paying depreciation as the money was basically free

 

[Trifid]

we don't teach people basic economics in school

We teach teenagers that debt is OK and they should immediately go to university and 'study' something of interest to them regardless of long term employability. And most importantly the £50k of debt with a 6% interest rate is brushed under the carpet. "It's not a real debt." Are we surprised that the young then take on more debt without thinking through the consequences?

 

[bartledvd]

If you are smart enough to make the effort to get into university how can you be so bad at maths?

This issue will only get worse given the desperation to keep sales figures looking so good in the car industry.

 

[peterwalkley]

Jeez - a 5 year HP deal. I really believe 3 years should be the maximum allowed for any kind of car finance. When I bought my first car (late 1980's) it came down to 2 options: a Nova on a 2 year finance deal or a better specced fiesta on a 3 year deal for about the same monthly payments. I went for the Nova.

 

[Nasher]

We teach teenagers that debt is OK and they should immediately go to university and 'study' something of interest to them regardless of long term employability. And most importantly the £50k of debt with a 6% interest rate is brushed under the carpet. "It's not a real debt." Are we surprised that the young then take on more debt without thinking through the consequences?

Go to uni, get a massive debt starting day 1 of employment. Need to find a MUCH higher paying job to cover it. Can't get one because you're still a sprog with no experience. GG.

Unless the career you want absolutely requires a degree you're much better off skipping uni and going out to work. You can always get a degree later in life, with sponsorship or when you have some savings. But going to uni anyway and collecting huge debt is what people are pushed in to.

 

[Telecaster]

She had a job at the time and subsequently lost it. What would an affordability check have done to predict that?

Presumably as a student the job was minimum wage or part time, not enough to support the repayments in the first place!

I wouldn't sign up for £300+ p/m and I earn ok in full time employment!

 

[[TW]Fox]

Presumably as a student the job was minimum wage or part time, not enough to support the repayments in the first place!

She appears to have been able to support the repayments whilst employed. Don't get me wrong, it was a stupid idea, but it wasn't not affordable at the time so it's hard to see what the lenders fault is here.

 

[Terminal_Boy]

Hearing she's a University student as well makes me question how? You used to have to be smart to get to University...

That hasn’t been the case for a couple of decades now.

 

[Telecaster]

She appears to have been able to support the repayments whilst employed. Don't get me wrong, it was a stupid idea, but it wasn't not affordable at the time so it's hard to see what the lenders fault is here.

As a first year university student with a part-time job she'd originally gone out looking for a much smaller - and less expensive - car to help her get to and from lectures. But she was persuaded to buy the Audi, which will end up costing her more than £20,000. Mandy says her other daughter, Natasha, also took out car finance and was told to bring in three pay slips to prove she could afford the repayments.

But Mandy says there was nothing like that, what's known as an affordability assessment, for Victoria

Part time job, no income checks done. whose idea of affordability are we going by? If she earns £500 a month then £350 on a car isn't affordable even if her wage is more than the repayment.

There's no excuse here to letting her have that car in her situation, even by some shady finance salesman's slimy logic it's blatantly obvious.