Millions in the Dark on Car Loans
February 20, 2018
Millions of British consumers are unaware of how much money they owe in relation to car loans they’ve taken out in recent years.
According to the online automotive marketplace CarGurus, close to half (47 per cent) of all the people with car loans around the country can’t say how much they owe their creditors in those contexts.
With a majority of new car purchases now being funded by car loans, there are concerns that more and more consumers are taking significant financial risks when they borrow money to buy new vehicles.
For some people that situation can easily lead to serious debt problems, particularly if the terms of large-scale loan deals aren’t properly understood.
CarGurus’ research suggests that almost two thirds (63 per cent) of car loan borrowers cannot specify the mileage restrictions and associated penalties that are outlined in the details of their car finance agreements.
James Drake from CarGurus has said that while car finance deals can be complex the extent of consumer ignorance “goes beyond misunderstanding and clearly needs to be addressed”.
“The fact that 47 per cent of drivers with a car on finance couldn’t tell us what they had effectively borrowed is mind-boggling,” he said.
“Car finance is a valuable tool, but consumers need to take more time to understand and educate themselves, as well as making sure that they only deal with reputable dealers who take the time to explain finance products properly.”
The scale of debts linked to car loans in the UK has been on the rise in recent years and doubled between 2011 and 2016, according to figures from the Finance and Leasing Association (FLA).
The FLA recently reported that an extra £34 billion worth of car loan debt was taken on by consumers across the country over the course of 2017.
Car loans are increasingly part of the picture for heavily indebted consumers in Scotland and across the UK.
If you live anywhere in Scotland and you’re struggling to cope with your debt problems then Scotland Debt Solutions can help. Contact us directly to arrange a FREE consultation.