Car Finance Fuels Debt Bubble Drivers Have To Cut Spending
Drivers with Finance Agreements Struggling to make Payments
Surveys have shown that almost 50% of drivers with finance agreements have had to cut back on spending to meet car finance payments.
Early Termination Penalties
Some drivers have been hit with large penalties for handing their cars back early, because they couldn’t afford payments.
Fears Mount as Car Finance Debt Bubble About to Burst
Almost 50% of drivers using car finance deals, admit that they don’t understand the small print or even know just how much they have borrowed.
That amounts to just under 3 million UK drivers with 90% of drivers polled admitting they have no idea what all the small print in their contracts means, or how much finance they have committed to.
5.9 Million Finance Agreements Active
According to figures released by the FLA 5.9 million drivers in the UK currently have a car related finance agreement in place.
3 out of 5 drivers openly admit that they have signed a car finance deal tying them into several years of payments, without having a good understanding of exactly what they have committed themselves to.
Excess Mileage Trap
With the popularity of mileage limited finance deals on the increase, many drivers are exceeding their agreed mileage limits and facing additional costs of up to 30p per extra mile.
With most of the drivers unaware of what the excess mileage means in real terms, they are dealing with a ticking timebomb of potential debt.
Unmanageable Debt Further Burden to Cash Strapped Families
With almost 1 million cars acquired on finance last year alone, the resulting unmanageable debt could be very damaging to drivers that find themselves in negative equity and saddled with large excess mileage bills.
Personal Credit Scores
Many people weren’t aware that submitting multiple applications for credit, can also adversely affect their credit score, reducing the possibility of being accepted by lower rate finance companies.
High Use of Car Finance
“Much of the concern over rising consumer debt is caused by car finance deals”
Approx. 90% of UK drivers fund cars using some form of finance, tempted by cleverly marketed offers that hide the actual cost landing people in a lot more potential debt than they expect.
Speculation of mis selling, and irresponsible lending have led the financial conduct authority to launch a review of the automotive industry, to investigate such claims.
Easy Car Finance Fuelling Ticking Timebomb
With so many people struggling to pay finance agreements, fears are that people are being driven into deeper debt and the situation could cause a problem for the wider economy.
What Is A Viable Alternative To Car Debt
Clearly car finance is a massive financial burden to may families but there is a viable alternative that can offer savings of 80% or more.
Crowdfunding is a realitively new concept but gathering popularity very quickly - MORE...
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