The Risks Of Car Finance In The Recession

Thursday, 23. October 2008

Now is the time to take great care with the funders, dealers and brokers, both online and offline, that you use to fund your next car. Things are getting tough and having lived through the last recession I know many of the tricks and scams that they all get up to in order to secure life saving orders. Cars are expensive items and great care should be taken over the selection of suppliers. I’ve been in this industry for over 25 years and I am well placed to see through the recession but many aren’t and these are the ones to beware of. We will see many dealers and brokers (online advertisers) go so beware of making initial rental payments to dealers and especially brokers. I mentioned a couple of weeks ago the sad story of a lady who made an initial rental payment to a broker and now has her brand new Audi parked in a garage, unable to drive it, whilst solicitors sort out whether she is entitled to keep the car. Sadly I had to say that it is unlikely because she wasn’t aware that when you deal with a broker on the internet he is working for you and not the leasing company so the car is still owned by the leasing company who has not received the initial rental paid to the broker by the customer. And this is far from an isolated case. This situation will become more common as brokers fight for survival, happy to settle for a fee of £50 in order to finance a car. The question is – where will they be when you need support following a dispute? A few lines of explanation on a web site makes vehicle finance look so simple but it can be as complex as buying a house but with more options. The difference is that house financing is governed by the Financial Services Authority (FSA) which offers at least a reasonable level of protection whilst there is no FSA control over vehicle financing. If you haven’t already purchased a copy of my book ‘An Insider Guide To Car Finance’ you need to, it may be the best £19 you have ever spent! Go to www.carfinanceandleasinginfo.co.uk . By Graham Hill