cars

[adtnk]

If a car dealer has rolled on existing finance (HP) from one car traded in to another used car, now creating negative equity is this "IRRESPONSIBLE" lending and if so what can be done?

[factor-fiction]

Or is it irresponsible borrowing?
Was the borrower misled in some way?

[chas2008]

i wouldnt of thought so, many people take out 5 year finance and when they go into year 4 they often owe more than the value of the vehicle. In fact many finance deals on the cheaper end of the used car market end up this way finance = more than vehicle value.

[EvianBaby]

I'm not sure if you mean the same thing but when I bought my car I had it on HP with a final balloon payment. When that payment came up with was a little more than the value of my car and struggling financially at the time I couldn't pay off the final balance so looked into the option of trading it in for a new car (quite legit) but it didn't take me long to realise all I would be achieving was actually earning myself a bit more debt by taking out HP on a new car. A very stupid idea which I'm grateful I came to my senses for. I don't think it can really be blamed on the garage who accept the old car as a part ex. I would definiely go along the lines of irresponsible borrowing over lending.

[d9f1c7]

Pretty well all car finance on cars creates negative equity. The dealer's selling cars and getting commission for Finance, that's what they do. If people are stupid enough to borrow like this then that's their look out.

[gingejbee]

"irresponsible lending"? Ah, is that the smell of possible compensation?

[Andyvon]

The term 'mis-selling' (whatever that's supposed to mean) seems not to be too far away here.

I think there's a basic rule with cars adtnk - never borrow money to buy them. Always pay the full amount in cash - and if you can't pay cash then you can't afford the car! Being able to just about meet the monthly payments for three or five years is not being able to afford the vehicle - you can only afford it if you have the cash in the bank.