Some UK car salesmen are "forgetting the lessons of the past" by selling vehicles to customers on low wages or with poor credit ratings, prompting fears of mass defaults and a crash in the market. The government has been accused of failing to protect consumers from unscrupulous dealers. The Bank of England warned car finance debt owed by UK drivers has risen 15% in the past year to £58bn and that banks could lose up to £1.7bn ($2.2bn) if the value of second-hand cars keeps falling.
Some UK car salesmen are "forgetting the lessons of the past" by selling vehicles to customers on low wages or with poor credit ratings, prompting fears of mass defaults and a crash in the market. The risks stem from long-term personal contract purchase deals, under which customers pay thousands of pounds over several years, a cycle which is also depressing the second-hand car market. The Bank of England warned car finance debt owed by UK drivers has risen 15% in the past year to £58bn and that banks could lose up to £1.7bn ($2.2bn) if the value of second-hand cars keeps falling.