The Breakdown: Car loan exploitation. Five things you need to know about the automotive lending problem.
What’s going on?
People are buying cars they can’t afford and government regulators are sick of it.
The Australian Securities and Investment Commission has gone after credit providers ranging from dodgy outback car dealerships to global automotive powerhouses, small-time loan centres and one of the big four banks to protect consumers from exploitative practices… and themselves.
This week, Motor Finance Wizard agreed to cop more than $11 million in refunds and write-offs to more than 1500 customers who signed up for a vehicle lease or loan between July 2010 and July 2014.
While it isn’t exactly a household name, you might remember the Motor Finance Wizard jingle from its television ads. Sing it with me:
“Motor Finance Wizard says yes!”
You get the idea.
The promise was that anyone could get a car loan from Motor Finance Wizard, even if banks, dealerships, credit unions and your wealthy old uncle said no.
Check out the sober blurb presented to consumers who pop over to the Wizard’s website and apply for a loan:
“We consider everyone! Apply now, even if you are an ex-bankrupt, have bad or no credit history, are unemployed, self-employed, a pensioner or sole parent.”