Drivers thinking about financing a car have been urged to make one check in a bid to avoid scams causing them to lose out on thousands of pounds. Vehicle financing is one of the easiest and most affordable ways to get behind the wheel of a shiny new model, allowing drivers to spread the vehicle's cost into monthly instalments. However, Jonathan Such, motoring expert at First Response Finance, warned all drivers to be careful around deals that make guarantees that seem too good to be true.
He said: "If an online finance deal promises guaranteed approvals, no credit checks or exceptionally low interest rates, be cautious. These offers can seem appealing, especially if you have poor credit, but they’re often designed to access personal details, charge hidden fees or trap you in unaffordable agreements. Many of these ‘so-called lenders’ operate without Financial Conduct Authority (FCA) regulation, meaning there’s no legal protection if something goes wrong."
Whilst many companies may be interested in offering particularly attractive finance deals on new models to increase demand, particularly on electric cars following the DVLA's decision to end tax exemption, drivers should still be careful to what they agree to.
This is because some lenders may not make some necessary fees clear to drivers before they sign up, meaning motorists could be subject to paying significantly more for their car.
In addition, untrustworthy lenders are also less likely to follow guidelines set out by the FCA, meaning there is little a driver can do to rectify the situation they find themself in.
Instead, Jonathan suggested that drivers should only agree to a car finance deal that is offered by a lender associated by the FCA and, if the deal seems too good to be true, thoroughly check the terms and conditions.
He added: "Always compare offers from well known, FCA regulated lenders to see what realistic rates look like. Verify a lender’s credentials using the Financial Conduct Authority Register, which all legitimate lenders will be listed on. If you can’t find them or the lender is vague about regulation, walk away.
"If an offer stands out as significantly better than others, scrutinise the terms carefully and verify the legitimacy of the lender before proceeding."
Facebook Conversations