Over the weekend we wrote a note about how the European auto lenders are becoming just about as ridiculously undisciplined as their counterparts in the United States. Apparently an ever-growing reliance of European millennials on lease financing has auto ABS investors worried about a potential crash in used car prices at some point in the not so distant future…that sound familiar to anyone?
But a new undercover investigation by the Daily Mail exposes just how “undisciplined” the auto lending market has become in England. Here are the headlines:
Reckless car loan salesmen exposed: How dealers are luring young drivers into massive debt by offering them new top-brand cars with NO cash up front Salesman are offering customers cars worth up to 20,000 for no deposit The deals make the customers pay back hundreds of pounds a month for years The cars are being offered to those on low wages and with poor credit rating Experts in the City fear the huge numbers could default and cause a crash If drivers fall behind on payments the cars can be automatically repossessed Of course, for American auto consumers nothing about the headlines above is all that shocking. In fact, we recently noted how one dealership in Texas was literally marketing a $1,500 “Low Credit Score” discount to buyers on a $55,000 truck. We guess it never occurred to anyone that perhaps, just maybe, a person with a credit score under 620 shouldn’t be shopping around for a $55,000 vehicle?
This post was published at Zero Hedge on Jul 4, 2017.
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