At the start of National Consumer Week today, the Trading Standards Institute (TSI) has warned that young motorists eager to get their hands on their first car are being encouraged to take on ‘desperate’ debt. Because of their often poor credit histories, many young car buyers are being offered multiple credit agreements to buy the car, pay a deposit or to fund extended warranties, often at uncompetitive rates, and with no automatic cooling-off period for buyers.

Some dealers, particularly independent car supermarket outlets, appeared to be exploiting the eagerness of young motorists to get behind the wheel of their first car, a TSI spokesman said.

Consumer Direct, the government helpline, received a total of 27,000 complaints about second-hand cars bought from independent dealers in the nine months to the end of September.

"We are particularly concerned when we hear about consumers who are taking out one loan to cover the cost of the deposit and a second one to cover the remaining balance," said Peter Stratton, the TSI’s lead officer on the motor industry.

In one instance under investigation by Trading Standards, a motorist bought a car priced at £9,000 only to end up owing more than £20,000 through credit agreements.

- A new insolvency procedure that will provide debt relief for people in England and Wales who owe relatively little, have no income and no assets to repay what they owe and cannot afford to make themselves bankrupt came one step closer on 16 November when the Tribunals Courts and Enforcement Bill was introduced into parliament. (www.insolvency.gov.uk)

Source:motorcarloans.com