"Although Go Car Finance appears to have checked the loan was affordable for [the man], we have seen no evidence it checked the loan was suitable,” Styles said."
"Consumer NZ investigative team leader Rebecca Styles said the Wellington man was desperate to get a car, but had a poor credit history."
This is unfortunately just part of investing in SVR. "Normal" people see interest rates of 25%+ and fees and think its outrageous. The trouble is the lack of understanding around the costs associated with dealing with undesirable credits. Go Car provided a service to someone otherwise unable to buy a car.
Its a tricky situation society is in, no car at all or an expensive car because of the higher risk of the consumer? It's the same story as Australia, a question around personal responsibility versus harm reduction.
Reads as if Go Car with face some sanctions and will have to tighten its practices. NZ is in a recession of sorts and complaints are likely to increase as more and more people will be able to claim the "not suitable" etc lines.
The irony is that SVR avoided regulatory action when it was a payday lender a few years back, despite intense scrutiny on the sector. Cash Converters was a major casualty. Now it's a car loan specialist with way less of a ethical question around it, yet bang regulatory action.
note: I had no idea about the immobiliser aspect, with great power comes great reposibility! I wonder how many days past due before they turn yiur car off? Definitely help with reducing bad debts!
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