Sub-prime cars: are car loans driving us towards the next financial crash?
by Patrick Collinson from on (#2C6VE)
Analysts fear the boom in personal contract plans are mirroring the sub-prime mortgage scandal and are fuelling a colossal build-up of debt in UK and US
A huge increase in the amounts borrowed by already indebted households in Britain and the US to buy new vehicles is fuelling fears that "sub-prime cars" could ignite the next financial crash.
British households borrowed a record 31.6bn in 2016 to buy cars, up 12% on the year before, said the Finance and Leasing Association on Friday. Nine out of 10 private car buyers are now using personal contract plans (known as PCPs), which have boomed since interest rates fell to historic lows.
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