Weekly FS Regulatory News - 18 August 2017

BoE Staff Raise Risks from Car Finance Deals
Staff at Bank of England have warned car finance providers are taking greater risk to attract customers as vehicle sales and rising import prices take effect.

Car sales have fallen in recent months but remain at historical highs. It is alleged that car manufacturers and their finance houses are increasingly stimulating demand by offering cheaper newer forms of car finance. They add the industry continues to accumulate credit risk on the belief that used car values remain robust.

The staff note vehicle values at the end of the personal contracts have been falling slightly over the past year more than the industry expected.

The FCA began a probe into car finance in April over concerns of risk of mis-selling.

Dhallu & Co.