Avoid careless leasing and loans

Automotive

Due to increasing risks for clients buying cars and receiving loans on the one hand, and companies financing leasing and loans on the other, Financial Supervisory Authority (PSzÁF) promotes more effective communication of these risks.

25,000 cars were repossessed from clients who were unable to continue payments in the first 6 months (compared to 40,000 in the whole year in 2006). Risk is highest in the constructions with a duration longer than 8 years, excluding crash damage insurance, and without own capital.

The number of households buying new cars dropped by 15 to 20% compared to 2005, while with used cars the increase was so slight that it could not compensate the effect. This decrease in demand increased competition among leasing companies, which consequently loosened the conditions of contracts and constructions.

Clients need to be careful when calculating total expenses related to a car. They need to add up taxes, maintenance, and insurance. To make the situation easier, PSzÁF is starting an information campaign, concluded general director Csaba Varga. (Gazdasági Rádió)

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