Consumer Action supports ASIC’s proposal to prohibit flex-commissions in the sale of car loans through a legislative instrument. There are clearly significant variations in the interest rates charged on loans sold in car yards.
For example, in recent years Consumer Action has seen interest rates on loans in one car yard vary from 12.89% to 16.5%. Interest rates have been as high as 28% in others. Our experience reflects ASIC’s observation that people who take out loans with an interest rate well above the base rate are likely to be financially vulnerable.170328_CALCSub_ASICFlexCommnsBan