Thanks to foreign sources (and we are not talking about extraterrestrials now!), More and more people are buying new or used cars – on credit. However, many of them realize later that it was a mistake to buy a car under the given funding conditions.

Let’s go back in time


Some of my acquaintances also wanted to get rid of their car before the car loan expired, but this loan had its limitations due to its construction. That’s when I started to get deeper into car finance. I was looking for an explanation in the news magazines of why it is so difficult to get rid of foreign-funded, certified or leased cars, how could this problem be avoided?

This is how I found the 1/2007 of the Hungarian Financial Supervisory Authority. This is addressed to executives of financial institutions dealing with car lending and car leasing, more specifically car leasing. Here are some suggestions that everyone should be aware of, especially those who are considering buying a car. I would like to present these suggestions in more detail.

Due to the intense competition in the market segment


Financial institutions also offer products that embody increased risk for higher profitability and leverage information asymmetry between certain financial institutions, themselves and their clients, and their lack of risk awareness and financial literacy.

The basic problem was formulated in the HFSA Circular. The fact is, customer information in Hungary is inadequate, since neither financial institutions, nor car dealers, nor car credit intermediaries have any interest in changing this, since this is a car sale or car. car loan placement may be severely reduced. That is why buyers need to be very careful if they want to use a foreign source to buy a car (and again, this is not about extraterrestrials). The use of a car loan calculator is also strongly recommended, it is a serious financial decision, we cannot rely solely on what you have heard in the commercials.

Every single detail of the car loan construction needs to be addressed separately. Many questions arise regarding the HFSA’s recommendation: Why was this circular really needed?

Maybe financial institutions are not right with their customers?

Maybe financial institutions are not right with their customers?

To what extent do the financiers apply the recommended ones? How can the recommendations be enforced? What is the impact of its application or non-application on the car market, car loan market?

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