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The Guardian: "Sub-prime cars: are car loans driving us towards the next financial crash?"

"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"

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"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.

"... Car financing in the UK is a 'flashing light', according to Andrew Evans, a fund manager at investment firm Schroders. 'Borrowing is a very bad idea when it is done against a depreciating asset … such as a car,' he said, adding that there was a 'serious level of fragility built into the system'.

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