ASIC’s early review findings about car finance failures come as little surprise to Financial Rights Legal Centre and Mob Strong Debt Help.

Our services spend a significant amount of time and resources assisting clients with problems related to their car finance arrangements, and the interim findings released by ASIC today directly reflect the experiences of our clients.

Of particular concern is the finding that almost half of all consumers who defaulted on their car finance repayments did so within the first six months of the loan.  This reinforces what we see in our casework - that many loans are unaffordable for people from the start, which raises questions about how they were approved for credit in the first place, given responsible lending obligations.

We look forward to reviewing the full findings of ASIC’s investigation when they are released in 2026.

Quotes attributable to Mark Holden, Acting Director of Mob Strong Debt Help:

“Having a car is particularly important for mob living in remote areas – they are a lifeline.

We have long been concerned that car finance lenders have not been making reasonable checks for affordability required under the National Consumer Credit Laws. ASIC’s investigation highlights that this means consumers are being set up to fail.  This is especially important for First Nations consumers where often their most expensive asset is their car.

The credit industry needs to commit to improving their practices – and particularly to avoiding further harm to First Nations communities by offering expensive credit beyond what people will be able to afford to repay.

We commend ASIC’s commitment to motor vehicle loans in their enforcement priorities – it makes a real difference to First Nations communities”.

Quotes attributable to Alexandra Kelly, Director Casework and Financial Rights Legal Centre:

“Time and again we speak to clients who are facing harms as a result of an unaffordable car loan. The web of brokers and finger pointing between lenders, dealers and brokers needs to stop. Hardship arrangements need to be meaningful and help consumers get back on track.

We are pleased that ASIC has already issued guidance to the various lenders involved, and hope the credit industry takes this opportunity to improve rather than wait for enforcement action”.

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About Financial Rights

The Financial Rights Legal Centre is a community legal centre that specialises in helping consumers understand and enforce their financial rights with consumer financial products and services, especially low income and otherwise marginalised or vulnerable consumers. We provide free and independent financial counselling, legal advice and representation to individuals through our following channels:

• Credit and Debt Legal Advice Line 1800 844 949 for those needing legal advice in NSW;
• National Debt Helpline 1800 007 007 – for people needing to talk to a financial counsellor (please note this line is answered by a number of different services around Australia, Financial Rights is one of those services);
• Financial Rights Legal Centre - https://financialrights.org.au/;
• Mob Strong Debt Help 1800 808 488 – our national service for Aboriginal and Torres Strait Islander callers https://financialrights.org.au/mob-strong-debt-help/;
• Insurance Law Service 1300 663 464 – our national service focusing on problems with insurance or debts to insurers.