Scathing Report Finds BMW Australia Approved Loans To People Without Disposable Income

A review of BMW’s financing practices in Australia has revealed that the firm has been giving loans to people without any disposable income or means to pay them back.

Put together by consultants Ernst & Young and obtained by The Age, it reveals that BMW Australia Finance was vastly underestimating people’s monthly living expenses during their assessment for a loan.

Incredibly, in 100 cases that were examined, the German firm’s local financing arm quoted about 20 per cent of prospective customers having zero general living expenses and approved loans for people with negative disposable income.

For instance, BMW approved a $27,000 loan for a single mother with 10 children despite her only having casual employment and no disposable income. Meanwhile, a 76-year-old was loaned almost $50,000, about double the value of the car, based purely on earning projections rather than his real income.

The report blames a strong sales culture for the reckless loan scheme, since dealers would receive a $375 commission when approving a loan with a 5.49 per cent interest rate. If a loan at the maximum applicable 12.29 per cent was secured, the dealer received an $8,163 sales commission. It doesn’t take a genius to figure out the bubble would burst.

In a statement, BMW said it is co-operating with the Australian Securities and Investments Commission and is “fully committed to implementing a business model which reflects the industry’s best practice compliance, business processes and customer service.”

BMW 2-Series Gran Coupe Vs. Mercedes CLA Coupe: Design, Performance, Interior And Tech

The 2020 BMW 2-Series Gran Coupe is packed full of modern tech and ready to take on the world.

Hyundai Made A Veloster Battle Car And Named It The Grappler

The Veloster Grappler is a concept study for a post-apocalyptic world…err we mean the 2019 SEMA show.

14-Year-Old Aussie Crashes Into Lamborghini Urus With A Stolen Subaru

The teenager had a pretty wild night that ended when he drove into the very expensive Italian SUV.

Jaguar I-Pace Becomes Nurburging’s First Electric Race Taxi

You can now experience the electric Jaguar I-Pace as a passenger during a fast Nurburgring lap.

Bentley Starts Production Of The New Flying Spur, First Deliveries Due Early Next Year

The 2020 Flying Spur is assembled by hand in Crewe by a team of almost 200 employees.

Here Are More Pictures Of Aston Martin’s 2020 Vantage Roadster

The 2020 Aston Martin Vantage Roadster was spotted looking fabulous on the Nordschleife.

Tesla Model S Returns To The Nurburgring With Some Wild Aero

One of the Tesla Model S Plaid prototypes features an eye-catching rear diffuser.

Volvo To Reduce Car Lifecycle Carbon Footprint By 40% In The Next Six Years

Volvo is also aiming to become a climate neutral company by the year 2040.

European Markets Will Keep Wagons Alive, Despite Slumping Sales

Data shows that station wagons held a market share of just 11% in Europe last year, compared to 34% for SUVs.

Renault and Waymo Exploring Self-Driving Paris Airport Service

Renault and Waymo are currently exploring the notion of an autonomous mobility service at Charles de Gaulle airport.