Public Defender: Seven years of pain averted with credit deal undone

AARON was clobbered with an interest rate of 17% when he bought his 2010 Holden Colorado. So Public Defender stepped in.

Aaron with his Holden Colorado ute.

THIS young man faced paying more than $65,000 for this second-hand ute at an ­interest rate of 17 per cent until The Daily Telegraph undid the dodgy deal.

Aaron went to a Western Sydney caryard in March looking for a Ford Falcon. There wasn’t one on the lot. The salesman suggested a 2010 Holden Colorado — asking price $33,950.

The salesman said the Colorado would cost $150 a week to own. Aaron said that was more than he could afford. The salesman said he would be able to get the price down to between $130 and $140 a week, Aaron could take the car and the paperwork could be sorted out next week.

Aaron, 21, agreed.

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When he returned to the dealership three days later he was presented with a seven-year contract totalling $65,702 at more than $180 a week in repayments.

“That appears to be breaching responsible lending laws,” said Consumer Credit Legal Centre principal solicitor Katherine Lane, who has helped many junior consumers in similar situations.

When Aaron saw the interest rate he was going to be charged, he was worried. But the salesman said he could ­refinance to a lower rate in just eight months.

“They can’t promise that. It’s subject to approval. That’s straight out misleading conduct,” Ms Lane said.

Still, Aaron signed the paperwork. After his parents learned of the terms, a complaint letter was sent to the dealership. In it Aaron said he believed he had been misled into a deal he couldn’t afford. He wanted to return the car and to cancel the contract.

The dealership responded: “We ... are unable to assit (sic) you with your request to return this motor vehicle as you where (sic) well aware of the interest rates and repayments at the time of purchase.”

That’s when Aaron’s concerned father contacted Public Defender. We spoke to the dealership, which can’t be named. The deal was undone.

Credit, whether it’s shiny plastic or a loan, can seem like easy money: have what you want now and pay later.

But some young people do not give enough consideration to the potential long-term consequences, such as a bad credit rating or even bankruptcy.

If you or one of your children is looking for a first car, Ms Lane has this advice:

* Shop around. This will ensure you get a decent deal. Do not fall in love with a particular car;

* Bring a mate. Their only job is to not let you sign anything until you’ve shopped around; and

* Do not agree to spend more than you can afford.

If you end up in a situation similar to Aaron, contact the Consumer Credit Legal Centre on 1800 007 007.

SWEETENED DEAL AFTER BEING SOLD A LEMON

KYLEE Ward from the Central Coast paid nearly $20,000 for a new Hyundai Elantra in November last year. But it was a dud.

Kylee Ward of the Central Coast, who turned to Public Defender after her new car failed.

The car has spent almost as much time being repaired as it has in Ms Ward’s possession.

It had been at the dealer’s workshop for nearly two months — the third crack at a fix — when a fed up Ms Ward contacted Public Defender last week. She either wanted a new car what she had paid for or her money back, which is are her rights under the Australian Consumer Law.

She had made this point to the dealership, but it had tried been trying to fob her off to Hyundai.

Public Defender contacted the dealership owner, who said he had not known of Ms Ward’s situation. He called her that day afternoon and promised a like-for-like replacement.

A grateful Ms Ward said the replacement car is due later to arrive this week.