EAGER young Leeds drivers are running up big debts after being persuaded to take on high-interest credit when buying a car.
First-time buyers and those with a poor credit history are regularly being offered one high-interest loan to cover the deposit on a car and another for the balance.
Others are persuaded to take out separate credit agreements for extras such as warranties or other insurance, often at highly uncompetitive prices.
And there is no legal cooling-off period once a deal is struck – meaning buyers cannot back out if they later realise what they have done, consumer experts warn.
Cases currently under investigation include that of Richard Oldfield, a young insurance clerk.
The 22-year-old scoured the lot of a car supermarket with his girlfriend, Cheryl, before deciding on a one-year-old silver Ford Fiesta valued at £7,500.
By the time he had left the salesroom he had signed credit agreements for the car and a separate three-year warranty costing £1,795, with interest on both payable at 18.9 per cent APR.
He was now in debt to the tune of £14,361.
"I was pretty shocked when I sat down at home and realised how much I had to pay back, but I wasn't too worried," said Richard, who lives on the outskirts of Leeds.
"When the salesman had seen I was a bit unsure about signing the agreement he advised me I could come back if there was a problem as long as I got in touch within 14 days. As it turned out, that was not the case at all."
Richard discovered there was in fact no legal cooling-off period for the car deal, at which point his mum, Carol, stepped in to advise her son.
He took out a new loan for £8,000 with a bank at a much more favourable interest rate to help pay off the original agreement for the car. However, he remains locked in dispute over the warranty.
Pitfalls
"It has been a very hard and costly lesson for Richard," said Carol. "I think the sales tactics used were highly questionable. The dealer certainly took advantage of Richard's eagerness.
"I would advise anyone in Richard's position to be extremely wary about taking on credit and, ideally, to take away any paperwork to study before signing."
The Trading Standards Institute and bosses at Consumer Direct Yorkshire & the Humber are highlighting the potential pitfalls faced by young car buyers as part of National Consumer Week, which runs until Friday.
Peter Stratton, TSI's lead officer on the motor industry, said: "We want to ensure people don't get taken for a ride when they go out to buy a car and that instead they slow down and think."
"All dealers want to secure the best profit they can on each car.
"Selling extras on credit, including insurances, warranties, breakdown and roadside assistance, is a lucrative sideline.
"Motorists should never sign anything without knowing exactly what their total payout will be, how much they will owe each month and whether they can get a better deal elsewhere."
The TSI warns some dealers, particularly independent car supermarket outlets, appear to be exploiting the eagerness of young people to own their first car.
"Unfortunately, there is no cooling off period once agreements of this nature have been executed, so it is usually too late to back out," added Mr Stratton.
"It is vital that all buyers, particularly young motorists, think long and hard before signing any type of credit agreement.
"Don't expect the deal to look after your interests – it is up to you to look after yourself."


Top tips to help you buy car
Experts at Consumer Direct advise all would-be car buyers to follow a basic checklist:

Shop around. Visit a number of different dealers to see what they have in your price range.

Complete an HPI check on the vehicle before purchasing or signing any finance agreements.

Once you spot a potential purchase, check out its recommended value in a trusted industry price guide. This will help you avoid being overcharged.

Check the service history/ MOT documents – look out for mileage discrepancies. The car will only be of value if the mileage can be guaranteed – if it has not been 'clocked'.

Test drive the vehicle and inspect the tyres and bodywork carefully.

Ask whether the salesman/ garage knows whether the car has been in an accident, is an import or has been written off by an insurance company.

If you are being sold any extras – breakdown cover or an extended warranty – check whether you are getting value for money.

If you are thinking of using credit, check what the cost of the loan would be with other lenders. Never be hurried into signing a credit agreement.

If you buy privately, be extra careful and remember that you have fewer legal rights.

Make sure you know the value of any vehicle you are trading in.

Before you commit to buying a car, make sure you fully understand the conditions of sale and any finance agreement.