Automobile Associations And Car Finance

Press, Issue 30997, 1 March 1966, Page 16

Automobile Associations And Car Finance

The New Zealand Automobile Association’s scheme for a central registry may prove, on closer examination. to be more of a burden on motorists than a protection. The proposal is for the establishment of a register of all loans made on cars so that a buyer, through his dealer, may discover if the car he is buying is “ encumbered Reporting on the proposal to the association, Mr J. B. Horrocks said that at the moment a person buying a bad title has to “ stand the rap ”.

Car finance is usually provided, under a “ customary hire purchase agreement ”, by a hire purchase finance firm. A hire purchase agreement, unlike an instrument which transfers property or chattels, does not have to be registered with the Supreme Court, as goods sold subject to a hire purchase agreement remain the property of the owner until the debt is cleared. A national register of chattels subject to a bill of sale, mortgage, lien, or any other “ instrument ” could be compiled fibm the present 11 district registers. But the task of compiling a national register of hire purchase agreements would be much more formidable. It would require the co-operation of every hire purchase firm and every car dealer in the country. The costs of maintaining such a scheme would be considerable. These costs would inevitably be passed on to the purchasers of used cars, in the form of higher hire purchase charges. Certainly the scheme might virtually eliminate the present risk, borne mostly by dealers, of purchasing a car with undisclosed debts outstanding. It may be supposed that these risks are passed on in the present hire purchase charges, so that some offset against the cost of instituting a central registry could be expected. But in the South Island, at least, these risks are low; reputable dealers report few instances of persons trying to pass off their debts in this manner, and fewer still of such attempts succeeding. It is significant that the suggestion for a registry did not originate from the Licensed Motor Vehicle

Dealers’ Association. If a significant drop in bad kdebts could be achieved by such a scheme, would ■the dealers not Lave thought of it before the ■automobile associations?