ASIC Initiates Comprehensive Review of Motor Vehicle Finance Practices

ASIC's examination will encompass the practices of lenders, brokers, and intermediaries, scrutinising their adherence to responsible lending obligations. Key areas of focus include the management of loan defaults, hardship practices, and dispute resolution processes. Initially, seven lenders are under review, with plans to extend the assessment to additional brokers and intermediaries as the project progresses.

The regulator has signalled its readiness to take enforcement action should any misconduct be identified. ASIC emphasised that addressing issues in used car finance sold to vulnerable consumers remains a top enforcement priority for 2025.

This review follows recent legal actions by ASIC against entities such as Money3 Loans Pty Ltd and car dealerships like Diamond Wheels and Keo Automotive. These cases allege breaches of responsible lending obligations and the provision of unlicensed car loans with excessive interest rates.

By undertaking this comprehensive review, ASIC aims to strengthen industry compliance, improve lending practices, and minimise consumer harm. The initial findings are expected to be published in the latter half of 2025, followed by a more detailed public report.

For consumers, this development underscores the importance of understanding loan terms and conditions. Borrowers are encouraged to seek transparent and fair financing options, especially those in regional and remote areas who may face unique challenges.