Actually I don’t think the big brands actually depreciate less. It’s optics. If you configure a German car you end up with thousands in options so a car with a basic price of 40k can easily end up at 50k. Three years later it’s trade in value is 30k which is “only” 25% depreciation on the basic price but really you’re 20k down not 10k down.
Absolutely the dustman’s fault.
Firstly, because he applied for the loan. The bank official didn’t contact him and ask him to take out a 1.1m loan. It was his decision, he made the application and he signed the papers, and people have to take responsibility for the consequences of their decisions.
Secondly, because he must have provided information to lead the bank official and more importantly the bank IS system to believe that he was good for 1.1m, because no way would a bank ever approve a 1.1m loan on a dustman’s salary. I’m sure it’s not uncommon for people to write alternative figures on loan application forms, but again, if they decide to do that then they have to take the consequences.
Slightly off topic and I may have mentioned it before… BUT… a friend asked his Bank Manager for a loan (for a car as it happens). anyway the BM turned him down. (My friend confided in me over a pint).
A few weeks later that friend won £1m on the Pools (in the days when £1m was a great deal of money).
Anyway - I was a lowly junior clerk at the Bank and the BM asked me if I would like to have a word with “my friend” to encourage him to place his money at the Bank. 
I non-committally agreed to have a word… but of course my friend went elsewhere with his money… and who could blame him.
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But you seem to think that without lenders, there would be no money.
Of course there would. There would be more, because the bankers wouldn’t be filtering their share out of the economy.
You make something, you sell it, you have funds to buy something else or to buy in a service.
Debts and loans don’t create new money. All they do is skew the trajectory of money that has been created in some other way. That’s my gripe.
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Actually Riyadh Bank in Saudi was a client of mine Véronique and Islamic banks do lend, they just call the interest a “fee”.
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Reckless lending or reckless borrowing, it takes two to tango.
I’m not sure why you think that it’s good for anyone when someone defaults on their loan. How is losing money good for the credit company? I imagine that it’s a black mark against the salesman, and the garage has lost a customer and will probably end up repossessing a car that hasn’t been properly maintained and cared for. Sounds like lose lose to me.
The customer on the other hand had the satisfaction of driving a car that massaged her ego for a while, and she may manage to get out of ever paying back what she promised to pay.
I’ve been there, when I was a young adult I fell into the multiple credit card trap and at one point I could barely afford the interest payments let alone pay off the debt. So I know how easy it is to do, when every post brings an offer for a credit card with an interest free introductory period. But, I never attempted to blame anyone except myself. Eventually I got it all paid off in the end and I had learned my lesson.
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That’s where the whole subprime crisis came from Anna. Banks want to lend, bank officials are incented directly or indirectly to lend. That can lead to reckless behaviour. When the banks get it right their staff get bonuses and the shareholders get dividends, when the get it wrong the tax payer has to bail them out. This sketch was very prescient. https://m.youtube.com/watch?v=mzJmTCYmo9g
This girl was oversold and of course she has some responsibility but so has the salesman, garage and lender.
Money is not wealth Anna. Wealth is created but money is just printed. It’s all about quantitative easing these days 
There’s no inflation but money seems to be worth less and less because there’s more and more of it. Did I read that Google or Facebook are thinking of their own cryptocurrency?
My sympathies stem from the general situation that young folk find themselves in and the fact that losing a job can happen to anyone.
Otherwise I agree with much of the sentiment expressed already - we do run on credit which is not great at an individual level. I mean, it’s great for the banks as they can invent money but get us to carry the risk - well, until it goes pear shaped and someone spots that the castles built in the ait have no supports. However it is still the case that a lot of individual hardship was created in the last crash but the bankers have largely come out squeaky-clean.
We do seem to suffer from a blame culture and instant gratification seems to be the norm whether one can pay or not. Sadly I don’t think you can stuff that genie back into the bottle - and yes, you might argue that “borrow to buy what you want, then payback over 12 months” is essentially the same as “save for 12 months buy what you want” - except that you had the item that you wanted 12 months earlier.
Oh, and the banks are a bit richer.
However, as I said, it is much harder (in the UK at any rate) for the young to get on the property ladder than it was in, say, the 1970’s.
But, as with any simplistic statement, “it’s all the fault of modern attitudes” fails to fully understand the changes that have occurred in society and its attitude to debt and saving.
I don’t think I did blame the system, did I?
No, of course not - that would be a silly statement
But look again at that figure - 80% of the money supply.
Without credit there would be a hell of a lot less money.
No, they really create new money.
Out of thin air.
No you didn’t Paul. We are talking about the lady on the BBC report that can’t pay the car debt each month 
Indeed - but if I read the report correctly its her mum who is going all “shouldn’t be allowed”.
My comment about it not being her daughter’s fault was ironic, in case that was not obvious.
And wealth is not money. You can be wealthy and not have much money. You can temporarily have a lot of money in your pocket and not be wealthy. You earn money but you don’t earn wealth. Unfortunately too many people have lost the difference between wealth, money, value, cost, worth, price etc and they see everything in terms of ££££.
One of my first jobs was in a bursar’s office and on my first day I was a bit gobsmacked at the huge amounts of money I was dealing with, I was scared of inputting a wrong figure and wreaking havoc with the business. One of the other staff said to me “Don’t worry about it Anna, it’s not real money, it’s just figures on a sheet of paper.” And in a way, that’s how I’ve always looked at money. In itself it’s just figures. It’s what you do with it that matters - do you turn it into wealth, do you turn it into a long-coveted possession, do you use it to try and make a dream come true, do you spiff it up a wall.
But then that’s a risky way of looking at it because you do have to respect it too. Otherwise if it’s only figures on a sheet of paper, it’s all easy to justify taking out a loan and turning it into a new car, and saying Well the figures on the sheet of paper don’t matter, what matters is being able to drive my car.
No. Credit creates the illusion of more money, that’s all.
My UK credit card statement says I have £X,000 available to spend - but that’s not the same as actually having £X,000.
For all practical purposes it is.
And, let us say that you spend some of that money - what happens.
Well, you are no poorer - you owe the credit card some money so there is an obligation but your bank balance is no less.
Whoever you paid is richer, by the cost of the goods.
So what just happened? Well, some money popped into existence, out of nowhere, and you spent it.
No it isn’t…
Having a credit amount to spend is not the same as having it in your pocket
It is, honest.
You need to get your head around modern macro-economics. It’s mind-bendingly scary.
But don’t confuse my comments with me thinking it is a good idea.
No it isn’t, and thinking that it is, is exactly the kernel of the problem.
Probably that’s what the poor lass that started the whole thread off, said to herself.
But - if I go and spend £1,000 of my own money, I owe nothing to anyone. The only difference is that I have less savings in my account.
If I spend £1,000 on my credit card, I owe 1k plus interest to the credit card company.
That is a HUGE difference.
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You are quite correct Anna… This is the reason for the post. The fact is this is not a subtle difference either…its a fundamental one.
Having credit available gives you the illusion of having the money. When you use credit you are actually buying a product. Make no mistake and that product costs. Using a credit card is just another product.
No. What happened was that my credit card company paid the money on my behalf, and they expect it back with their pound of flesh.
So the guy who got the money is no better off and no worse off than if I’d paid him out of my savings, the credit card company makes money and I lose money. Net net, what happened is that I’ve paid the credit card company for providing a service. Which to my mind is a waste of money, to me that service is not worth the cost, or the risk because if for some reason I fall on hard times and can’t repay, I’ll be backed up against a wall. Which wouldn’t have happened if I’d used my own money in the first place.
No, you are really not getting it.
One thing to understand is that banks and credit card companies do not need physical assets to back their loans - when they lend you money it is literally just an adjustment of the numbers on your account.
Yes, the interest you pay is the credit card company’s way of turning imaginary money that they create for you to spend into “real” money that they own.
But in the interim, they created money - I’ll say it again - out of thin air and you spent it.