ASIC investigation alleges lack of audits and checks in some parts of car finance sector

A review of Australia's car finance sector has alleged a lack of regular audits and checks by some lenders.

The Australian Securities and Investments Commission (ASIC) review comes after an increase in complaints about car finance costs and reports from consumer advocates about excessive costs as part of finance arrangements.

Most lenders ASIC examined relied on intermediaries, such as brokers and dealerships, to arrange car finance.

The review found significant inconsistencies in some loan costs.

"We saw instances of loan establishment fees as high as $9000 on a loan of $49,000," ASIC Commissioner Alan Kirkland said.

"We also found that almost half of all consumers who defaulted on their car finance repayments did so within the first six months of the loan."

"And of vehicles that