Under current law, a customer can buy a car on higher purchase and then hand it back without further liability if they have already paid 50% to the finance company.
However, car depreciation and abuse of this system means that motor finance companies are facing massive losses.
James Kelsey, at the motor trade sector of national accountants UHY Hacker Young, agrees that the system needs to be changed:
"Abuse of the rules has increased the cost of this type of finance for the customer and the values of vehicles are being pushed down when it comes to re-selling the cars when they're returned. Everyone loses out."