Even with all the new laws and by laws trying to govern the affordability aspect of clients. These laws are set up to prevent the public from over extending there finances. Its goal is to keep people with in an affordability range and not over indebted.
“Overextended” transitive verb. : to extend or expand beyond a safe or reasonable point especially : to commit (oneself) financially beyond what can be paid.
Whether its a new car, a house or accounts in general. All creditors have the responsibility to check whether a client can afford the item or account within certain parameters. In most cases the various sales agents are under pressure to make target and even more so to make commission.
A good example is upselling a newer car to client that, The oversight is always the insurance premium. Even if a new car falls within a clients affordability. The points are always an oversight and in most circumstances can push the client out of affordability and into over extended
- Insurance costs
- Maintenance and upkeep
- wear and tare
- Motor excess
Clients should always be wary of the follow up costs, this has a habbit of rearing its head later down the line.