More Americans Are Getting Auto Loans That Exceed the Worth of Their Cars

[hegemony]

More Americans Are Getting Auto Loans That Exceed the Worth of Their Cars

[MarvBear]

Consumers have been doing that for decades.  Wonder why that makes the news now.

[centex]

11 hours ago, MarvBear said:

Consumers have been doing that for decades.  Wonder why that makes the news now.

Its all about creating a victim class.  That drives the clicks which is where the sites generate their income, facts be damned.

[hdporter]

I'm taking the article at face value .... and the suggestion is that these loans typically will still be under water even after 2 years of payments.  That's a lot of added risk for banks to be taking on.

 

Yeah, it's been a trend for some time to roll in some after market work and things like extended warranties into financing.  But I can't fathom how a stat of average lending at 125% of value has come into play.  It's simply unfathomable in my mind.  Fool me, for putting 10% down on a 1.9% APR mfr financing.

 

The biggest mystery for me is why lenders are complicit in such bogus financing. 

[centex]

What is sad is how many people miss the reality that even small amounts like $50-100 additional per payment can shorten the time they are underwater.  

[IndyPoolPlayer]

On 6/21/2023 at 10:14 PM, hdporter said:

The biggest mystery for me is why lenders are complicit in such bogus financing. 

 

If you're referring to captives, I think you can answer your own question. Captives move the metal for the manufacturer. Third party lenders - well keeping up with the captives. Granted what I read on CDG there's lenders almost weekly bailing out of purchaser financing market or floor financing market or both.