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


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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. 

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  • 1 month later...
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.

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