Unlike a house, where it can take months or years to evict owners behind on their payments, some subprime lenders can now simply switch off a late borrower's car.
The auto industry in the US is doing great in 2014. According to our latest By The Numbers report, the Seasonally Adjusted Sales Rate climbed in August to about 17.5 million units, the highest figure since 2006. However, when you scratch underneath the positive surface, the rosy situation might not be as good as it seems. There continues to be a concern among insiders and analysts that while sales are strong now, they might not be sustainable. To keep financial results looking encouraging, some
It looks like Americans are feeling more confident about borrowing money again, at least when it comes to their cars. Credit reporting giant Equifax has released its latest National Consumer Credit Trends Report, and the data suggests that auto lending is booming in 2014.
The length of car loans in the US keeps on growing as more and more consumers look for ways to save money every month to pay off obligations and necessities. Extremely low interest rates and more durable automobiles have become key factors in driving these new longer-term car loans, which can last anywhere from six to 10 years.
We all remember the financial crisis that began several years back. At its core was a splurge of subprime lending for housing loans. The housing bubble burst, triggering a collapse of the mortgage-backed securities market. Apparently, those types of loans still exist in the automotive industry, and the market share for these types of "nonprime, subprime, and deep subprime," loans has grown 13.6 percent compared to the third quarter a year ago.
In a move that welcomes former pieces of General Motors back into the fold, GM Financial has reached a deal with Ally Financial, formerly GMAC, to buy a piece of the company's international operations. The $4.2 billion deal is for Ally's Latin America, Europe and China operations.
A study by Comerica Bank shows that the average purchase price of a new vehicle went up $300 in the second quarter versus the Q1, bringing the average transaction price to $26,300. The upward swing in prices came at a time when the average household income remained stagnant. The average family needs 22.1 weeks of median family income to pay for their new vehicle purchase, up .3 weeks from Q1. According to the study, higher transaction prices were slightly offset by lower financing rates, down to
Many consumers who buy a new car still owe money on the car they're trading in. The situation is usually handled by the dealer agreeing to pay off the old loan, the cost of which might be folded into the new car price. No problem a year ago, but it's a bigger issue now. With 5,000 dealers closing their doors last year, some of those old loans aren't getting paid off. Consumers who bought new cars are finding out they're still on the hook for the old car loans, and in some cases, if another consu
Last week Congress signed a bill that frees up $25 billion in low interest loans for all automakers (including non-domestics if they plan to spend the money on green tech) and suppliers that spend money in the U.S. to develop green technologies. That was a big deal for Detroit automakers struggling to stay afloat during an abominable automotive downturn.