A report from Edmunds put the average price of a used car in 2014 at $16,800, which is a record, and a 5.7-percent increase from 2013. It also found 1-year-old and 4-year-old cars showed gains at or near the average, while some vintages showed gains of up to 18.4 percent.
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 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.
Automotive News reports Chrysler owes some of its recent sales success to a resurgence of subprime loans. Chrysler has a history of working with customers burdened with questionable finance histories, and lenders have begun to loosen credit restrictions. As a result, 29 out of every 100 auto loans for new Chrysler models went to buyers with a credit score under 680 in the first quarter of this year. Experian Automotive classifies loans tied to that credit score as subprime. What's more, nearly 2
Subprime lending is on the rise throughout the auto industry, up 11 percent from the first quarter of last year. From the perspective of many auto dealers, that's a good thing.
We've decided to stop trying to guess what General Motors will do before its IPO – which might come next month or later this year or early next year. What we do know is that GM has wanted to secure a captive finance arm before an IPO, a process that looked unlikely, then fell off the radar entirely, and then, BAM!, GM whips out $3.5 billion to buy AmeriCredit. That has made at least one senator do a double-take, asking whether spending that much money and loaning to the subprime market is
In a word, yes. The Detroit News reports that General Motors is looking to find a way to tap into the subprime lending market that accounts for 16 percent of the overall car-buying market. There is, after all, plenty of pressure to sell more vehicles to enhance the company's value leading up to its initial stock sale. But while GM would like to strategically go after subprime borrowers, there is one significant roadblock in the way; Ally Financial. The financing firm, which was GMAC until The Ge
GMAC has loosened the purse strings, with General Motors' finance arm allocating $6 billion for auto loans for the next 60 days. The 60 day mark is critical to GM, as it is the government's drop-dead date to satisfy Auto Task Force viability requirements. The cash infusion will help struggling dealers with dried up credit channels, but it will also be used to finance cars and trucks to people with credit scores under 620. The under 620 crowd is referred to as subprime, a term that is now synonym