Repo Man: Back In Action!
SECOND QUARTER REPOSSESSIONS SURGE 70 PERCENT … Repossessions of automobiles are on the rise iYou must Subscribe or log in to read the rest of this content.
SECOND QUARTER REPOSSESSIONS SURGE 70 PERCENT … Repossessions of automobiles are on the rise iYou must Subscribe or log in to read the rest of this content.
17 comments
Bubblicious, and to think that Sandi Morales is touting this as a leg of Nikki’s “recovery” in SC…lmao!
Only a fool would make payments on a brand new automobile. Sticker price compared to what you actually end up paying in the long run is bad judgment.
Haven’t bought a “new” car since 1992. Paid cash for the last three, got the leather seats and all that jazz but the little extra I pay in maintenance is a fraction of a $470 a month car payment.
Got you beat. The last new truck I bought was 1981. The last new car I bought was 1972. I have found it is much better to let someone else pay that 30 to 50% off the top. Also the second and third 100,000 miles are the cheapest driving you can do. Maintaining a vehicle is the key making them last. My last trade was a 1995 Suburban with 276,000 miles on it. It was starting to get rickedy so I traded it for an Expedition with 169,000. Had to go to N.J. and W.Va. .So far I have put a new alternator on the Ford. When I see the prices for new cars I can’t believe more people don’t do like me.
All these auto dealers are advertising about how they got some poor clod who makes jack and has a credit score in the 500s into some new hunk of junk economy car from a car company that sucks ass just amazes me. Chances are these people already own a beater car that’s on its last leg and are desperate to find something, preferably new. I can only imagine they don’t do their research and get ripped off on the price of the car alone, and of course the interest will be huge.
Car companies need to cut the crap and start selling direct.
Just a shame you liberals/socialists don’t want poor black/white folks to have a vehicle so they can work.
Ferguson should show you by continuing to keep the ‘base’ of the Democrat Party enslaved to a perpetual welfare system that denies them jobs and transportation, is a formula for hopelessness and violence.
So you like our government printing up money and handing it to banks so they can loan poor people that can’t afford cars money until they default?
You’re not so far from the Dems in philosophy Sandi.
If the govt. sent out fliers to the people of Ferguson saying : We have your picture, your name and your address, If you are seen on the street after 10 pm your welfare an food stamps will be terminated, I’ll bet it would look like a ghost town.
Good ol’ subprime lending never died, it just moved on to car loans. Hopefully this shit will stop before it hits the fan, again.
http://www.washingtonpost.com/news/business/wp/2014/08/19/moodys-says-lenders-are-backing-off-subprime-auto-loans/
Except the last financial crisis involved $100k + loans on assets that take years to repossess. Car loans are $20k on average and you can repo it after one missed payment. Lot less danger of car loans creating another financial crisis.
There’s still losses though. The costs of the repossession and whatever loss of value the car has suffered versus what is still owed on it. It isn’t enough to topple huge banks but it is enough to be a kick in the side to the economy.
Just pulling numbers out of my ass, a $20k car loan might cover an $18k car with a $2k extended warranty. If they default after a year the car may only be worth $14k-$15k at best, have to worry about dings/scratches on the outside or stains/tears on the inside too that might drop it even more. The payments they made over that time don’t cover the loss of value. This multiplied by several thousands isn’t going to be pretty.
Also, those several thousand people are going to be without a car all of a sudden, which means no ride to work or wherever else they need to go. They wasted whatever down payment and trade in on a car they honestly shouldn’t have gotten a loan for, and now, when they go to find one they -would- have been able to afford, they won’t have a trade in or down payment, and their credit rating will be even lower.
But hey, as long as the dealer is sitting pretty, right?
Meh, banks have calculated the risk of loss. The higher interest rates they receive from other sub prime purchasers normally make up the marginal loss on each car repossessed. This is how Aarons has stayed in business so long renting furniture to people with no credit.
It definitely sucks for the people buying the cars though. They’d be better off if they’d been declined from the beginning and bought a cheaper car.
Most of the major players in sub-prime auto loan are using taxpayer money to place their bets on who will/won’t pay….
Aside from the asset distortions and crony capitalism, no one knows if it will yet again lead to privatization of profits or socialization of losses even if poor people are getting suckered into buying cars they can’t afford, shades of the CRA even if the numbers are smaller.
What about cash for clunkers, and GM being owned by the government and Obama’s Chevy Volt? I thought that was going to solve all our vehicle problems…Did that not work…???
GM is history !!
Here’s the quote from the Experian press release:
“The overall automotive repossession rate saw a significant increase in the second quarter of 2014, jumping more than 70 percent to 0.62 percent from a year earlier.”
Another:
“Finance companies were the only lender type to see a year-over-year increase in repossession rates, rising from 1.13 percent in Q2 2013 to 2.75 percent in Q2 2014.”
And another quote:
“The rosy glow of perfect payment performance in the automotive space is beginning to tarnish,” said Melinda Zabritski, senior director of automotive finance for Experian Automotive. “We’re starting to see a slight uptick in the number of consumers struggling to make their automotive payments on time; however, we have to keep in mind that these percentages are still extremely low. We’ll want to keep an eye on how consumers pay their bills in the coming months, as it may dictate the availability of credit in the future.”
And here’s the address:
http://press.experian.com/United-States/Press-Release/experian-automotive-outstanding-auto-loan-balances-reach-record-high.aspx
Damn, guys. You fellows need to get out more. Driving a new car is a ball. Even Fords are stylish and are reliable nowadays. Plus the mileage is unbelievable.