Tag: Loans

By on May 31, 2017

Bright colors and lowered prices try to attract customers to a California used car lot, Image: Bike Tourist/Bigstock.com

The low, low monthly payments offered by spreading the cost of a new or used vehicle across a vast gulf of time is certainly an attractive one, even though the practice is fraught with hidden danger.

For U.S. car buyers, it has also become a very popular one, with data showing just how many people have decided to embrace a 73- to 84-month payment plan. Not only are their spending habits changing, they’re also changing their lender. (Read More…)

By on March 1, 2017

oldsmobile-ciera-coupe

A bill for the assembly of two decades-old models — one from a defunct marque — will come due on April 1. And unlike much of the debts written off during General Motors’ bankruptcy, a major subsidiary now has to pay this chunk back.

The money, $220 million in all, was handed to GM Canada back in 1987 to save the Montreal-area Sainte-Thérèse Assembly plant. GM Canada used that bankroll to build the stunningly sexy Chevrolet Celebrity and Oldsmobile Cutlass Ciera. It later cranked out the last Pontiac Firebirds and fourth-generation Chevrolet Camaros.

The thing about 30-year interest-free loans is that someone eventually comes to collect. (Read More…)

By on September 16, 2016

2016 Nissan Altima SR

Dodge. Nissan. Kia. Mitsubishi. Ever wonder how any cars from these makes end up getting sold?

While there are certainly cars from these brands that attract the higher end of the automotive consumer marketplace (Hellcat, anyone?), the vast majority of the customers who end up in a car from one of these brands are in them for one reason, and one reason alone: they’ve got subprime credit. And they’re not alone.

In fact, over half of the American public now has subprime credit, and there’s no sign that it’s getting better any time soon. As a result, most customers are just walking into a dealership hoping to be approved for a loan. Instead of being in a position of power when it comes to negotiation, they’re in a position of weakness.

For dealers, this is great news. For consumers, it’s awful.

(Read More…)

By on August 27, 2015

Signing his life and wallet away for the next six or so years with a long-term auto loan agreement

Next year may not be as kind to new car buyers with bad credit.

If you’ve been paying attention to the market recently, it’s been an up-and-down ride for the past few days. Market volatility is just one of the indicators that the Federal Reserve may be considering a hike to the federal funds rate (probably not this year, though), which would impact borrowing rates in a record-setting year for the auto-loan business. 

“It has the potential to impact auto loans, any rate increase certainly can,” said Melinda Zabritski, senior director for Automotive Finance for Experian. “The rate depends on so many other factors in the market … (A rate increase is) at some point, likely. But there’s not a strong chance that it will go up this year.”

Rates for loans have largely stayed the same since 2008, when interest rates were lowered to spur lending after the recession. Many of the low-rates today haven’t changed and automakers such as Subaru have offered interest-free loans on some of their cars.

(Read More…)

By on March 13, 2015

72months

Faced with less disposable income, higher taxes and more expensive vehicles (in most cases), loan terms in the Canadian market has gradually shifted to one where bi-weekly and even weekly payments have become the advertised norm, with 72, 84 and 96 month loans appearing as a fixture of the new and used vehicle marketplace. And with household debt levels reaching record heights in Canada, the chart above should be deeply concerning.

(Read More…)

By on December 9, 2014

 

Credit Unions will now be able to follow up with applicants who were unable to procure loans, and see if they pursued credit at other institutions, thanks to a new service from Equifax.

(Read More…)

By on September 18, 2014

cfpb-consumer-financial-protection-bureau

New rules being announced by the Consumer Financial Protection Bureau would mean that the captive finance arms would be subject to oversight from the CFPB.

(Read More…)

By on August 19, 2014

550x341x2014-Honda-Accord-Hybrid-Exterior-001-550x341.jpg.pagespeed.ic.J2pn5ewFI-

In this year’s red hot new car market, the Honda Accord and CR-V have apparently captured the top spot in both new car and SUV retail sales through the first half of 2014, according to Polk registration data. But John Mendel, Honda’s head of sales, had some pointed words for the industry as a whole, and the state of the American auto market.

(Read More…)

By on July 3, 2014

20140701_auto2

The Office of the Comptroller of the Currency, a government entity that regulates and supervises banks, is sounding the alarm regarding risks related to auto loans.

(Read More…)

By on June 19, 2014

logo_toyota_credit_a

OEM captive financing arms are increasing their share of new car loans, with banks resorting to underwriting riskier loans in the used car market and to less credit-worthy buyers.

(Read More…)

By on June 2, 2014

MK-CC261A_CarAd_G_20130408211241

The easy-credit train keeps on rolling in the auto world, with credit rating agency Experian reporting new records in key auto finance metrics.

(Read More…)

By on March 24, 2014

SC06_Aston_Martin_Vanquish_green

One year ago, we reported on the alarming trend of 97 month loans for new car sales. It turns out that these have now been supplanted by a substantially longer term. Say hello to the 144 month loan.

(Read More…)

By on October 14, 2013

Subprime-Auto-Lenders

Months after TTAC started to relentlessly bleat about the glut of money flowing into the auto loan sector, the mainstream media is finally taking notice. Automotive News is finally expressing some worry over the factors that we’ve been discussing for some time: car loan terms are getting longer (to help keep payments low), subprime lending is increasing and an expected rise in interest rates could put an end to the new car market’s exuberant performance.

(Read More…)

By on October 9, 2013

kevin_williams.jpg.size.xxlarge.letterbox

GM Canada’s CEO is expressing apprehension over the way cheap auto loans are fueling vehicle sales in Canada.

(Read More…)

By on September 25, 2013

7d4a7430404638720165ab399f429b03

While the engine behind the exceptional growth in new car sales is a hotly debated topic, leasing is proving to be an undeniable catalyst behind this year’s impressive new car sales numbers. Through June of this year, leasing accounted for 25.7 percent of new car sales, versus 22.2 percent in 2012.  A decade ago, that number stood at just 17.5 percent.

(Read More…)

Recent Comments

  • mopar4wd: Their called predicted reliability for a reason it’s based on how well prior models have done. That...
  • PrincipalDan: Maybe if the kicked in door related to Jose being caught being not such a good family man. ;-)
  • FreedMike: All he needs now is a lock on the microwave burrito market, and he’ll be a stoner magnate.
  • Roberto Esponja: For some reason, I’m thinking this vehicle would be perfect for a Crabspirits or CoreyDL...
  • JimZ: “I’m sure how the client is being hosed.” I think some people here are under the impression that...

New Car Research

Get a Free Dealer Quote

Staff

  • Contributors

  • Matthew Guy, Canada
  • Ronnie Schreiber, United States
  • Bozi Tatarevic, United States
  • Chris Tonn, United States
  • Corey Lewis, United States
  • Mark Baruth, United States
  • Moderators

  • Adam Tonge, United States
  • Corey Lewis, United States