Twenty-Five Billion Dollars In Bad Auto Loans
Published: October 6th, 2008
Share
A study by Experion Automotive reported in Automotive News (sub) shows that nearly $25b in US auto loans are currently delinquent. In the second quarter of 2008, some 2.48 percent of all auto loans were 30 days past due according to the study, and .75 percent are 60 days past due. Both number are up noticeably compared to last year. All in all, there’s little in the way of encouraging news in the Experion report. Only the percentage of delinquent loans made to those with good credit scores (680+ on the 300-800 scales) is actually down, dipping to 56.5 percent compared to 61.1 percent last year. Well, that explains why auto loans are now considered “distressed assets.”
More by Edward Niedermeyer
Comments
Join the conversation
Akita, that statement is worded improperly. "The percentage of prime automotive loans (680 credit score and above) has fallen by 8 percent. In the second quarter, 56.5 percent of all open automotive loans were to people with prime credit, down from 61.1 percent in the second quarter of 2006."
$25B. That's a nice figure. Pure coincidence that it is the same amount as the auto bailout. Maybe we should just stick the cost of the bailout on those who bought cars they could not pay for instead of forcing all the taxpayers to bear the cost.
Are you saying that fewer people with good credit are delinquent? Or that fewer people with good credit are buying cars? Hmmm...I think I get it: 56% of all delinquent loans are from people with good credit. And that is an improvement over last year. Ah ha! I understand. So the people with good credit are doing a better job of paying bills, while those with bad credit are having a harder time. Whew! Haven't had to think this hard since the GMAT!
As someone that has always paid my bills on time (and I've even lost my job three times since 9/11), it makes me angry that I also get to bailout companies that shouldn't have made loans in the first place. This is where our country has gone; the real victims are getting screwed by all this. Years ago I worked with a stupid kid that bought a used sports car and was paying something like 18% interest. He then wrecked the car with no insurance, and lived in a motel with his pregnant girlfriend. At the time they had no groceries so I took pity on them and bought them some. So don't think I'm heartless, just tired of supporting bum companies and people. :)