Tag: Debt

By on May 22, 2020

Hertz Global Holdings Inc. has been in discussions with creditors in the hopes of making a deal that addresses its missed debt payments and gives the company further leeway. Rental agencies are struggling, with Hertz in the roughest shape of all. All thanks to a certain virus, business has dried up, and Hertz finds itself  sitting on a pile of quickly depreciating cars it cannot afford to replace. The company’s stock also plummeted at the end of February — going from $20.29 per share to today’s $2.86.

The rental agency has until Friday to negotiate an extended forbearance agreement or drop $400 million in lease payments, but news has surfaced that lenders think Hertz declaring bankruptcy may be just as good a solution.  (Read More…)

By on May 5, 2020

Lenders are cutting Hertz a break by affording the company an extended grace period, giving it a chance to cope with its debt. Last we checked on the rental agency, things weren’t going well. With governments cracking down on movement amid the coronavirus pandemic, no one is going anywhere — and the Hertz’s bottom line showcases exactly how bad this has been for business. Hertz had to bring in economic advisors to help the business manage its swiftly mounting debt load as it discussed how to avoid bankruptcy.

Similarly hit by the pandemic, airlines got a multi-billion-dollar bailout. Agencies like Hertz, Avis, and Enterprise, however, have had to seek their aid elsewhere, all the while hoping the U.S. Treasury Department answers their plea. Thus far, it’s been crickets.

Car renters are confronting a harrowing reality. They need to refresh their gigantic fleets in a period where no one can turn a profit, there’s little promise of a swift recovery, and used car values are cratering. Hertz started laying off workers in March as customers evaporated. By the end of April, it also announced it was defaulting on lease payments related to its fleet. With creditors rarely unclear about when they want their money, things were looking grim.  (Read More…)

By on April 22, 2019

For roughly the last decade, we’ve heard the motoring media bemoan Millennials as the generation that snubbed driving. Their inability to find and hold jobs that paid as well as their parents’ did at the same stages of life, combined with elevated costs of living and crippling student debt load, negatively impacted their purchasing power. Still, this generation might be just the tip of an iceberg the industry’s about to careen into.

As it turns out, Generation Z might even be less interested in cars. In addition to facing similar financial constraints as their older peers, most of them aren’t even bothering to get a driver’s license.  (Read More…)

By on March 11, 2019

It looks as though more parents are increasingly paying for the transportation needs of their (sometimes very old) children.

Thanks largely to abandoning the important job of parenthood, a Bank of America survey a discovered small portion of adults between age 23 and 37 are now able to put away legitimate savings. However, the prevalence of student debt, low-paying jobs, and an increased cost of living has left many to continue scrimping and saving. In fact, most Millennials under 24  had less than $1,000 in their savings accounts, with nearly half having no savings at all. The former was also true for older members of the same generation. On average, it’s presumed that Millennials are earning 20 percent less than their Boomer parents at the same stage in life — despite being better educated, overall.

That’s causing future issues for the automotive industry. When Bankrate surveyed Americans to get their financial priorities on record last month, 23 percent of respondents specified that student-loan debt directly influenced their decision to delay purchasing a new car. Considering both monthly payments are frequently set to the tune of hundreds of dollars, that would make a lot sense.  (Read More…)

By on February 4, 2019

2019 Ram 3500 Heavy Duty Limited Crew Cab Dually with RV trailer

Image, for a moment, that the trailer pictured above is filled with debt. It’s a good representation of the average new vehicle purchase.

Looking at last month’s stats, you’d have to go back to the safe and comfortable pre-Twitter era to find a January in which fewer people got their hands on a zero percent new vehicle loan. January 2006, to be exact.

Last month wasn’t just a departure from a decade past — the car buying landscape appeared quite different just a year ago, all thanks to rising interest rates and the perpetual upward creep of new car pricing. Data from Edmunds helps break down the differences.

Suffice it to say you’re likely paying a lot more, but you’re spreading it out over a longer term. (Read More…)

By on March 29, 2017

keys car sale

A third of all subprime car loans are now being categorized into the ominous-sounding “deep subprime” group. The designation has become progressively more inclusive since America clawed its way out of the recession and now accounts for 32.5 percent of all high-risk loans — up from just 5.1 percent in 2010.

While consumers have fallen behind on most subprime auto loans, the deep classification is responsible for the most serious cases of nonpayment. Delinquencies surpassing 60-day periods have tripled since 2012 and indicate little sign of stabilizing.  (Read More…)

By on August 9, 2016

Couple buying cat Courtesy chronicleherald.ca

With memories of the 2008 financial meltdown still fresh, American consumers aren’t borrowing wildly anymore — except when it comes to cars and credit card purchases.

As of the end of June, car buyers racked up the highest auto loan debt in U.S. history — $1.1 trillion, according to a quarterly report from the Federal Reserve Bank of New York. Also on the rise? Credit risk. (Read More…)

By on April 9, 2016

Jeep Wranglers Coming Down The Line In Toledo

A group of Jeep fans wants Fiat Chrysler Automobiles CEO Sergio Marchionne to make a Sophie’s Choice-style decision to save their beloved offroader.

To avoid the destruction of the storied brand at the hands of its parent company, FCA must cast it loose, the group states in a strongly-worded Change.org petition.

“As owners and fans of Jeep vehicles, we are calling on Fiat Chrysler Automobiles to separate Jeep from FCA’s stable of failing brands and debt,” the petition states. “We urge FCA to execute a spinoff to save Jeep.”

(Read More…)

By on March 17, 2016

2016 Ford Explorer

Millennials are buying Ford SUVs like it’s going out of style, no doubt dismaying the friends who like to lecture people about their lifestyle on Facebook.

That, Chevrolet offers a voyeur package for its full-side pickup, Fiat Chrysler Automobiles grabs a stack of cash with both hands, Mercedes-Benz gives its midsize SUV the AMG treatment, and two more automakers eye the Formula E grid … after the break!

(Read More…)

By on October 12, 2015

01 vw badge

Standard & Poor’s downgraded Volkswagen’s rating on long-term debt Monday, and said the company’s diesel scandal indicates poor management. The financial agency further warned that its debt rating could be cut further if the automaker doesn’t immediately address the deepening scandal, Bloomberg reported (via Automotive News).

“VW has demonstrated material deficiencies in its management and governance and general risk-management framework,” Alex Herbert, a London-based analyst at S&P, said according to Bloomberg. “VW’s internal controls have been shown to be inadequate in preventing or identifying alleged illegal behavior.” Further damage and other violations “represents a significant reputational and financial risk.”

(Read More…)

By on June 2, 2015

 

Civic_Pride_Delche

Baby Don’t Hurt Me. (photo courtesy: OP)

Chris writes:

Hello Sajeev,

Like many of the people who write to you, I am having trouble deciding if I should keep my current car or trade it in for a new one.

I currently own a 2010 Honda Civic EX-L with 140,000 miles. It has been the single most reliable car I have ever owned. I keep it meticulously maintained and generally change its oil every 6 to 8 weeks. Otherwise, I have only paid for a set of brakes and new tires.

A week ago, I test drove a brand new Honda Accord Touring and fell in love. The dealership has offered me an excellent deal that includes trading in my Civic. My dilemma is that I feel an allegiance to the Civic. The car has the soul of a toaster and is not exciting to drive, but like a trusty horse, it gets me everywhere I want to go without any complaints. The Civic will eventually need repairs as it approaches 200K but I feel like I would be letting it down by trading it away. On the other hand, I can easily afford the payments for the Accord, but I generally try to avoid debt.

What should I do Sajeev? Should I cut the Civic loose and replace it or keep on driving until she can carry me no more?

(Read More…)

By on August 19, 2014

saab-9-3-aero-sedan-my14-09-1

Remember when Saab’s new parent company was close to being taken to court and forced to declare bankruptcy by one of its suppliers? New information may have helped changed course.

(Read More…)

By on January 30, 2014

FCA - Fiat Chrysler Automobiles

The American half of the newly dubbed Fiat Chrysler Automobiles reported a net income of $1.6 billion in Q4 2013, the majority of which came from a one-time tax gain of $962 million.

(Read More…)

By on January 10, 2014

123rf

 

I just got a job that involves a fair amount of driving and I am looking to spend about 11-13k on a car that is fun to drive but at the same time practical and reliable.

(Read More…)

By on May 23, 2012

Seth-Gold-Hardcore-Pawn-Ford Images: Ford Motor Co. & Tru-TVIt’s almost a cliche. Someone mentions the $23.5 loan package that Ford Motor Company presciently took out in 2006, a loan that allowed Ford to develop new products and survive the economic meltdown and credit crunch of 2008 while its crosstown rivals were reduced to begging Washington for a bailout, and almost invariably they will bring up the fact that Ford pawned everything including their “blue oval”. Well, Ford once again owns the famous cerulean logo free and clear. Now that Moody’s has joined Fitch Ratings in restoring the rating on Ford’s debt to investment grade from junk status, the collateral that Ford put up for the loan, which included the logo, Ford’s “glass house” headquarters, several factories, and intellectual property including the Mustang and F-150 trademarks, is no longer security on that debt, per the terms of the loan.

(Read More…)

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