It appears as though a low credit score will no longer prevent Americans from buying or leasing a car as lending restrictions on automobiles has dramatically eased up, allowing more and more Americans, including those with less than perfect credit, to qualify for a car loan.
One of the reasons for the surge in car loans is that investors in the subprime auto market are buying up packaged securities at a quick rate. For whatever reason, these subprime auto loans are seen as less of a credit risk than in other situations. The lingering concern though that I have is what will happen to this entire class of subprime auto loans if the borrowers default, or when the securities get repackaged over and over again a la the mortgage crisis? Time will only tell but what we will see are more and more people who need help after defaulting on a car loan. If you find yourself being sued on a car loan deficiency or having collections action taken against you based on a default on a car loan, you should speak with a debt settlement attorney. The best thing we can do is avoid another situation like what led to the Great Recession by taking control of the debt at an individual level.
Kevin Fallon McCarthy
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- Rise of the Jumbo Student Loans - March 17, 2018
- Credit Card Market: Now and Then - February 23, 2018