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Posts Tagged ‘auto lease’

Auto Loans Top $1 Trillion, But Delinquencies on the Rise

Rising lease rates pose another potential problem.

by on Sep.07, 2016

August marked the second consecutive quarter where auto loans topped the $1 trillion mark.

If you’re making monthly payments on a new car, truck or crossover, you’re not alone. The long, record recovery of the U.S. automotive market has resulted in an all-time high in automotive debt – and is also leading to a rise in delinquency rates.

Between April 1 and June 30, Americans were paying off $1.027 trillion in auto loans, according to Experian Automotive, with a growing share of that due on new vehicle leases. At the same time, the number of buyers who have fallen 30 to 60 days behind on payments rose during the second quarter, Experian reported.

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The rise in delinquencies, the increasing dependence upon leasing and the fact that subprime and deep-subprime loans are rising has begun to worry many observers. Nonetheless, “The sky is not falling,” said Melinda Zabritski, the financial service firm’s senior director of automotive finance.

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American Car Buyers Paying Record Prices, Going Deeper Into Debt

Leasing soars as motorists look to hold costs down, says new study.

by on Mar.03, 2016

American motorists are paying more for their vehicles and borrowing more.

Even as U.S. car sales surge to record levels, a new study shows that American motorists are spending more than ever for their vehicles – with loan levels also reaching new records.

Searching for a way to offset rising prices, a growing number of buyers are turning to leasing, according to Experian Automotive which issued its quarterly “State of Automotive Financing” report on Thursday.

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“People shop for vehicles largely based on monthly price, and right now, average dollar amounts for new vehicle loans are soaring,” said Experian’s auto credit director Melinda Zabritski.

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Auto Buyers Loading Up on Loans as Monthly Payments Hit Record

Buyers also extending loans to record levels.

by on Jun.02, 2014

While sales continue to rebound, consumers are borrowing more to get into a new vehicle.

U.S. auto buyers are paying more than ever and stretching out their loans to record lengths in order to make their monthly payments, according to a new study.

Consumers are also turning to leases in record levels to help cut their costs, reveals the latest State of the Automotive Finance Market, from the data tracking firm Experian Automotive.

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“Consumers are really relying on financing as the price of new vehicles continues to move higher,” said Melinda Zabritski, Experian’s senior director of automotive credit. “As the cost of purchasing a new vehicle continues to rise, consumers clearly are stretching the loan term to help lower monthly payments, keeping them at a manageable level.”

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Leasing Regains its Appeal

With increased availability, over one in four American car buyers opt to lease.

by on Jun.28, 2013

Chevy has turned to super-low lease rates to help spur lagging Volt sales.

Looking for a quick way to cut the cost of buying a new car? You’re not alone, and that’s why a growing number of American motorists are opting to lease, rather than buy.

If that sounds a note of déjà vu, no surprise.  Leasing was big news for U.S. auto buyers in the years leading up to the economic crash.  For luxury brands, in particular, leasing accounted for as much as 80% of their sales. Then the bottom fell out and some makers, notably General Motors, pulled out of leasing entirely.

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As credit has loosened, auto buyers and automakers alike have rediscovered leasing’s advantages and the numbers are once again climbing – but so is the number of lease customers who find themselves wanting to get out of their vehicles sooner than expected, industry observers note.

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Are Subprime Buyers Saving the Auto Industry?

Loans up, defaults down.

by on Sep.07, 2012

More subprime buyers are finding loans again.

Last month’s unexpectedly strong automotive sales numbers run counter to most other recent U.S. economic trends and buoy hopes the nation will escape a double-dip recession.

While a variety of factors appear to be propping up automotive demand – despite earlier forecasts of a slowdown – one key reason for the sales surge appears to be increasing availability of financing, especially for so-called subprime buyers.

During the depths of the recession, when U.S. new car sales slipped to a crushing 10.5 million low in 2009, even those with the best credit scores found it difficult to get financing and leases all but vanished.  Now, however, the financing situation has turned around.

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In fact, there were more subprime loans written in the second quarter of 2012 than in the period before the nation’s economic collapse, according to financial tracking firm Experian Automotive.

But is that posing the risk of future problems down the line, especially if the continuing high jobless rate leads to higher loan defaults?

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