Auto Loan Delinquencies on the Rise
Apr 2nd, 2008 by jsveva
The number of American’s that are more than two car loan payments behind is at a 10 year high. Increased pressures on the consumer to meet other rising financial obligations have taken a toll and forced many of them to prioritize what they pay and when they pay it based on their own personal cash flow crisis. This in fact has prompted many consumers to look for a quick fix to their cash flow ills by trading out of their current vehicle and into a smaller less expense and more fuel efficient vehicle. The problem however is that the demand for many of the vehicles these consumers are looking to trade out of is virtually non-existent. This adversely affects what the dealer is willing to offer the consumer in trade value. What winds up happening is that in order for the consumer to trade out of their existing vehicle they most likely will have to come up with additional cash at the time of the transaction. Another option would be for them to have their dealer roll the negative equity from their trade into their new vehicle loan or lease payment. In the end, rather than a quick fix the consumer is most likely going to find themselves in an even deeper hole as their new monthly car payment is most likely going to be higher than there old payment had been.