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Car delinquencies up as housing crisis spreads to garage
By Susan Tompor
DETROIT FREE PRESS
Late sending in the money for the car? You're not alone.
Auto loan delinquencies are running at their highest levels in years -- and experts expect the late payments to rise more.
It's clear that the easy-money, easy-credit world of the past five years is taking its toll. The fallout is bound to put more stress on consumers, auto lenders, car companies and local economies.
Consumers can expect to find it tougher in the months ahead to get a car loan, especially if they have a bad credit history. If others aren't paying on time, lenders could be more cautious about making loans -- especially in light of mounting recession fears.
And auto sales could take it on the chin, as on-the-fringe borrowers find it more expensive to borrow.
"If fewer people can get credit, it means fewer vehicle sales," said Mark Zandi, chief economist and co founder of Moody's Economy.com Inc.
The uptick in auto loan delinquencies could be a sign that the difficulties in the housing market are taking a toll on the overall economy.
Auto delinquencies are part of the massive losses that lenders are likely to face in the fallout of U.S. credit woes.
Some estimate that the financial system could be looking at losses of more than $1 trillion combined from auto loans, credit cards, student loans, leveraged loans, corporate bonds and the subprime fallout.
Auto loans 30 days or more overdue made through dealers or third parties -- called indirect loans -- increased to 2.86 percent in the third quarter of 2007, up from 2.77 percent in the second quarter. Delinquencies for indirect auto loans now are at the highest levels in 16 years.
http://www.kentucky.com/101/story/308480.html
Car delinquencies up as housing crisis spreads to garage
By Susan Tompor
DETROIT FREE PRESS
Late sending in the money for the car? You're not alone.
Auto loan delinquencies are running at their highest levels in years -- and experts expect the late payments to rise more.
It's clear that the easy-money, easy-credit world of the past five years is taking its toll. The fallout is bound to put more stress on consumers, auto lenders, car companies and local economies.
Consumers can expect to find it tougher in the months ahead to get a car loan, especially if they have a bad credit history. If others aren't paying on time, lenders could be more cautious about making loans -- especially in light of mounting recession fears.
And auto sales could take it on the chin, as on-the-fringe borrowers find it more expensive to borrow.
"If fewer people can get credit, it means fewer vehicle sales," said Mark Zandi, chief economist and co founder of Moody's Economy.com Inc.
The uptick in auto loan delinquencies could be a sign that the difficulties in the housing market are taking a toll on the overall economy.
Auto delinquencies are part of the massive losses that lenders are likely to face in the fallout of U.S. credit woes.
Some estimate that the financial system could be looking at losses of more than $1 trillion combined from auto loans, credit cards, student loans, leveraged loans, corporate bonds and the subprime fallout.
Auto loans 30 days or more overdue made through dealers or third parties -- called indirect loans -- increased to 2.86 percent in the third quarter of 2007, up from 2.77 percent in the second quarter. Delinquencies for indirect auto loans now are at the highest levels in 16 years.
http://www.kentucky.com/101/story/308480.html