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Auto loan delinquencies in the fourth quarter hit their highest level since the financial crisis, a report out Thursday revealed.
About $23.27 billion in loans were 30 days or more late as of Dec. 31 — a whopping 14 percent increase from the year earlier and the most since the $23.46 billion in the third quarter of 2008, according to the New York Federal Reserve.
Delinquencies have moved up as the credit quality of the loans has deteriorated and the length of the auto loans has increased — sometimes to 84 months. [...] Delinquencies are the canary in the coal mine when it comes to losses for carmakers.
[...] The average monthly car payment in the fourth quarter rose above $500 for the first time, according to the credit-rating agency Experian.
(Score: 2) by TheRaven on Sunday February 19 2017, @12:42PM
*There's always an edge case, like the physically disabled person living with their economically disadvantaged parents out in the country 40km from the job they just got. OK, maybe they should make car payments.
There are some other edge cases. The general rule should be not to borrow money to finance consumption. If you can only buy a car if you take a loan, and you absolutely need a car to get a better-paying job (or any job at all), by all means borrow the car, because you're borrowing money to increase your earning ability. The same is true with buying a house or any other appreciating asset, as you say, as long as the appreciation is greater than the interest (or, in the case of a house, as long as the appreciation plus whatever you'd be paying in rent is greater than the interest). The other corner case is for interest-free loans. Always take these if you're able to pay the full price up front, because even if the money is in a current account earning a negligible amount of interest, it's still more than you'd get by not earning that amount of interest.
sudo mod me up