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Old 02-16-2019, 06:41 AM   #1
AVANTI R5
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Default Over 7 Million Americans Are Over 90 Days Late On Their Car Loans

https://forums.nasioc.com/forums/new...ewthread&f=139


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Serious auto delinquencies reach highest level since 2012



After the percentage of seriously delinquent auto loans reached its highest level since March 2012, the New York Fed is keeping a close eye on a recent uptick in auto loan originations to borrowers with subprime credit and an increase in delinquencies among younger buyers.

The central bank on Tuesday released its Household Debt and Credit Report for the fourth quarter of 2018. The subprime origination boost and delinquency rise are a couple of potential problem areas in the largely positive report that said auto loans were in "high gear" on average.

Overall, the 90-day delinquency rate represented 4.47 percent of the outstanding balance in the fourth quarter of 2018, up from 4.05 percent a year ago and the highest since 4.55 percent in the first quarter of 2012, the New York Fed said.

"Although rising overall delinquency rates remain below 2010 peak levels, there were over 7 million Americans with auto loans that were 90 or more days delinquent at the end of 2018," the New York Fed said in a blog.

Still, the auto loan balance -- at $1.3 trillion in the fourth quarter -- had surged 79 percent from the fourth quarter of 2010, so the more than 7 million borrowers whose loans were 90 days or more delinquent at the end of last year represented more accounts but a smaller share of the total loan balance.

Total auto originations, including loans and leases, new and used vehicles, totaled $144.3 billion in the fourth quarter, an increase of 5.2 percent from a year ago.

The biggest percentage gainers in originations were customers in the New York Fed's highest credit-score bracket of 760 or higher, at $47.7 billion, up 8.2 percent from a year ago. Customers with subprime credit, defined as below 620, accounted for $27.9 billion in originations, up 7.3 percent.

It was the second straight quarter subprime originations increased, following nine consecutive quarters of year-over-year monthly decreases. That streak started in the second quarter of 2016, according to New York Fed statistics.

The rate of accounts transitioning into 90-day delinquency status was higher than average for borrowers under age 30. The New York Fed said that 90-day delinquencies among borrowers under 30 saw a "sharp worsening" from 2014 to 2016, and they have remained high since, relative to the rest of the market. For the fourth quarter, it was 4.04 percent, vs. an average of 2.36 percent for all ages combined.

Delinquencies have also "crept up slowly over time" for borrowers older than 30, the New York Fed said, but not as far or as fast as for under-30 borrowers.

The New York Fed summarized in its blog: "The substantial and growing number of distressed borrowers suggests that not all Americans have benefited from the strong labor market and warrants continued monitoring and analysis of this sector."
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Old 02-16-2019, 08:54 AM   #2
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Just paid mine off 2.5 years early, skeet skeet! Humble brag. Seriously though, marketing in the US is extremely influential and people get approved for just about anything. All car loans should come with a mandatory budgeting class.
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Old 02-16-2019, 11:04 AM   #3
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There's a giant blinking recession sign in the sky that everyone is ignoring, like they always do.
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Old 02-16-2019, 11:13 AM   #4
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They call it "The everything Bubble"
and another 2008 may be at hand. Think still a couple years so be out of debt when it hits cause nothing cured back then. masses retiring people leaving high tax states, pensions in demand but never fully funded.So much debt kicjed into Gen X and MLs future soon due. Be an interesting upcoming 10 years
on the good side, bargain used cars and homes if you have cash. Buys of a lifetime

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Old 02-16-2019, 06:10 PM   #5
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So less delinquencies than in 2010 with 79% more loans than in 2010? Meh
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Old 02-17-2019, 03:20 PM   #6
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Only option is to take loans out to 96 months.....

I know banks will routinely carry over negative equity into the next car. Work with a guy who had to have a new Taco...up fitted by the dealer with aftermarket parts.

He rolled over negative equity and a few thousand worth of aftermarket parts to drive one of the most expensive Taco's one has ever seen.

I'm sure he's not the only case out there.
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Old 02-17-2019, 09:43 PM   #7
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Originally Posted by [email protected] View Post
Only option is to take loans out to 96 months.....

I know banks will routinely carry over negative equity into the next car. Work with a guy who had to have a new Taco...up fitted by the dealer with aftermarket parts.

He rolled over negative equity and a few thousand worth of aftermarket parts to drive one of the most expensive Taco's one has ever seen.

I'm sure he's not the only case out there.
At least the taco retain value well while he pays it down to market value over the next 84 month.

****ing bafoon.
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Old 02-18-2019, 07:17 PM   #8
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Quote:
Originally Posted by Dex View Post
Just paid mine off 2.5 years early, skeet skeet! Humble brag. Seriously though, marketing in the US is extremely influential and people get approved for just about anything. All car loans should come with a mandatory budgeting class.
What was your loan rate? Paying off a 0.9% interest loan early is nothing to brag about; in fact, doing so could easily be considered foolish.
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Old 02-18-2019, 09:35 PM   #9
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Agreed. Somewhat. Paying any interest is a cost that you should try to get out of. But something like 0%, where you’re basically borrowing at no cost, you should take your time if you can.
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Old 02-18-2019, 09:49 PM   #10
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Agreed. Somewhat. Paying any interest is a cost that you should try to get out of. But something like 0%, where youíre borrowing at no cost, you should take your time if you can.
If you can borrow money at a lower interest rate than an investment typically returns, you should not pay off the loan. Would you take money out of your 401k which has typically returned >7% per year to pay off your 3.5% mortgage?
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Old 02-18-2019, 10:17 PM   #11
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If you can borrow money at a lower interest rate than an investment typically returns, you should not pay off the loan. Would you take money out of your 401k which has typically returned >7% per year to pay off your 3.5% mortgage?
Here's the thing, most people have dick for nothing in the way of investments but if they did, I would agree with your post. Alternatively, some people who do invest also do not want to have to incur interest on a depreciating asset. I paid my truck off after a year or so of owning it at the expense of selling some stock. The payment I no longer have to make has gone back into investments and are out pacing.
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Old 02-18-2019, 10:45 PM   #12
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Originally Posted by dcsti View Post
If you can borrow money at a lower interest rate than an investment typically returns, you should not pay off the loan. Would you take money out of your 401k which has typically returned >7% per year to pay off your 3.5% mortgage?
It's a guaranteed 3.5% return (less but close enough), vs a risky 7% gain.

Now that Trump has taken away the mortgage interest deducton from a lot of people (by making itemizing less attractive), you could see more of this.
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Old 02-19-2019, 12:06 AM   #13
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Originally Posted by VarmintCong View Post
It's a guaranteed 3.5% return (less but close enough), vs a risky 7% gain.

Now that Trump has taken away the mortgage interest deducton from a lot of people (by making itemizing less attractive), you could see more of this.
The average is 7%, not every year at 7%. Plus, If you get an employer match or even 50% match, youíd be better off putting the money towards 401k than paying it off.
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Old 02-19-2019, 11:19 AM   #14
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The lenders are every bit to blame as the lendees. They allow these dumbasses to bury themselves in debt with negative equity while they buy a new car every year. I don't feel sympathy for anyone.

My 4Runner is about paid off with only 52k miles on it and my GTI payment is incredibly manageable.
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Old 02-19-2019, 02:12 PM   #15
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Cars (and trucks, SUV's) are increasing in price significantly faster than wages. So this isn't surprising.
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Old 02-19-2019, 02:29 PM   #16
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Originally Posted by gathermewool View Post
What was your loan rate? Paying off a 0.9% interest loan early is nothing to brag about; in fact, doing so could easily be considered foolish.
7 yrs at 2.4%. I have a mortgage now, and I wanted to free up the money. It seemed wise to pay a bit extra each month on the car loan to knock the principal down. I also didn't want to get upside down on the car. I'm glad I paid it off.
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Old 02-19-2019, 07:25 PM   #17
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Cars (and trucks, SUV's) are increasing in price significantly faster than wages. So this isn't surprising.
Exactly. Combine this with the cost of college now along with cost of medical care/insurance and higher rent/mortgage.

Housing, medical and then people are prioritizing between education and car loans. Of course jack or Jill had to have that new SUV that cost $40K+ but they spread that out across 84 months at 5-6%...
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Old 02-19-2019, 10:53 PM   #18
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Hey dick tickles, this isn’t the PP thread or making ends meet thread. Take yo comments about college, etc the **** outta here.
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Old 02-20-2019, 09:59 AM   #19
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It's context for a thread about people not being able to afford their car payment.
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Old 02-20-2019, 10:58 AM   #20
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Hey dick tickles, this isnít the PP thread or making ends meet thread. Take yo comments about college, etc the **** outta here.
Were you drinking Tuesday night too? you got a wee bit too salty, levels rivaling the dead sea or even the salt flats.

for most it's getting through college with a car that's barely legal to drive on the road, let alone safe and reliable; then you get your first real job, you need reliable transportation, so you go out and get an auto loan on top of your existing college loans.

In a world where Toyota Corolla prices start at over 20k after destination, which doesn't include those fun dealer/doc fees and are approaching 30k once you start ticking boxes, it's hard to deny auto prices are on the rise, and the majority of people pay sticker, and can easily be talked into extended warranties, maintenance plans etc. toss in TTR and that 20k base corolla is 25k or more.
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Old 02-20-2019, 10:59 AM   #21
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Originally Posted by godfather2112 View Post
Hey dick tickles, this isnít the PP thread or making ends meet thread. Take yo comments about college, etc the **** outta here.
I don't see any political comments or anything not related to the OP post... ???
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Old 02-20-2019, 12:16 PM   #22
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I don't see any political comments or anything not related to the OP post... ???
There was mentioning of trump and tax policy. Additionally, healthcare, student loans, etc really are not a fitting discussion. We can lightly touch on them but if we start going down that rabbit hole, solid nope.
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Old 02-20-2019, 12:42 PM   #23
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But where is all the auto pay accounts? Late? On a scheduled loan? What year is it 1985?
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Old 02-20-2019, 12:49 PM   #24
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I've had my share of financial troubles over the past decade, but one thing I never ever did was be late on an auto loan, and thus even when my credit dipped into sub-prime, it elevated out of it because "high revolving credit balance" clears off of your record very fast, whereas delinquent payments takes longer.

Key to credit recovery is to never get sent to collections, and if you do, pay them off fast. I found out that one time that if I paid them off within the first few months, my being in collections never appeared on my credit record. Its like warning strips on the road: if you keep going you'll have a bad time but you're not there yet.

We bought the Outback used with cash in full, and put a sizable down on the WRX and got the Subaru incentive rate of 3.49% (if we'd waited just one more month we would've gotten it at 1.9%. *shrug* oh well... ), so we only had to finance $24k on my Limited (which we got for just over $31k after taxes, $29534.02 before taxes). So our monthly rate right now is very comfortable and it's a 60mo loan, not 72+. We'll have it paid off probably about 6mo early.
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Old 02-20-2019, 12:51 PM   #25
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But where is all the auto pay accounts? Late? On a scheduled loan? What year is it 1985?
Well, it's still considered late when there are insufficient funds in the accounts the lenders are trying to pull from.
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