2015: Even Mark Zandi Admits It: Auto Loan “Credit Quality Is Eroding Now, And Pretty Quickly”

Just 2 days after President Obama reflected on his glorious ‘save’ of the US auto industry – forgetting to explain how so much of this ‘buying frenzy’ has been predicated on massive low-quality-borrower-based credit extensions – The Wall Street Journal bursts the bubble of ‘contained-ness’. Auto loan delinquency rates are surging to levels not seen since 2008 and stunningly, more than 8.4% of borrowers with weak credit scores who took out loans in the first quarter of 2014 had missed payments by November. As even glass-half-full-status-quo-hugger Mark Zandi is forced to admit, “It’s clear that credit quality is eroding now, and pretty quickly.” As The Wall Street Journal reports, Borrowers who took out auto loans over the past year are missing payments at the highest level since the recession, fueling concerns among regulators, analysts and some in the car industry that practices that helped boost 2014 light-vehicle sales to […] Read More

2014: Lenders Can Now Disable Your Car When You’re Driving on the Freeway

People with poor credit are being sold cars with GPS-based kill switches. Imagine this scenario: You’re on an important trip, miles from home and stopped in traffic, but before you can continue on your way, your car shuts down. You’ve got enough gas in the tank and no mechanical problems. But you’re stranded far from home because you’re a few days late on your car payment and the lender won’t let you drive until the debt is paid. If this sounds like part of a dystopian future in which repo men are now cyborgs, it’s not. It’s happening today and becoming a big part of the new automotive landscape. Car dealers and automotive lenders are targeting those with poor credit by installing GPS-based kill switches, or starter-interrupt devices, on the cars that they sell. The New York Times recently reported that about 2 million cars are now outfitted with such […] Read More