More Americans fell behind on auto loans toward end of 2013

[unhappycamper]

http://www.adn.com/2014/02/24/3344099/late-payment-rate-on-us-auto-loans.html

More Americans fell behind on auto loans toward end of 2013
By ALEX VEIGA
AP Business Writer
February 24, 2014 Updated 6 hours ago

LOS ANGELES — U.S. car owners are carrying higher auto loan balances but still making timely monthly payments.

Auto loan debt per borrower grew 4.4 percent to $16,769 in the final quarter of 2013 from a year earlier — the 11th consecutive quarter to post an annual increase, according to data released Tuesday by credit reporting agency TransUnion.

Even so, the U.S. auto loan delinquency rate ended the last three months of last year at 1.14 percent, below the 1.3 percent average quarterly late-payment rate for every October-December quarter going back to 2007, the firm said.

The trend suggests borrowers with auto loans continue to keep up with payments, even as auto loan debt per borrower has grown steadily. It's up 12 percent since the first quarter of 2011.

[pipoman]

1. A big believer in paying cash for cars here..

After spending 18 years repossessing some 12k vehicles we haven't had an auto loan for around 15 years. Nobody really needs a $15k car. We buy a $3 or 4k reliable make/model car every few years and make payments to ourselves in between.

[SheilaT]

2. Same here. I am constantly amazed

at how much people are willing to pay for a fancier and newer car than they need. Or are willing to owe more than the car is worth. Most people, because they are financing a car, are really buying a car payment, not the vehicle itself.

I do spend more than $3 or $4k myself, but I'm guessing that you are far more knowledgeable about cars than I am and can perhaps do some of your own work on them. I've owned by current car (2004 Honda Civic) since 2007, and it's still going strong. I do sort of longer for a newer car, but tell myself that's quite silly since this one is perfectly good.

[pipoman]

3. People convince themselves that it is

cheaper and better to "trade" than to maintain. This can be true for some makes/models, but not all cars are created equal. ..A little research can vastly improve the chances of getting a better used car. My last Camry I paid $3k for, drove it 5 years, paid around $600 for repairs other than normal maintenance (right after I bought it), and sold it for $2300. I had saved around $7k making payments to myself during the 5 years. I bought another Camry for $5500, spent $850 on repairs right after buying it and kept the $3k stashed in case of unexpected repairs. .now 4 years later, I still have the $3k plus around $5k in payments to myself, and could probably get $4k for the Camry. Been thinking about a Toyota 4x4...country living plus the artic vortex. .

another pitfall is cheap new cars vs. Good used cars. I would rather have a good used.

[AnneD]

4. Last car loan I took out was for....

good used car with low miles. Paid it off early. I am looking at getting another used car. I am saving up cash. It is the only way to go. I have better things to spend my money on than a car that depreciates.

[pipoman]

5. And equally as draining, interest doubling the cost of the car

Then there is higher insurance and taxes.

My enlightenment actually came around 25 years ago before rush was ' talk radio', Talknet ruled talk radio. Larry King, Sally Jesse, and a guy named Bruce Williams. Bruce was a multi millionaire who talked about investment and debt. He used to tell people that he couldn't afford a new car for all the reasons above..most people driving new cars can't afford them either if the truth was known. .dog bless them for manufacturing good used cars for me to buy

[AnneD]

6. If you have a paid for car....

you have more money to invest or pay other debts off. I drive cars around until they are voting age at least. We are preparing to sell Hubby's old car. I will give him mine and we will go shopping for a nice low mileage used car. We are saving 6-10K and believe me, you can get a really nice car for that. I have a great mechanic and he will check out all our cars. He helps us maintain them so we always have a reliable car-even if one is in the shop.

Part of wealth is what you earn either through wages or interest on investments. The other part is what you save (or don't pay out in interest). If you owe and pay interest...money is being siphoned out of your wallet.