Auto loans hit 8-year high; subprime lending a concern

[unhappycamper]

http://hamptonroads.com/2014/08/auto-loans-hit-8year-high-subprime-lending-concern

Auto loans hit 8-year high; subprime lending a concern
By Christopher S. Rugaber
The Associated Press
© August 15, 2014

U.S. auto loans jumped to the highest level in eight years this spring, fueled by a big increase in lending to risky borrowers, according to a report Thursday by the Federal Reserve Bank of New York.

Yet the New York Fed said loans to borrowers with shoddy credit, known as subprime lending, still make up a smaller proportion of total auto loans than before the Great Recession.

Federal banking regulators have raised concerns in recent months over the rapid increase in subprime auto loans. Such loans could lead to more defaults, harming banks and consumers. Auto loans also are packaged into securities and sold to investors, like mortgage loans. That could amplify the impact of any rise in auto loan defaults.

This spring, banking regulators at the Office of the Comptroller of the Currency said "signs of increasing risk are evident" in auto lending. They found that lenders are making larger car loans. As a result, the size of car loans in default has increased in the past two years.

[woodsprite]

1. Something's up. We have never

In our entire lives been called by a car dealership
asking us to bring our car in for evaluation or our truck in
because somebody wanted to buy it. We had them both in
for recent maintenance, and are having an idle problem
with the truck, but they're 2003 and 2006 vehicles. We've
received 3 or 4 calls, including one while we were on
vacation. They're ticking me off so much that that particular
dealership may lose our business altogether. We just
bought a used car from another dealer.

I told my husband the driving force must be bird dog fees
or they earmark customers based on age of their
vehicles.

[Travis_0004]

2. Its not a scam, they want to sell you a new car.

If you are happy with the car you have there is nothing they can sell you. If they buy your used car they can sel you a new car. I doubt they have a buyer lined up for the used car.