Deceptive lending practices creep into used car market

[babylonsister]

Deceptive lending practices creep into used car market
By David Lightman | McClatchy Newspapers


WASHINGTON — Many car buyers are having the same kind of trouble obtaining and paying off loans that plagued America's housing market, new data show.

Some 3.25 percent of all indirect auto loans were at least 30 days overdue in the third quarter, the American Bankers Association reports. That's the worst showing since the group began compiling such numbers in 1980. Indirect loans are those arranged by a third party, typically an auto dealer, and they account for 90 percent of all car loans.

"Many car buyers have fallen victim to many of the same subprime, predatory lending practices that have caused so many home foreclosures and our current economic recession," said Rep. Doris Matsui, D-Calif.

Not only are their payments starting to lag, but "evidence suggests that fraudulent practices with regard to both the condition and financing of used cars are on the rise," said Rep. Bobby Rush, D-Ill., the chairman of the House Subcommittee on Commerce, Trade and Consumer Protection.

He and others, including the National Consumer Law Center, say this trend is affecting the poor disproportionately.

"For poor and working class Americans who do not own a home, automobiles are usually the single biggest asset they possess," Rush said.

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http://www.mcclatchydc.com/226/story/63682.html

[Clear Blue Sky]

1. Used cars and deception together? Whoda thunk it?

[babylonsister]

2. While the poor and working class get screwed...again. nt

[Lone_Star_Dem]

3. They already existed in in the used car market.

It's not as if this is a new thing or even that the practices they described in the article haven't been being used for years. However, I don't doubt that they're on the rise and that it's hurting the lower income, working class the most. Who knows, perhaps the FTC will even begin to take it more seriously?