Borrower fraud in U.S. auto loans is surging, and may approach levels seen in mortgages during last decade’s housing bubble, according to a startup firm that helps lenders sniff out bogus borrowers. As many as 1 percent of U.S. car loan applications include some type of material misrepresentation, executives at data analytics firm Point Predictive estimated based on reports from banks, finance companies and others. Lenders’ losses from deception may double this year to $6 billion from 2015, the firm forecast.
Scary U.S. Auto Loan Debt Numbers Foreshadow Economic Downturn
Rising U.S. Auto Loan Debt a Symptom of Bubble Economics Permeating Society
Auto industry sales have come back from the “Great Recession” grave, but U.S. auto loan debt threatens to relegate the industry to purgatory. Rock-bottom interest rates have allowed consumers to gorge on debt for too long, setting the stage for the auto loan debt 2017 debacle playing out before our eyes. The bill has come due, and the auto industry is bracing for a protracted retrenchment.
With late payments on the rise, a dealership upsell begins to look dangerous.
Lured by low interest rates, low gas prices, and a crop of seductive vehicles that are faster, smarter, and more efficient than ever before, American drivers are increasingly riding in style. Don’t be fooled by the curb appeal, though-those swanky machines are heavily leveraged.
The country’s auto debt hit a record in the fourth quarter of 2016, according to the Federal Reserve Bank of New York, when a rush of year-end car shopping pushed vehicle loans to a dubious peak of $1.16 trillion. The combination of new car smell and new credit woes stretches from Subarus in Maine to Teslas in San Francisco.
Leading Economist Will Offer Assessment of Current State, What’s On the Horizon
FOR IMMEDIATE RELEASE
October 3, 2016 – RepoPulse.com is excited to host a free webinar on Tuesday, October 4 at 1pm EDT to help make sure repossession agents and auto lenders are updated about the state of the auto finance and repossession industries, from an economic perspective.
Detroit, MI, 30 September 2016 – The delinquency rate on subprime auto loans rose in August, and a credit rating agency that monitors the market said the trend likely will continue through the rest of 2016 as prices of used cars continue to fall.
The delinquency rate has been trending upward throughout 2016 and now approaches peak levels seen in late 2008 and early 2009.