Category: Debt

Could Subprime Car Finance Cause Another Global Financial Crisis? Modest Money6 Comments

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Given the events of years gone by, the very mention of ‘sub-prime lending’ may bring fear to the forefront of your mind. Despite this, investors are turning to the subprime car finance market in their droves, lenders are underwriting deeper than ever before and both are likely making a tidy profit.

Car finance is now more freely available in the US than ever before so it’s hardly surprising that nearly 39 per cent of all finance agreements, totalling $337, were classed as below prime in the final quarter of 2014. Although that’s not necessarily a bad thing, what’s worrying is the fact that repossession rates have risen 70 per cent year-over-year.

Expressing concern, non-profit consumer group, the Centre for Responsible Lending (CRL), has gone as far as to suggest that the industry is in a bubble and we all know what happens to bubbles – they burst.

Chris Kukla, senior Vice President of the CRL said: “Underwriting standards in the sub-prime market have deteriorated, while practices in the market, like interest rate mark up and the sale of add-on products, can make loans unaffordable.”

Despite these concerns, more investors than ever appear to be turning to the market for…

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This entry was posted in Debt, Financial Advice, Vehicles, and tagged , Modest Money6 Comments
By : Adam | 4 Feb 2015
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The following is a guest post about personal bankruptcy. If interested in submitting a guest post please read my guest post policy and then contact me. During 2013, almost 120,000 Canadians filed for bankruptcy relief or filed a consumer proposal. While the number of personal …

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