Posts Tagged: ‘Auto Loans’

How to Reduce the Cost of Your Auto Loan

June 9, 2017 Posted by kingcade

When applying for an auto loan with less than perfect credit, it is inevitable the loan will come with a higher interest rate.  While this makes the vehicle more expensive, there are ways you can reduce the cost of your loan.  Follow these simple tips:

  • Consider the choice of your vehicle. This is probably the most important decision, when it comes to determining the cost of your loan.  You can save more money simply by choosing an affordable vehicle.  Subcompact, compact and midsize cars are better choices than trucks, vans and large SUVs.  These cars not only come with a lower price tag, but insurance rates, gas mileage, depreciation and maintenance costs will also be less.  Important consumer tip: Make sure your car payment is below 10-15% of your monthly income.
  • Keep the loan term short. The length of your car loan plays a big part in how much you will end up paying for your vehicle.  The shorter the loan term- the lower the overall cost of the loan.
  • Make a down payment. Making a down payment will help reduce the cost of your car loan.  If you can put down at least 10% at the time of purchase, this will save you a lot of money in the long run.  Making a solid down payment will also help offset the higher interest rate over the life of the loan.

Your goal when financing a car should be to get the vehicle you need while getting the chance to improve your credit through on-time loan payments.  Here are three more tips to keep in mind: know your budget before beginning your car search; stick to your instincts and do not allow yourself to get talked into a more expensive car; focus on the total cost of the loan as opposed to just the monthly payment.

If you have any questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Related Resources:
https://www.autocreditexpress.com/blog/reduce-the-cost-of-your-car-loan/

Auto Loans & Default Rates on the Rise

May 26, 2017 Posted by kingcade

According to data released this week by the Federal Reserve Bank of New York a record 107 million Americans have auto loan debt.  That accounts for approximately 43% of the adult population in the U.S.

Auto loans have been increasing rapidly. In early 2012, only 80 million Americans had car loans. But now more Americans have auto loans than home loans- and according to recent numbers, many are having trouble affording their monthly payments. There are currently 6 million people who are 90 days or more behind on their car payments.

After the financial crisis, so-called “sub-prime” auto loans were routinely given to borrowers with less than perfect credit. Low quality loans spiked to pre-crisis levels in 2015 and 2016, according to federal data.

Many of the consumers qualifying for these loans do not understand the terms and conditions. The interest rates can be astronomical- sometimes as high as 20% and penalties for default can be severe.

Santander Consumer USA Holdings Inc., which is counted among the biggest subprime auto-loan firms, verified income on just 8% of borrowers.  Limited verification of loan applicants’ stated incomes and employment “creates more uncertainty around whether borrowers will be able to afford their monthly payments, which becomes particularly important if they have poor credit records and risky loan terms,” the analysts wrote.

Click here read more on this story.

If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Related Resources: http://www.marketwatch.com/story/auto-lender-santander-checked-income-on-just-8-of-subprime-loans-bundled-into-bonds-2017-05-23

Millennials owe a Record Amount of Debt

May 5, 2017 Posted by kingcade

Millennials (also known as Generation Y), those 21 to 34-year-old hold an estimated $1.1 trillion of the country’s $3.6 trillion in consumer debt.  Rising student and auto loans are outweighing a decline in mortgages.

With all of the rising debt comes the risk of default.  There is evidence that millennials are curbing their spending habits when it comes to smaller purchases, whether searching for the lowest price or waiting for the best time to buy.

But concerns over student loans and auto loans remain.  A growing amount of auto loan debt comes from leasing, with 32% of millennials choosing to lease in 2016, up from 21% in 2011, according to a report from Edmunds.  Households making $50,000 or less, millenials made up 21% of lessees.

If millennials pay their student loans over their auto loans, lower-credit-score applicants could have a hard time financing vehicle purchases.  If that happens, automakers could be in trouble.

Click here to read more on this story.

If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

 

 

An Increasing Number of Americans Have Stopped Paying Their Car Loans

April 6, 2017 Posted by kingcade

Wall Street is starting to worry about the auto loan market as millions of Americans are falling behind on their car loans. The increased interest in the auto loan market seems to be based on commentary from Ally Financial, weak guidance from Ford and what Evercore ISI called “a splurge in incentive spending.” Here’s what you need to know:

  • The delinquency rate for subprime auto loans is at the highest level in at least seven years.
  • Banks are pulling back and newer players with loose lending standards are stepping in.
  • Used vehicle prices are dropping sharply, as the market is flooded with off-lease vehicles.
  • The percentage of trade-ins with negative equity is at an all-time high.
  • Asset-backed securities based on auto loans are showing signs of stress.
  • A growing proportion of the auto loan ABS market is now made up of “deep subprime” deals.

 

The 60+ day delinquency rate for subprime is the highest it has been in seven years. A key driver of the increasing delinquency rate is a spike in the proportion of “deep subprime” deals, or those with an average FICO score of less than 500. In other words, the subprime delinquency rate is creeping up while the subprime market is ballooning in size.

The Liberty Street Economics post, written by Andrew Haughwout, Donghoon Lee, Joelle Scally and Wilbert Van Der Klauuw said, “The data suggest some notable deterioration in the performance of subprime auto loans. This translates into a large number of households with roughly six million individuals at least ninety days late on their auto loan payments.”

If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Related Resources:

http://www.businessinsider.com/wall-street-is-worried-about-car-loans-2017-3/#fitch-deteriorating-credit-performance-will-be-more-acute-in-the-subprime-segment-1

https://www.aol.com/article/finance/2016/11/30/6-million-americans-have-stopped-paying-their-car-loans-and-it/21617633/

Delinquencies on Timeshare Rentals Reveal Another Sign of Consumer Debt Weakness

March 10, 2017 Posted by kingcade

Americans are getting more behind on their timeshare rental payments, according to Fitch Ratings. Approximately 3.75 percent of timeshare borrowers were behind on their bills in the fourth quarter, up from 3.37 percent in the same period a year earlier, and the highest level since the end of 2011, according to the report.

According to Fitch, the defaults are evidence that loan companies are becoming less strict when financing to customers. These companies are also writing off more loans. The default rate rose to 0.70 percent in the fourth quarter from 0.61 percent in the same period a year earlier.

Other pockets of weakness include online consumer loans and subprime auto loans, which we have touched on in previous blogs.  These rising delinquencies come as Americans have increased their debt at the fastest pace in three years.

U.S. household debt increased by $226 billion in the last three months of 2016, bringing total consumer debt to $12.58 trillion.  The numbers, which include mortgages, student loans, auto loans and credit card debt, are dangerously close to the $12.68 trillion high-water mark in 2008.

Click here to read more on this story.

If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.