Latest Auto Lending News
Here are the latest news in the world of consumer auto lending. Stay informed on the latest practices affecting the cost of your next car loan and vehicle.
- CFPB Targets Discrimination in Auto Loan Battle
American Banker 16 May 2013
The Consumer Financial Protection Bureau is laying the groundwork to bring enforcement actions against auto lenders that pay bounties to brokers to steer borrowers toward high-cost loans, on the grounds that the markups are discriminatory because they are steeper for minorities than for whites...
- Households Cut Overall Debt, But Student Loans Jump
Wall Street Journal 14 May 2013
U.S. households lowered their debt loads during the year's first quarter, although student loan borrowing continued to climb, according to a report from the Federal Reserve Bank of New York. Total indebtedness fell by 1 percent from the previous quarter to $11.23 trillion. Total mortgage debt was down to $7.93 trillion, from $8.03 trillion in the three months prior; while credit card balances fell by $19 billion to $660 billion. Auto loans, however, were up by $11 billion; and student loan borrowing snowballed by a staggering $20 billion...
- Americans Are Borrowing Again But Still Less Than Before Freeze
Wall Street Journal 08 May 2013
According to the Federal Reserve's survey of senior bank-lending officers, 28 percent of banks reduced the cost of credit lines early this year to smaller businesses that have annual sales of less than $50 million. Similarly, residential lending began creeping up last year, and even individuals with poor credit are more able to buy a car today than they have been in recent year...
- Regulators Scrutinize Auto Lenders Over Add-Ons
Wall Street Journal 03 May 2013
The Consumer Financial Protection Bureau has issued subpoenas to U.S. auto lenders over the sale of extended warranties and other financial products, expanding a civil probe that could put the brakes on the thriving vehicle-finance industry. Although such products are legal, regulators are investigating whether terms and costs -- which typically are built into the total purchase price -- are adequately disclosed...
- Edmunds.com: Cash for Clunkers Better Than High-Interest Car Loans
Los Angeles Times 11 Apr 2013
A recent investigation by Edmunds.com delved into the Buy Here Pay Here (BHPH) industry, which has been criticized for charging interest rates approaching 30 percent, requiring steep down payments, and repossessing vehicles at a high rate. In “The Debt-Free Car Project,” researchers purchased a 17-year old used Lexus outright, drove it for a year, sold it, and then compared the total out-of-pocket costs to a BHPH loan on a newer car...
- Car Dealers Fight Back Against CFPB Auto Financing Rule
American Banker 25 Mar 2013
Auto dealership advocates are warning that costs will rise for borrowers if the Consumer Financial Protection Bureau presses banks to curtail auto loan markups set by dealers. The red flag followed the CFPB's new bulletin that said banks are liable for discrimination if their partner dealers mark up the interest rates on loans for minority borrowers or otherwise violate fair lending laws...
- Consumer Bureau Warns Auto Lenders on Discriminatory Rates
Reuters 21 Mar 2013
The Consumer Financial Protection Bureau on March 21 warned auto lenders that they might be liable for breaking the law if they engage in a common industry practice that consumer advocates say results in higher interest rates for minority borrowers...
- Banks Brace for Looming Crackdown in Auto Lending
American Banker 18 Mar 2013
The Consumer Financial Protection Bureau is readying a crackdown on interest-rate markups that automobile dealers tack on to the cost of vehicle loans. Through a practice known as dealer participation, the dealer typically retains most of the markup -- which usually ranges from 2. to 2.5 percentage points...
- More Subprime Buyers Getting Auto Loans
Associated Press 05 Mar 2013
Banks and finance companies continue to write more auto loans to subprime buyers, but those buyers' average credit scores remain higher than before the recession. Experian Automotive said Tuesday that 43 percent of new and used car loans written in the fourth quarter of 2012 went to subprime buyers...
- Year-Over-Year Late Car Payments Fall
Worcester Telegram & Gazette (MA) 26 Feb 2013
More Americans fell behind on auto-loan payments in the last quarter of 2012, although this is a common occurrence due to holiday spending. Beyond the seasonal increase, however, the late-pays on vehicle loans fell on an annual basis to nearly the lowest point in 10 years, according to TransUnion. The rate of auto loans with payments late by at least 60 days was 0.41 percent in the last quarter of 2012, an increase from 0.38 percent in the previous quarter but down from 0.46 percent a year earlier. Most borrowers keep making paying their auto loans a priority over other debt payments. "Consumers are valuing their auto-related loans a little more ahead of other things when they do get a little bit stretched in their budgets," said TransUnion's Peter Turek.