First Housing, Now Auto Loan Delinquencies Take A Huge Jump

First came housing loans and the subprime-mortgage crisis.

Now, signs of stress are creeping into another key consumer area: auto loans.

Delinquencies in the auto-loan market are ticking up to their highest level in several years. Lenders are tightening terms in some cases, and interest rates have risen from the rock-bottom levels of a few years ago. About $575 billion in loans for new and used cars are made annually, according to the National Automotive Finance Association.

About 4.5 percent of auto loans made in 2006 to top-rated borrowers were at least 30 days delinquent as of the end of September, up from 2.9 percent the previous month, according to a Lehman Brothers survey of companies servicing these loans. That is the biggest one-month jump in at least eight years. Lehman says 12 percent of subprime borrowers, who have poorer credit records, were delinquent on their 2006 auto loans as of September. That is the highest level since 2002 and up from 11.1 percent the previous month.

EnnNorak - 12/20/2007 11:02:08 PM

+1 Boost

The problem is the way we motivate and reward our top executives -- it's all based on maximizing the share price in the short term and letting someone else hold the bag when things go bad. Why are we lending money to dead-beats who will not or simply can not pay back their loans? It has been too easy for the money masters to package bad loans and understate the risk when selling the debt obligations off in the form of a package that nobody knows the exact contents of. BTW, I do not feel sorry for people who bought expensive homes beyond their means as a speculative investment hoping that home values will rise forever.

TexLandRover - 12/13/2007 9:34:25 PM

+2 Boost

Wake up "MidEngine"...Oh lets see, the situation in the Middle East is just so wonderful. I don't think so. Its a total perversion of human values and thought in most of the Middle East. Western thought, culture, tolerance and prosperity is something that has benefited the entire world. Face the facts, and quit living in ideological thought vacuum.

M53R - 12/14/2007 10:16:29 AM

-2 Boost

The situation would be more than wonderful if the US would leave us alone :)

EnnNorak - 12/20/2007 11:09:39 PM

+1 Boost

The gap between rich and poor is far smaller in the U.S. and other Western countries than in other parts of the world and that is why everyone wants to come here. The leaders in these other countries have a history of ripping off their followers and stashing stolen billions in safe havens for the day they get overthrown.

M53R - 12/15/2007 4:29:34 AM

0 Boost

Are you sure your not mentally ill? WTF are you talking about?

M53R - 12/16/2007 9:17:28 AM

0 Boost

LOL wow... I wonder why I never heard about all of those trying to rule the US :S. But then again, it was only BS written on his site, which doesnt prove your point what so ever. They never started a war in the US, niether did they steal oil, kill hundreds of thousands...

KZ258 - 12/16/2007 3:04:34 AM

+2 Boost

this is awesome! a lesson about history! you gotta love the people of this site lol

keep up the variety :)

EnnNorak - 12/20/2007 11:10:55 PM

+1 Boost

I guess it's bound to get political from time to time.