Auto Finance Trends
Auto loan defaults took another tiny step down in April, falling to the lowest level in eight years.? This is a good sign for the economy, along with related news that default rates fell in April for all loan types except bank cards.?
People tend to view cars as a necessary expense they?d be hard pressed to live without, which explains why consumers often place a higher priority on car payments than other debts in the face of a financial crisis.? High rates of auto loan defaults accompany a very weak economy, while shrinking auto loan default rates can be a sign of a strengthening economy.??
According to the S&P/Experian Consumer Credit Default Indices, the rate of default for auto loans fell from 1.11 percent in March to 1.07 percent last month. ???April data show the continuation of the positive trend we saw in the first quarter of 2012,? said David M. Blitzer, managing director and chairman of the Index Committee for S&P Indices. ?Not only have we continued the general downward trend in consumer default rates that began in the spring of 2009, but we appear to be reaching new lows across many of the loan types.?
As the economy shows signs of recovery, we can expect more consumers to take on new car loans.? The average car payment in the U.S. today is estimated to be $428.17 per month.? When considering a new or used car purchase, consumers should do some homework first to determine how much car they can afford, including possible increased insurance costs, before setting foot on a car lot.
Seidberg Law is a professional debt collection law firm centrally located in Phoenix, Arizona, offering services statewide to assist clients in collecting delinquent accounts from borrowers throughout Arizona, including defaulted auto loans.? For more information, contact Seidberg Law today at (623) 258-4397 or visit us online at www.seidberglaw.com/.
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