Crisis in housing market also affecting auto finance industry
Purchasing a car has always been something that was a necessity, but also potentially enjoyable for consumers. However, alot of consumers used to get new cars from money they took out on their home equity loans. With less home equity loans/refinances happening, this is affecting the auto finance industry. In addition, those consumers that were doing a direct loan with the auto lender, are having a harder time getting approved for that auto loan. ABC consumer who used to be approved for a subprime auto finance loan is now having to jump through more hoops to get that loan. This is ultimately affecting the lead generation industry, because less leads are as “attractive” because lead buyers are having to increase their minimum requirements. Consumers with outstanding car loans are also affecting this industry because these same consumers are falling past due on their mortgages, paying $4 a gallon gas and therefore not able to pay the car note….or go out and get a new car. So then what? Those cars have to be repossesed and everntually sold at an auto auction for pennies on the dollar.
When will this get take a turn for the better?