There is Hope for Car Loans

For those people who have an auto loan and are upside down on it, there is hope. It used to be that if you had an auto loan that was worth more than the car itself, they would simply roll the negative equity into the new car loan. But with the economy being what it is, auto loan dealers are hesitant to take on that kind of debt on a car that if repossessed, won’t give them back their investment.

Auto loan dealers say that they cannot take the risk on most people that they will pay them back. They say that if they allow them to take out an auto loan for more money and then they don’t pay – they are left holding the bag. They say that they already have enough car loans for the amount of the car or less that are being repossessed, they don’t want to continue losing money.

So now you have consumers with auto loans who are unable to get out of the car that they are in. However, there is a chance that this might change for them. Some auto manufacturers are offering cash rebates to pay off your trade in vehicle so that the money owed does not go on the new car loan. So when they get the new auto loan, and they get the rebate, instead of spending that money towards the new car loan, they use it to pay back the old loan instead. This then leaves them with the new car loan, and none of the excess baggage.

The manufacturers are happy because it gets consumers to purchase new cars, and the auto loan dealers are happy because it means that they don’t have people driving off the lot with large balances on their auto loans. The rebates will help anyone upside down on their car loan, enabling them to have more options in what they are going to drive every day.





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