Auto Loans are Tougher to Get

Trying to get an auto loan? Then you have probably already discovered that it is much harder than it used to be. Those that have auto loans are defaulting on them, and those that want them cannot get them – all due to a weakened economy. Many banks have instituted a “credit freeze” for all but their absolute best customers as everyone is afraid to loan anyone money.

The auto loan industry has been hit almost as hard as the mortgage industry, but as more people default on their homes, they are also defaulting on their auto loans. This means that fewer people are eligible for auto loans, and thus fewer people are purchasing cars.

This means that the car industry is getting hit hard as well, as is evidenced from their meetings with Congress. The automakers are asking for assistance because otherwise they are going to have to lay off millions of people thus further damaging our economy. The idea is that if they could get some help to get them through, an auto loan of their own, then we might weather the storm.

But it is a vicious cycle – client does not pay auto loan, therefore it is harder for someone else to get an auto loan, the cars therefore are not selling, and the automaker isn’t making any money, so now they need an auto loan as well. It is evidenced across America that if the auto industry goes under as many others have already done, then we may be swimming against a current that is simply too strong to beat.





Back to  December 2008  Archives