patrick.net

JH says

the dealer repos the car, washes it real real pretty and resells it 30% over market value to a buyer who does not negotiate. Loss covered.

Few repossessed cars fetch enough when they are resold to cover the total loan, the court documents show. To get the remainder, some lenders pursue the borrowers,

Yeah, Wells Fargo will send them a 1099-C

Banks had to write off as entirely uncollectable an average of $8,541 of each delinquent auto loan, up about 15 percent from a year earlier.

zzyzzx says

JH says

the dealer repos the car, washes it real real pretty and resells it 30% over market value to a buyer who does not negotiate. Loss covered.

Few repossessed cars fetch enough when they are resold to cover the total loan, the court documents show. To get the remainder, some lenders pursue the borrowers,

Yeah, Wells Fargo will send them a 1099-C

Banks had to write off as entirely uncollectable an average of $8,541 of each delinquent auto loan, up about 15 percent from a year earlier.

Heh heh, was that from the article I didn't read?

What I failed to include in my indepth analysis is that it probably takes several months of non payment before repo. So they are 1) probably underwater on the car (gap) and 2) could be behind as much as several thousand. People taking on $400-600+ payments on cars...hmmmm...

Don't you think though, that the dealer is making something on this? The bank is writing off the loan, but I would bet the actual loss (dealer + bank) is less than $8541. Geez, people are buying (and defaulting on) expensive cars to have that be the loss!

Howdy There says

But since people aren't rational (ie they're stupid, or at least uninformed) selling overpriced stuff on an outrageous payment plan works. Sad.

And emotional and instinctual, with lots of limbic activity going on.

That one little assumption is why Economists have the predictive power of the Amazing Criswell.

http://www.jb6H14gVWjM

If you drive new car, you are a success. Your neighbors and peers will respect you. You will sell more homes!

CL says

What do you think? Will Auto loans collapse?

NO because Cash for clunkers got rid of all of the self reliant, easy to fix, cheap to maintain, hoopties that didn't need a computer and a cmap unit to run.
Buying new cars will come in and out of fashion but one thing for sure, we're not far from $30K 10 year old cars. and 7 year loans on them.
Nor are we far from self driving alternate energy cars, that start at $120K and no other new cars are allowed to be manufactured. So these gas combustion engine cars that we see now. Will be prime real estate someday for those that will never be able to afford the 2020 $158K Honda Fit.

Not possible. Unless we start having car brokers who make it impossible to buy and sell on a private market.

Blurtman says