A more hopeful take on automotive financing [Video]
Posted on Monday, December 12, 2016 at 7:14:57 PM
Subprime lending on mortgages was one of the centerpieces and causes of the Great Recession a few years back, as large financial institutions disbursed financing programs to individuals who would never be able to foot the bill. This is one of the reasons why so many groups have raised questions regarding the lending practices of automotive financing entities this year, but those concerns might not be all that accurate.
Forbes contributor Jim Gorzelany recently argued that the real question facing the automotive market is related to the cost of new models, rather than the prospect of a proverbial "bubble" due to shoddy lending practices. According to the author, Experian recorded a 4.5 percent decrease in subprime lending between 2015 and 2016. At the same time, though, Gorzelany pointed out that a new car costs an average of $31,000, which is massive when considering the median household income is roughly $57,000.
If you are thinking about purchasing a new or used car, always consider speaking to your local bank about the financial implications involved, as well as which financing programs are best-suited to your needs and goals.