Smart Borrower Blog

Archive for the ‘Auto Loans’ Category

Auto, Mortgage Rates Likely to Stay Low After Fed Decision

The Federal Reserve’s Federal Open Market Committee (FOMC) voted today to keep its key interest rate at or near zero for the next six weeks, and promised to leave it there for as long as two years. The Fed’s target interest rate influences many rates in the market place, particularly mortgage interest rates and auto loan rates. And even though the Fed sees the overall economy improving somewhat, it noted in a statement that “despite some signs of improvement, the housing sector remains depressed,” which is at least part of the reason that “economic conditions…are likely to warrant exceptionally low... more »

Car Sales Likely to Make Major Jump in March

All the numbers are pointing toward a very strong month of car sales for the U.S. in March, according to auto data company TrueCar.com, perhaps even the biggest increase since August 2007, almost five years. TrueCar.com is predicting that sales of new cars will grow 14 percent in March from the previous year to a seasonally adjusted annual sales rate (SAAR) of 14.5 million. “Due to stronger than expected recovery, we’ve increased our sales forecast another 3.6 percent, from 14.0 million unit sales to 14.5 million unit sales in 2012,” said Jesse Toprak, vice president of market intelligence for TrueCar.com... more »

Student Loan Debt Continues to Outpace Credit, Auto Debt

Americans have more invested in student loans than they do in car loans or on their credit cards, according to new information from the economists at the Federal Reserve Bank of New York. While this has been a trend for many months, student loan debt in the third quarter of 2011 now totals $870 billion for Americans across the country, representing a 2.1 percent increase from the second quarter. And as the New York Fed economists wrote on their blog , “With college enrollments increasing and the costs of attendance rising, this balance is expected to continue its upward trend.”... more »

Auto Market Shows Signs of Looser Lending

The U.S. auto loan market is definitely reviving after hitting a low point back in 2008 with the financial collapse. While credit all but dried up at that time, banks have since shown much more interest in funding auto loans with banks even starting to compete against each other for business. “Banks have had to look elsewhere for growth opportunities, and auto has been one of the nice spaces over the last couple years,” Curt Beaudouin, a bank analyst for Moody’s Investors Service in New York, said in a phone interview with Bloomberg . “The credit experience in terms of... more »

Credit Card Use Jumped in December

U.S. consumers pulled out their plastic in greater numbers for purchases in December, according to information from the Federal Reserve Tuesday. Total credit debt increased substantially as well. Revolving credit, such as credit card debt, grew by $2.76 billion in December to $800.98 billion, after rising $5.58 billion in November. Non-revolving credit, driven by student loans and auto loans, posted a $16.55 billion increase, to $1.697 trillion, also following a major jump in November. Total consumer credit debt rose by $19.31 billion in December, a striking increase compared with a prediction from economists surveyed by the Dow Jones Newswires that... more »

Fed Keeps Rate At Rock Bottom, No Changes Likely Until 2014

After its two day meeting, the Federal Reserve decided to leave its target interest rate unchanged, and also forecasted that it will not raise rates until the end of 2014. The federal funds rate, the Fed’s main method of affecting inflation and the economy, will remain in the range of zero to 0.25 percent for at least the next six weeks. It was predicted in a statement that, “Economic conditions…are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.” Low Fed rates have kept mortgage, car and student loan rates exceptionally low for... more »

Subprime Borrowers Boost Auto Lending

The automotive lending pipeline has started to open up again for borrowers with less than stellar credit. According to new reports, car loans for subprime buyers, or those with credit score between 550 and 620, have risen substantially this year, indicating a revival of lending among that market segment. Information from CNW Research and Experian, as reported in a CNBC article, shows that the number of car loan approvals for those with poor credit have jumped up 15.72 percent already this month over the whole month of November, while approval for individuals with good scores rose just 1.36 percent from... more »

Consumer Borrowing, Credit Card Use Up in October

Consumers continued to borrow more money in October, according to the latest figures from the Federal Reserve, and the trend could suggest either progress or danger. Total consumer credit grew by $7.6 billion to $2.457 trillion, outpacing September’s $6.88 billion increase. Americans have upped their spending and borrowing for 12 of the past 13 months, with August being the notable trend-breaker. Borrowing during that month fell by the most in 16 months. Still, in general U.S. consumers have been taking on more debt. Non-revolving credit, including student loans and car loans, rose 5.3 percent, or $7.28 billion in October. This... more »

Auto Delinquencies Post Slight Seasonal Rise

There were more auto loan borrowers behind on their payments during the third quarter of this year compared to the previous quarter, but the small uptick is nothing to worry about, according to credit reporting agency TransUnion. The percent of customers who were late by 60 days or more on their car payments rose to 0.47 percent between June and September, up from 0.44 percent in the second quarter. The new rate is still part of a downward trend, as it is down from 0.58 percent one year ago. TransUnion reports that auto delinquencies typically rise in the third quarter... more »

Consumer Borrowing Makes Surprising Jump

Consumer credit borrowing in the U.S. increased substantially in September from the previous month, spurred on by rises in student and auto loans. Borrowing rose by $7.39 billion to a total of $2.542 trillion, according to the Federal Reserve. This was a particularly surprising increase after consumer credit fell $9.68 billion August, and analysts only predicted a growth of $4 billion for September. The increase was apparently led by a jump in borrowing for items like cars and tuition. Non-revolving credit, which includes both those types of loans rose $8.01 billion in September to a total of $1.662 trillion. Revolving... more »