On the Crippling Burden of Car Loans
In some cases, they pave the road to jail
A recent piece in MarketWatch reveals some staggering statistics on auto loan debt:
In 2019, about 85% of new car buyers in the U.S. used a loan to pay for their car, according to Public Interest Research Groups, a consumer advocacy organization.
Americans currently owe about $1.5 trillion in auto loan debt.
The average monthly payment now exceeds $700 — and cars are financed on terms up to 84 months.
As it turns out, some auto lenders can be pretty unscrupulous.
One prominent auto lender, Credit Acceptance, is being sued by New York’s Attorney General and by the Consumer Financial Protection Bureau (CFPB) for unfair and deceptive practices.
“Credit Acceptance obscured the true cost of its loans to car buyers, leading to severe financial distress for borrowers and subjecting them to aggressive debt collection tactics on loans its own systems predicted that borrowers can’t afford to repay,” said CFPB Director Rohit Chopra. “The CFPB and the New York Attorney General seek to halt Credit Acceptance’s illegal practices and make consumers whole.”
In some cases, these car loan debts can land a borrower in jail.
