In 2008, a phenomenon called “Short Sales” permeated the real estate market. Values of homes were a lot less than what people owed on their homes. Many people determined it was better to let the properties get repossessed by the bank than continue payments on a losing prospect. However, the banks didn’t want to be overwhelmed with repossessed property. So, instead of repossessing the properties, lenders accepted short-sales on the properties, meaning they accepted an offer from a new buyer that was significantly less than the amount owed from a new buyer.
Today, auto lenders are in the exact same situation. They are facing millions of borrowers who purchased vehicles at prices that were so high that it makes more sense to walk away from the vehicle and the loan and start over with something different. Lenders are proactively working with borrowers to avoid a crush of repossessed vehicles being added to the liability lists of all those lenders. For instance, the lenders are instantly offering to extend the terms of loans in order to help prevent the upcoming deluge of repossessed vehicles. However, that won’t do enough to fix the impending problem. Just like the housing market, they will need to renegotiate the balance loans due, in order to get borrowers more in line with what their vehicles are worth. That most likely means more taxpayer money going to bail out certain banks, instead of letting where the chips of capitalism fall.
So, what does this mean to you, our valued and appreciated clients and friends? There will be smoking deals coming up! Unless the government intervenes in their typical way, allowing for bad business decisions to be wiped away. Only time will tell how this will play out.
With all the options for financing autos, many are getting creative in dealing with this upcoming tsunami of vehicles.
If you are on the bad end of an auto loan, feel free to call Brian at 480-330-8185 to discuss the various options. He can act as your representative, help you get out of a bad auto loan, and start the recovery process. He can help you acquire a different vehicle before credit scores get affected. Everyone’s situation is unique, and the Newman Auto Network has unique ways to assist. Call Brian at 480-330-8185, whether you are looking to take advantage of the upcoming situation or need to get out of a bad situation.
