Americans are getting into debt to afford food, gas

marketwatch ^

[Red in Blue PA]

ut please appreciate how stretched non-discretionary car financing has now become. The following is per the Wall Street Journal:

“[The] average automotive loan term [reached] 66 months for the first time. According to Experian Automotive’s latest State of the Automotive Finance Market report, loan terms in the first quarter of 2014 reached the highest level since the company began publicly reporting the data in 2006. The analysis also shows that loans with terms extending out 73--84 months made up 24.9% of all new vehicle loans originated during the quarter, growing 27.6% since Q1 2013.

“The average amount financed for a new vehicle loan also reached an all-time high of $27,612 in Q1 2014, up $964 from the previous year. In addition, the average monthly payment for a new vehicle loan reached its highest point on record at $474 in Q1 2014, up from $459 in Q1 2013.

“ ‘As the cost of purchasing a new vehicle continues to rise, consumers clearly are stretching the loan term to help lower monthly payments, keeping them at a manageable level,’ ” said Melinda Zabritski, Experian Automotive’s senior director of automotive credit.

With maturities of seven years or more, car loans might better be called car mortgages. But as the Wall Street Journal report makes clear, it isn’t just lengthened terms that have been required. The report also said that lenders have lowered credit scores while lessors have introduced lower mileage caps. Just as we saw in housing at the top, lenders are doing whatever they can to lower the monthly payments to consumers.

Two weeks ago, I read a quote from the CFO of America’s Car-Mart in which he offered: “Our customers have never been more stressed, yet they have never had more aggressive financing options.”

[wally_bert]

That is good to know in case the axe falls on me out in the woods of lower SC.

[ilovesarah2012]

Well, I’m in the Upstate so you might be on your own. LOL

[Noamie]

My “non-degreed” pops got a job in his very early 20’s as a State prison gaurd and it allowed him to build a home and have a stay-at-home wife with 2 kids.

That same job today pays $18,000 a year.

And many of the applicants have bachelor degrees.

These people getting out of college now were all told that if they did not go to college they would be stupid and broke.

Then everyone from their own parents to the high school guidance counselor told these 17 year olds to “take, take, take” and just worry about it later.

Most of the Juniors in college can’t tell you how much they owe. No joke. The college counselors work to make sure they don’t really advertise it. Then you graduate and they, literally, hand you a bill.

It’s a big moment in growing up.

Then they get out, already in debt, and find out that the Obama economy is solely creating food-service jobs. And, oh hey - everything is about 300% higher in cost than when I left college.

Keep that cap and gown. You’ll need it to keep warm in the streets.

[Organic Panic]

But obama declared all cars to be more effecient and coal fired plants closed. Problam solved.

[Freedom_Is_Not_Free]

The Economic Depression is going on its 6th year. When will it end? I don’t know. All I know is Obama is doing everything to make it worse and last longer.

[Jane Long]

But...but.... but... we keep hearing from the press that the economy’s bouncing back.

---

And, and....that there’s NO inflation. How can this be????

[Texas resident]

Obama, his party and his media are all working in concert to ruin this country economically.

When the shtf, never forget who brought us here.

[moovova]

"To them, higher borrowing, particularly credit card debt, suggests a rebound in consumer confidence stupidity is finally here."

There...fixed it.

[Freedom_Is_Not_Free]

100% true. My own opinion is Obama was installed by Soros to do the bidding of the UN, which is deprive the USA of its international influence, which means ruining our economy so we can’t afford to influence world affairs.

Whatever the reason, Obama is intentionally destroying our culture and economy and shoving us toward true socialism.

[DannyTN]

"On the whole, the economy has been screwed up for over a decade...."

I think it's been screwed up longer than that...back to the 60's when we lowered the import tariffs. It's just the effects of the policy change weren't felt immediately. Real wages stagnated. Industries started leaving back then.

Those dang labor unions tried to warn us. But in the 60's and 70's, they were evil and greedy. Pushing for wage increases the rest of us could not afford made them the bad guys. They tried to warn us about the North American Free Trade deal too. But we wouldn't listen. Free trade would result in specialization and comparative advantage and everyone would be richer.

Republican Henry Hyde tried to tell us. He warned us that England had had their industries devastated by free trade.

It is a full-blown depression, ....that you just won’t admit it’s that bad.

I agree that it's bad. The unemployment certainly reached depression levels. But the term "depression" had a specific meaning and measure that most, not all, economists agreed on when I went to college. It was based on GNP and a depression needed a 10% decline. GNP only had 6% thanks in part to the FED pumping. (and possibly bad reporting)

Government receipts dropped 17%, but that reflects some tax policy changes in addition to the recession.

[Theophilus]

Obama is intentionally destroying our culture and economy

I don’t think he has that power. We are doing it to ourselves every time we take a seven year loan paying $740 a month for a car and many other economically maniacal practices.