Loans were extended and not paid. Cars value depreciated but the principal of the loan wasn’t paid down so people were upside down on car loans.
How soon until Brandon comes out with a repo moratorium? After all, minorities and LGBTQ hit the hardest. /s
That is correct. It’s also what happens when a loan repayment period so long that it is impossible for the car value to ever be equal to the loan.
It also happens a lot when buyers are distressed so they buy another car and roll over the loan into the financing of the new car. Common practice for people that are always in over their heads. Lenders still share the blame.
Car loans “should” require sufficient down payment that the value of the loan will not exceed the value of the depreciating car.
you just described every car loan pre-covid..
until the shortage very very few cars are worth more than the day you bought it.
maybe things are starting to return to normal.