Auto Lenders Problem
As we all know already our economy has been on the downslide for quite some time now and there really are not a lot of signs that things will turn for the better in the near future. Adding to this problem I have read an interesting article about some problems the auto lending industry are facing. Due to the continuing rising levels of unemployment and our sinking economy many people can no longer afford to pay off loans and because of these loan delinquencies the auto lending industry are “feeling the squeeze” as mentioned in the article. Also, although the gas prices have been dropping in the past few weeks, less and less cars and trucks are being sold and this certainly is another factor to why auto lenders are losin out. Here are several statistics to show this downward slide that the auto lending industry is currently in. Capital One, which we all know is a credit card company and is big in the auto lending sector saw profits drop 11% which is equivalent to $4.4 million. Another business involved in auto lending, AmeriCredit Corp. saw their profits drop by $150 million. I felt like this was a very interesting article and it really does show that all the different industries are being negatively affected by the recession that we are currently in. The link for this article is below
http://money.cnn.com/2008/09/04/news/companies/auto_finance/index.htm?postversion=2008090410
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Since I have been back at school I have noticed the amount of students and faculty riding bicycles around campus. When looking at the comment about Auto Lender Problems, it made me wonder how the bicyclical industry is doing. Since less people are taking loans out for cars and no one wants to pay for gas I am interested to see how the bicyclical industry does in the near future.
mfschoeneck - September 4, 2008 at 3:41 pm
Americans have accepted debt as a way of life, somehow people feel its ok to just pay minimums on their credit cards, tuning out of the reality that the remaining balance is still accruing interest.. which is why the credit card companies allow this to happen.. maybe if the credit companies were more strict they would see some results regardless how small
scottlepkofker - September 4, 2008 at 3:46 pm
Not only in the United States, but also the whole world is facing the economic crisis. The auto lenders might just get shut down by the point that most people don’t want to drive cars. I guess the industries which are producing bikes are growing fast now. Maybe this economic crisis is graduately changing the structure of our society, but not so soon.
mingliu2010 - September 10, 2008 at 6:44 pm