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Yahoo
17 hours ago
- Automotive
- Yahoo
Access to credit is tightening — here's what it means for your next auto loan
Access to credit is tightening for all consumers, but particularly for consumers with subprime credit scores of 699 or lower. Both new and used vehicle prices remain high, and approvals for subprime borrowers decreased sharply in April, continuing a trend from 2024. Pre-tariff inventory is declining, and vehicles manufactured or imported with the Trump administration's new tariff policies are expected to send prices higher. Subprime borrowers may still be able to buy a car by seeking out used vehicles, exploring banks or credit unions and considering private party purchases. Auto sales from April and the first part of May saw an uptick from February and March, but they are expected to dip as existing vehicle inventory is depleted and new tariffs affect vehicles arriving on car lots. While experts agree tariffs will increase vehicle prices, no one is sure exactly when these increases will happen — largely because the auto market moves slowly. The true financial impact may not be clear for months to come. At the same time, auto loan delinquencies have been increasing. According to TransUnion, delinquencies in the fourth quarter of 2024 rose to 1.47 percent, exceeding a high set in 2009 during the Great Recession. Lenders are responding by becoming more cautious with who they extend auto loans to. Denials are increasing for those with subprime credit, and interest rates are rising for all borrowers except those with excellent credit. Unless you need a car in the near future, it may make sense to wait or consider leasing. In the meantime, you can focus on building your credit score to ensure you qualify for what is likely to be a tight market. The average credit score required for new auto loan approval has also been increasing. During the fourth quarter of 2024, lenders favored borrowers with good to excellent credit by offering lower interest rates, according to Experian's State of the Automotive Finance Market. Interest rates for subprime borrowers increased while approvals decreased, leading to a gap in affordable financing. Average interest rates by credit score New car loans Used car loans Super prime 4.77% 7.67% Prime 6.40% 9.95% Near prime 9.59% 14.46% Subprime 13.08% 19.38% Deep subprime 15.75% 21.81% Source: Experian State of the Automotive Market, Q4 2024 Rate of approval by credit score New car loans Used car loans Super prime 48.87% 22.57% Prime 36.57% 37.01% Near prime 10.88% 18.75% Subprime 5.27% 18.81% Deep subprime 0.41% 2.86% Source: Experian State of the Automotive Market, Q4 2024 David Thomas, director of content marketing at CDK Global, says that auto loan access has been 'impacted by general credit trends.' He notes that credit access — and credit denials — are at their highest points in a decade. Cox Automotive data shows this trend is continuing. April data indicates that the share of subprime borrowers decreased by 280 basis points, or 2.8 percent, year-over-year, and qualifying with poor credit may become more difficult if the cost of vehicles rises significantly. Auto loan approval rates increased by 20 basis points, or 0.2 percent, in May, according to recent data from Cox Automotive. But while approval rates increased overall, they decreased sharply for those with subprime credit. This aligns with Experian's data, which showed that the average credit score of borrowers purchasing a new vehicle has increased from 744 in 2020 to 755 in late 2024. The trend is similar for used vehicles, with the average credit score increasing from 681 to 691 over the same period. 2020 2021 2022 2023 2024 Average credit score for new car loans 744 746 750 755 755 Average credit score for used car loans 681 684 687 691 691 A number of factors could be making lenders wary of borrowers with weaker credit. Historically high car prices coupled with high interest rates have made affordability an issue for most consumers. An increasing number of those consumers have chosen longer loans to offset high prices, even though longer terms are correlated with higher delinquency rates. Now, with tariffs and inflation looming, many lenders are seeking borrowers that present less risk. A recent report from Santander Bank shows that, in the first quarter of 2025, close to half of middle-income Americans delayed purchasing a vehicle in the past year due to cost. That pent-up purchasing power was released in April and the beginning of May, when demand for vehicles increased. This demand raised the average price of new vehicles to $48,699, a 2.5 percent increase from March, according to a Kelley Blue Book report. This was a significant uptick from the typical 1.1 percent increase expected from April sales, which are often fueled by tax refunds. Bankrate's take: Many experts don't believe these numbers will last. Vehicle prices are expected to increase in the coming months as pre-tariff automotive stock dwindles and new models arrive on car lots. Meanwhile, the Manheim Used Vehicle Value Index (MUVVI), which tracks the price dealerships pay for used vehicles, increased by 2.7 percent from March to April. This indicates the price of used vehicles is increasing, which may explain why used vehicle sales dipped. With a shortage of inventory and increasing demand, it seems likely that the price of used vehicles will stay close to the price of new vehicles. To get the most value — and a manufacturer warranty — look into a certified pre-owned (CPO) car. Despite what may feel like an uphill battle, consumers shopping for a vehicle can still find ways to find car loans for bad credit and buy an affordable car. Pre-tariff 2024 and 2025 vehicles are still on lots for the time being, and buyers can time their purchases around traditional holiday car sales like Memorial Day and Labor Day. And while rates are high for those with less-than-perfect credit, exploring new financing options is a helpful way to find a good deal. 'I would say explore credit unions, look beyond just banks,' advises Sean Tucker, Lead Editor at Kelley Blue Book. Historically, credit unions have been more willing to work with borrowers with subprime credit, and typically, auto loans from credit unions offer some of the lowest interest rates. This is backed up by Cox Automotive's data, which showed that in April credit was most accessible through credit unions. Another option is a bad credit auto loan, but consumers should keep in mind that these loans often have high interest rates and more fees than other auto loans. Subprime borrowers can expect an interest rate of around 13 percent for new car loans and a whopping 19 percent for used cars. Those in the deep subprime category fare worse, and some may face an interest rate over 21 percent. For now, average car loan interest rates are likely to remain high, further exacerbating the lack of affordable options in the auto market. Tucker also advises buying a used car privately. 'Private party purchases are always cheaper than what's on the sales line.' Buying privately doesn't always require you to have cash for the car, either, since private party auto loans are available from select lenders. Still, lenders set similar eligibility requirements, so it may be difficult for a subprime shopper to qualify for a private party auto loan. As always, consumers will benefit most from paying down debt, catching up on unpaid bills and focusing on rebuilding credit. This process takes time, so while it may not be the fastest way to get behind the wheel, it is an important step to access credit at a lower interest rate in the future. By building your credit score, you may be able to qualify for more competitive rates in the future, regardless of how the auto industry shifts. The current auto market isn't great for buying for a number of reasons, particularly for those with low credit scores or no credit history. Yet there are still options for those in need of auto financing. Credit unions and private party purchases may be the right course for an affordable car payment, but it doesn't hurt to build credit and wait out the market. The auto industry plans years in advance, so a few bumpy months won't necessarily lead to a bleak, unaffordable future for vehicle financing. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
a day ago
- Business
- Yahoo
Joe Rogan Calls Student Loans A Scam 'You Cannot Absolve Even With Bankruptcy.' Says 'It's The Dirtiest Thing Ever'
On a recent episode of 'The Joe Rogan Experience,' British comedian Jimmy Carr joined Joe Rogan for a wide-ranging conversation that took a serious turn when they began talking about corporate greed, education, and the crushing weight of student debt in the U.S. Rogan didn't hold back when discussing the way student loans trap young people. "It's the one debt you cannot absolve in America even with bankruptcy," he said. "It's a scam. It's the dirtiest thing ever." Don't Miss: Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — 'Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. Carr agreed and argued that the U.S. and U.K. should cancel student debt altogether. "We mis-sold people some bullsh*t degrees," he said. "You're taking those people that took a chance and they went to university and they gave their time and they studied hard ... and then they can't buy a house because ... [their degree is] not in a STEM subject, it's in the humanities or something, and they don't get the lifestyle they worked hard for." Carr also pointed out that while socialism is often treated like a dirty word, most people accept its role in essential services like fire departments and public schools. "Everyone agrees, right?" he said. "If your house burns down, we're going to have a fire service. It's not like, 'Oh, we don't take care of that.'" Rogan added that corporations rarely aim to do good once they're public. "They never are satisfied," he said. "They never go, 'Guys, we're doing great. If we just make this amount of money every year, like, that's wonderful. Let's just hang back. I think our profits are very high. Let's do good.'" Trending: Invest where it hurts — and help millions heal:. The two also talked about how student loans mostly burden middle- and working-class kids, locking them out of upward mobility. Carr described education as a social equalizer. "The opportunity to educate yourself and to do better is like—that's sort of part of the American Dream, isn't it?" he said. Rogan agreed and noted that 18-year-olds often don't understand the long-term consequences of debt. "You're too young to be connected to a $50,000 debt when you're 18. You don't know what it means," he said. "The fact that it's going to follow you around forever and haunt you... I think it's evil."Their discussion comes as the federal government resumes collections on defaulted loans for the first time since 2020. The U.S. Department of Education reports that 42.7 million borrowers owe over $1.6 trillion in federal student debt. Only about one-third of those borrowers are currently making regular payments. According to a TransUnion report earlier this month, 20.5% of borrowers with payments due were more than 90 days late as of February. That's nearly double the 11.5% delinquency rate from February 2020 before pandemic relief began. Borrowers who defaulted saw their credit scores drop by an average of 63 points, with some super prime borrowers losing as much as 175 points. Experts warn this could make it harder to get loans, buy homes, or even rent. Read Next: Deloitte's fastest-growing software company partners with Amazon, Walmart & Target – UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? APPLE (AAPL): Free Stock Analysis Report TESLA (TSLA): Free Stock Analysis Report This article Joe Rogan Calls Student Loans A Scam 'You Cannot Absolve Even With Bankruptcy.' Says 'It's The Dirtiest Thing Ever' originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Time of India
a day ago
- Business
- Time of India
India's Fintech sector projected to grow with focus on product expansion, risk control, and inclusion
. India's Fintech industry is growing with emphasis on safer lending, financial inclusion, and better risk control, according to a recent TransUnion CIBIL report. Fintech-led non-banking financial companies (NBFCs), which operate mainly through digital platforms, had an outstanding loan book of Rs 1.3 trillion by December 2024. This represents a sharp 32% year-on-year growth. Despite holding just 1% of the total loan balance across the lending industry, Fintech firms have made a big impact in small-ticket personal loans (STPLs). Nearly 89% of personal loans under Rs 50,000 originated from Fintech lenders, reflecting their strong grip on this segment. The report also highlights a clear shift towards secured loan products like loans against property and business loans. Business loan originations from Fintech lenders now make up 12% of all such loans in the industry. There is also a visible push toward underserved markets. More young and rural borrowers are turning to Fintech platforms, which is helping to promote financial inclusion. Still, even borrowers with strong credit scores are mostly receiving smaller loans, averaging under Rs 50,000. The report further points out that while Fintech lenders have the potential to grow in higher-ticket personal and consumer loans, they are yet to build lasting customer loyalty outside STPLs. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like [단독] 서울 임플란트 '33만원' 에 가능해 플란치과 더 알아보기 Undo Expanding their product range could help address this gap. There are also rising concerns. Delinquency in business and property loans is increasing, underlining the need for better credit risk monitoring. The report urges Fintechs to use tools like CreditVision, which offer deeper insights into borrower behaviour using trended data. Overall, while India's Fintech sector shows promise, sustainable growth of the sector will depend on how well it adapts to the evolving lending environment—by diversifying its products and strengthening its risk frameworks. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Yahoo
3 days ago
- Automotive
- Yahoo
Delinquencies are on the rise: Here's why and what to do if you get in trouble
Americans who are underwater on their car loans owe record amounts, and lenders are repossessing vehicles at a rate not seen since 2009. Those are symptoms, not the cause. And the most concerning symptom might be rising auto loan delinquency rates. They're at a 15-year high among borrowers who are 30, 60 or more days late on their payment, according to the latest data from TransUnion and an April MorningStar analysis. Plus, figures elsewhere confirm they're on the rise for every delinquency category, from one to three months or longer. As expected, bad credit borrowers see the worst of it: Nearly 6 percent of subprime auto loans are at least 60 days late, the highest figure since Fitch Ratings started its tracking in 1993. So, what's causing these unprecedented levels of delinquency, and what could restore order to the auto loan market? Really, this is one across-the-board trend: Delinquency is growing among borrowers of all credit scores, income levels and ages, and lenders of all types originate these delinquent loans. Yes, subprime borrowers — generally, consumers with credit scores of 600 or below — are the most likely to fall behind on car loan payments. However, TransUnion data draws concerning trend lines for borrowers with better credit, too. While mortgage delinquency rates are similar to pre-pandemic levels, auto loan delinquency transition rates remain elevated. High auto loan delinquency rates are broad-based across credit scores and income levels. Captive lenders, or automakers' in-house financing arms, generally attract higher-credit car buyers, sometimes with introductory APR offers. And yet, the delinquency rates on loans from this lender type remain stubbornly high as compared to pre-COVID-19 figures. Meanwhile, car buyers without good credit remain likelier than their peers to finance a used (or possibly new) vehicle purchase with a non-captive lender. So, it's unsurprising that delinquencies are rising fastest with this type of lender, and even eclipsing pre-pandemic levels. Just as borrowers with the lowest credit scores are more likely to become delinquent on debt, so too are borrowers with the lowest income levels. But even higher-earning groups are falling behind on their monthly dues at increasing rates. If we zero in on serious or late-stage delinquency — being more than three months tardy on a car loan payment — it's hard to dispute that borrowers of every age group are falling behind at increasing rates. Although borrowers in their 20s are more than two times likelier than seniors to become delinquent, you can see the trend lines ticking upward across every generation, according to the New York Fed's quarterly May 2025 report on household debt and credit. The experts we interviewed and the research we're highlighting point to four factors: Average loan amount (Q4 2020) Average loan amount (Q4 2024) Why it hurts New cars: $36,246 Used cars: $22,444 New: $42,023Used: $26,135 Your dollar doesn't go as far at the dealership, car lot or for a private-party transaction. If you go back to 2017… automakers started trimming the cars priced under $25,000 from their lineup, and increasing the number of cars they built with a $60,000 price tag or higher, and they all made the same decision at the same time to essentially say, the way the market was going, 'we're aiming at higher-income, better-credit buyers.' If every [manufacturer] does that, there's just this huge proportion of the market that's underserved. And for inexpensive cars, a lot of people were forced into buying something more expensive than they would have wanted because the inexpensive car doesn't really exist anymore. Average APR (Q4 2020) Average APR (Q4 2024) Why it hurts New: 8.5 percentUsed: 4.3 percent New: 11.8 percentUsed: 6.5 percent You owe more in interest to your lender, monthly and overall. The recent rise in delinquencies over the past four quarters, despite relatively healthy labor markets, is an early sign that certain consumers are under stress from higher cost of living and elevated interest rates on floating consumer debt such as credit cards. Monthly dues Since the end of 2019, average dues are up 30-plus percent, while inflation is up about 23 percent, according to TransUnion. Obviously, if the last time you bought a car was five years ago, your monthly payment was $450, $500, and now it's $740. So, that has had a spillover effect into increased delinquency. One way to think about it: The affordability crisis for car buyers is a delinquency crisis for car owners. After all, your vehicle's cost (see prices, above) is just one line item in your budget. Even after you drive off the lot, inflation can still empty your wallet. In fact, the latest inflation statistics show that gas prices are about 20 percent higher than they were before the pandemic. In addition, other car maintenance costs include: Increased cost vs. 2024 Increased cost vs. 2020 Insurance 6.4 percent 55.3 percent Auto repairs 7.6 percent 56.8 percent As Cox Automotive chief economist Jonathan Smoke reminds us, your income probably hasn't kept pace with the inflation of these car-ownership costs. 'Many [borrowers] had taken out loans when vehicle prices, both new and used, were at their absolute peak in 2022 and 2023,' Smoke says. 'Then inflation took off, and for the better part of almost two and a half years, inflation w[as] producing a negative income situation, meaning [that] while incomes were going up — at a good clip by historical standards — unfortunately, inflation was even higher.' Learn more: 3 auto loan industry experts discuss the ups and downs to come As Smoke says, the way out of a continued rise in auto loan delinquency 'is to see the consumer's financial position improving.' And that very well could happen. If the impending trade war doesn't come to fruition, if tariffs turn out to be more bluster than substance, and if the labor market remains stable (at least for the employed), your income should outpace diminishing inflation. But that might not mean much if you're already on the edge of delinquency. 'When you have a large amount of negative equity, your options, when you run into a financial challenge, are more limited,' Smoke says. 'It's harder for the lender to find a way to work with you on the loan, and you don't have great alternatives to sell the vehicle and trade down to something smaller if you owe more than the vehicle is worth.' With that said, consider these tips: Stay in contact with your lender. If you feel you may be at risk of missing monthly payments, contact your lender as soon as possible. Most lenders would prefer to avoid repossessing your vehicle, so keep track of financial documents and maintain lines of communication. Request loan modification. Modifying your loan to get a lower car payment can help your lender avoid repossession-related expenses. You may be able to defer a few payments or shift your term to better fit your budget. However, not all lenders offer auto loan hardship programs. Work to pay off the loan. Catching up on payments may help you avoid repossession. This can be one of the most challenging approaches, but if there's room in your budget, it can dramatically help. Sell the car. If you can't afford your monthly payment, selling your vehicle is another way to exit your loan. Ensure that you aren't upside-down on your loan before choosing this route. If you owe more than your vehicle is worth, trading it in is also unlikely to be an option. Consider refinancing. Changing your loan to get a better rate or term can lower your monthly payment. But if you have missed many payments or are in default, you won't likely qualify for refinancing. Surrender your car. You can choose to surrender your vehicle — known as voluntary repossession — if you can no longer pay. Unfortunately, it'll still negatively impact your credit. However, if you've maintained open communication with your lender, it might be more willing to write a goodwill letter that can minimize harm to your credit. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CTV News
3 days ago
- General
- CTV News
Federal privacy commissioner launches investigation into NS Power data breach
The Nova Scotia Power headquarters is seen in Halifax on Thursday, Nov. 29, 2018. The Office of the Privacy Commissioner of Canada has launched an investigation into the data breach at Nova Scotia Power that affected hundreds of thousands of customers. Privacy Commissioner Philippe Dufresne said Nova Scotia Power submitted a breach report to his office. After receiving complaints about the breach, he started an investigation under the Personal Information Protection and Electronic Documents Act. 'We are actively engaging with the organization to ensure that it is taking appropriate steps to respond to the incident, and my immediate focus is on ensuring that the company is effectively addressing the breach and protecting the personal information of its customers,' Dufresne said in a news release. 'This includes breach containment, notification and measures to reduce risks to those affected.' Last week, the power utility said it was the 'victim of a sophisticated ransomware attack' on March 19. A spokesperson said roughly 280,000 customers were impacted by the breach. The utility detected 'unusual activity' on its network on April 25 and launched an incident response plan. Nova Scotia Power has indicated the stolen information could include names, phone numbers, addresses, birth dates, social insurance numbers and bank account information. The utility has arranged to supply affected customers with a two-year subscription for a credit monitoring service through TransUnion at no cost. 'Data breaches have surged over the past decade and this incident highlights the growing risks of cyberattacks for all organizations,' Dufresne said. 'Prioritizing information security is essential to respond to a threat environment that is continuously evolving.' NS Power The Nova Scotia Power headquarters is seen in Halifax on Thursday, Nov. 29, 2018. (Andrew Vaughan) For more Nova Scotia news, visit our dedicated provincial page
