The Expert Podcast

So, automotive lenders are starting to feel the pinch of the economy, inflation, employment, and also these high car payments. One of the major lenders, Automotive Credit Corp, is basically going out of business. Uh they are pausing all originations indefinitely, effective immediately. This was August 7th, a couple days ago. So, what does this mean? Well, automotive financing has been around for almost a hundred years and it's designed to allow consumers to purchase a vehicle that they don't have the cash saved up for.

The problem with it is if the lending guidelines do not match the expected uh payment capabilities, the loans are going to go bad. They're going to be delinquent loans. They're going to be charged off loans, non-performing loans. So lenders have to balance being aggressive with their guidelines, but also being conservative so they don't get um caught short when people can't make their payments.

So if you have, as you do now, 20% of all consumers have car loan payments over $1,000, that means one out of five people have a car loan with a loan monthly payment of $1,000 or more. That's that's incredible. And lenders are starting to realize that there's pressure from the economy on people being able to make these payments. Some of it has to do with inflation of other expenses that go up to take more of the money away. Some of it has to do with employment being difficult. Some of it has to do with a reduction in workforce because of AI. And these automotive lenders are now panicking like, well, how are we going to get out of this?

Well, if you have a car loan, which is excessive, you you have a payment you can't afford or have a car that you don't uh have the ability to use anymore, the problem is you probably have what's called negative equity. You owe more than the car is worth. If that's the case, difficult to sell, right? Because if you owe 30,000 on a car and it's only worth 20, where's that other 10,000 going to come from? Well, that's where a car short sale comes in. uh you can work on a process where there may be some add-ons. There probably are add-ons and you will be back in your video in just a few seconds. In the meantime, remember that actualhum.com offers you live one-on-one private video consultation with an expert in this exact subject. We want to listen to your story. We want to hear your questions. We want to give you expert advisement of your options and tell you what we know about your particular situation. Now, back to your video.

Extra fees that were added onto your loan that you didn't um clearly uh acknowledge. You may not be aware that there could be three or four or $5,000 worth of add-ons tacked onto your loan which were not part of the original car price. There are things there are protection plans and packages and GAP and all these other add-ons that they do in the finance office. Those normally can be removed from your loan. Uh you have to go through a process. They don't make it easy. You have to do paperwork and identification and that kind of thing. But if you remove those, let's say it's three or $4,000. Now your loan isn't $30,000 anymore. Now maybe it's 36.

At the same time, the value that you've been getting for your car from the dealer is a wholesale value. They're saying, "Your car is only worth 20. Here's the book value." And they're going to walk around the car, point out every chip, every ding, every thing wrong with it, and they're going to convince you that it's only worth 20.

However, there are resale markets that you can get more money. Now, that's not a retail market. Retail is the end user that buys the car that they drive it off into the sunset. A resale market is a market of brokers and networks that take these cars and they resell them, but they're not the same as a dealer, right? They can pay you more money. So maybe the resale market instead of 20 might be 22 or 23. Well, now if you take 23,000 against 26, now you're only $3,000 out of equity, negative equity. That might be easier to digest. Maybe you can roll that into the next vehicle. Maybe you have that saved up. In many cases, you could refinance that or get a get the lender to take payments on that.

The lenders know this is coming. That's why this finance company is basically shutting down because they know that they can't do more loans because they're going to be in in rough shape down the road. So, if you have a car loan which is excessively high, you owe a lot of money on it, your payments are high, take a look at the link below, carshortsale.com. It'll give you some ideas and there's a free guide, a free instructions on how to do all this, which you can use to escape the payment on your vehicle, not have to worry about being buried in your car and having all that negative equity affect your budget.

Thank you for watching another episode of Actual Human Advisory on Describe TV. Remember, we have live one-on-one consultation appointments available at actualhum.com where you can book a one-on-one undivided attention live call with a licensed investigator, a licensed insurance broker, a licensed mortgage broker, real estate broker. Uh I'm also a certified real estate title examiner, a certified civil court mediator. along with having developed and started over 15 businesses, several of which were sold for millions of dollars. So, if you do have questions in any of those categories, you can arrange a one-on-one live video consultation. Use the link below and we'll see you on the next