Detroit Free Press: $4 gas is forcing late car payments

[marmar]

$4 gas is forcing late car payments
Loan delinquencies to climb, analyst predicts
BY SUSAN TOMPOR • FREE PRESS COLUMNIST • July 6, 2008



Could gas at $4 a gallon or higher be one of the culprits behind late car payments, too?

Mark Zandi, chief economist at Moody's Economy.com in West Chester, Pa., said auto loan delinquencies will keep climbing for another 12 months. By his estimate, auto delinquencies would hit a peak in the second half of 2009.

His reasoning? We'll be looking at a weaker job market, falling values for SUVs and trucks, high levels of debt -- and yes, budget-busting gas prices.

Think of it this way: If some consumers are already paying an extra $65 to $70 a month to put gas in one car, they have even less money to put toward a $400 or $500 monthly car payment.

And what happens at $5 a gallon?

Late loans rising

Auto delinquencies have been on a fairly steady uptick.

The percentage of auto loans 30 days or more overdue hit 1.92% in the first quarter -- up from 1.9% for the fourth quarter of 2007 -- for loans made directly to the consumer by banks or credit unions, according to the American Bankers Association's Consumer Credit Delinquency Bulletin. The percentage was 1.68% for the first quarter of 2007.

The percentage of overdue auto loans hit 3.09% for loans made through auto dealers or third parties, according to the American Bankers Association. That's down from 3.13% for the fourth quarter in 2007.

However, auto delinquencies for loans made through dealers have shot up since late 2004 when the rate was 1.35%. .......(more)

The complete piece is at: http://www.freep.com/apps/pbcs.dll/article?AID=2008807060589

[jimshoes]

1. Who could have anticipated that?

Who does all this hurt/help when the economy melts down completely? Will it be enough that bushco blames it all on the incoming Dem administration or will someone actually hold chimpco* and the big dick and his greedy pig oil pals accoutable for killing the "American Dream" so they can have all the money there is?