December 8, 2023

Car Auto Finance

Car Auto Finance FOR Everyone

Drivers could see used cars worth much less as sky-high prices fade

Drivers who took on auto loans at high interest rates and paid sky-high prices for cars could face some headaches down the road as car values pull back in an economic slowdown.

The car you’re looking to trade in — particularly if you bought a used car — could be worth far less than you’d imagine. And lenders are growing more concerned about people falling behind in their car payments, especially if that car drops significantly in value.

The outlook is most worrisome for borrowers with subprime credit scores who bought used cars as prices and interest rates hit a peak.

“They often go and purchase a vehicle because they really need it,” Satyan Merchant, senior vice president of the auto business at TransUnion, told the Free Press.