Car Loans Reveal Complacent Borrowers
A reader posted this AP story that has implications for the housing bubble. It demonstrates how easily average borrowers plunge into financial situations that are not in their best interest. "A growing number of new car buyers are finding they owe more on their existing car loans than the vehicles are worth as trade-ins.The phenomenon, known as being "'upside down" on a loan, is the result of a confluence of changes."
And as the size of the problem is great, consider how much more devastating it will be when large numbers of home owners develope negative equity. "'More than a quarter of buyers are upside down when they come in, and the average is nearly $3,800,' said Bob Kurilko."