Here are ways to prevent a 23% increase in car repossessions.
Car repossessions in the US have increased by 23% compared to the previous year, despite the fact that the issue is not related to carburetors or brake pads. A July 2024 Cox Automotive report reveals that this is 14% higher than the pre-pandemic levels.
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Repossessions typically occur when you fail to make your car payments, usually by two to three months. The car market has faced various challenges this year, including declining prices at the start of the year and a widespread cyber attack in June. However, recent data shows that used car dealers have seen positive signs, with wholesale used-vehicle prices increasing by 1.8% in the beginning of June, representing a modest growth. According to Edmunds, the June 2024 APR for used and new vehicles was 7.3% and 11.5% respectively.
How to avoid delinquency on your auto loan
Recently, car loan interest rates have reached their highest levels in years, resulting in more expensive loans. Higher interest rates can increase the likelihood of delinquencies. If you find it challenging to make your monthly payments, there are several ways to prevent delinquency on your auto loan.
- Communicating with your lender may help you avoid repossession and find a payment solution.
- Explore refinancing possibilities for your car loan to potentially secure a lower interest rate or modify your payment plan for greater financial ease.
- If you sell your car, you can use the proceeds to reduce your loan balance, even though you'll still be responsible for paying off the remaining amount. The amount you receive from selling your car may not completely cover your loan, but it can help.
If you have poor credit and want to obtain a car loan, there are available options that may suit your requirements.
If you're looking for the best rate on an auto loan, MyAutoLoan could be the perfect choice. After completing a short form, you'll receive up to four pre-qualified loan offers with APRs starting at 5.01%. Plus, MyAutoLoan only performs a soft credit check, so you can compare offers without negatively impacting your credit score.
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