April 26, 2020 | Wave of Repossessions Coming as Subprime Auto Buyers Miss Payments

Subprime car lenders report a sharp drop in auto loan payments.
Credit Acceptance Corp., the lender to car buyers with subprime credit scores, warned it’s seeing a sharp drop-off in payments as people shift their financial priorities to get through the coronavirus pandemic.
As unemployment soars, borrowers are putting off payments or “reallocating resources,” Credit Acceptance said in a regulatory filing Monday, explaining that it needs more time to publish a quarterly report. New lending is also slowing as dealerships across the U.S. are forced to shutter their lots, the company said.
Ally Financial Inc. said on Monday that about 25% of its auto-loan customers have taken advantage of its payment-deferral program.
Forbearance Masks Problems
The filing by Credit Acceptance shows some consumers already can’t keep up.
Meanwhile, loan applications have plunged as dealers have closed their lots.
Mish
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Mike 'Mish' Shedlock April 26th, 2020
Posted In: Mish Talk