- Created: Thursday, 30 June 2016 21:29
By Ian R. Leavengood
As many of us can still feel, see or are just recovering from the effects of the Great Depression of this era, most do not want to hear the “R” word again. Unemployment is down, the stock market is up a bit and gas prices and interest rates are still low. So how can there be talk of another recession? Consumers are driving into debt. Consider the following:
- Post-recession, the need to replace aging cars spiked demand for new cars.
- Banks and dealerships were eager to offer 0% financing on new cars.
- Average term of car loans—that affects the monthly payment—increases to 68 months.
- Average car loan is now in excess of $30,000.00.
- Average monthly car payment is now over $500.00/month.
- For every $1 of new car purchase, 86 cents is borrowed money.
With auto sales at a record pace, the amount of money borrowed on automobiles in the United States has hit record levels. Sound familiar? Stated interest loans, for 40 years, with people borrowing money that required payments that they couldn’t afford . . . all on assets highly leveraged with little to no equity? Are we looking at the real estate collapse of 2008-2013 just with automobiles as the collateral?
A study by Interest.com in 2014 showed that the average household in 24 of the largest 25 metropolitan areas in the United States cannot afford to pay for the average-priced new car or truck. To cause further concern, it is not just car loans that are problematic. A new credit card debt analysis by Credit-Hub projects that we will end 2016 with $1 trillion in outstanding balances – a threshold never before reached, not even during the great recession. Throw in the student loan crisis that is on the horizon, and American could again be in trouble with debt.
If you, your family or someone you know are experiencing troubles with debt or credit, the attorneys at LeavenLaw can help you. We have spent our careers perfecting our trade as debt and credit lawyers. Whether you need to settle debt, defend a lawsuit filed against you to collect a debt, or, in the worst case scenario, discharge debt, we can help. Please feel free to give the attorneys at LeavenLaw a call to schedule your free consultation. 1-855-Leaven-Law (1-855-532-8364) www.LeavenLaw.com