Clunkers Buyers May Have Some Regrets, Late Payments

Dealer
Higher credit risk buyers who bought a car using the Cash for Clunkers incentive last year have higher repossession and late payment rates and higher levels of buyer's remorse than buyers who did not use the program, according to CNW Research.

Those in the lowest credit category had a 4.8% repossession rate compared with those who bought similar vehicles without using Cash for Clunkers, which stands at only 2.2%. CNW could not discern if buyers in higher credit categories also have higher repossession or late payment rates.

When it comes to regretting a purchase, one in five who used the government’s $4,500 incentive said they now wish they hadn’t. The buyer's remorse rate for non-Clunkers buyers was one in 20.

It makes sense that more subprime borrowers would have difficulty making their payments. The regret could also be attributed to people who bought vehicles but have yet to see better jobs or wages materialize in a still-sluggish economy.

Many Cash-for-Clunkers Buyers Have Higher Rep, Late Payment Rates (DriveOn)

By Stephen Markley | January 22, 2010 | Comments (13)

Comments 

skinner

Big surprise...
Wasn't this predicted by many, umm, about 6 months ago???

GR

Just wait till their cars have 60,000 miles on them and need a $700 timing belt and a $130 transmission flush in addition to the regular maintenance.

Tony

GR,

hm, not sure. These new cars have timing chains and transmissions where you don't need to replace the fluid. But tires could be expensive. And for that, again, thank you, mister president.

Mike

I've always had a problem with C4Clunkers. It goes against simple supply and demand logic. We're pushing new cars into a market already saturated with countless used and repossessed cars (i.e. repofinder.com). Now new cars depreciate faster, more Americans are in debt, and more repossessions are on the horizon.

Derrick G

This article leaves out a hugely important piece of information: what percent of C4C buyers were in that credit group. Without knowing that, there's no way to know how widespread the problem is.

jim

So, many people with decent, running cars that were paid for, now have 5 years of payments, just to save a buck or two on gas. Plan never made sense to me?!?

K

They are the very same low-life @#$%^&* who bought the gas-guzzlers back then.
You would expect them to have the intelligence to understand what is a car payment?

DaveInLBC

It surprises me how easy it is to get an auto loan; especially if you have good credit. I have kept my credit spotless and never been asked for income verification when buying or leasing a car! You tell them how much you make, they check your credit; done. Maybe if they actually "qualified" buyers, they wouldn't repo so many cars.

PHXman

I couldn't agree more with K's statement

Troy S.

This means there will be a flood of repo'd cars for sale to those who didn't participate in the C4C program.

DL

LOL @ K's comment!!!

at risk of being too trite, i'll say that we are just lemmings. otherwise known as, monkey see (people rushing to trade in clunkers), monkey do (the same thing whether it's a good idea or not).

Aussie

OMG!!!!!! They used a picture form Australia, that second car, the blue one is a 1996 Ford Falcon =D wow

vulcher

So where do you buy these repos. I need a low dollar used car.

Post a Comment 

Please remember a few rules before posting comments:

  • If you don't want people to see your email address, simply type in the URL of your favorite website or leave the field empty.
  • Do not mention specific car dealers by name. Feel free to mention your city, state and brand.
  • Try to be civil to your fellow blog readers. This blog is not a fan or enthusiast forum, it is meant to help people during the car-buying process and during the time between purchases, so shoppers can keep a pulse on the market.
  • Stay on topic. We want to hear your opinions and thoughts, but please only comment about the specified topic in the blog post.
view posting rules

If you have a TypeKey or TypePad account, please Sign In

Search Results

KickingTires Search Results for

Search Kicking Tires

KickingTires iPhone App
Ask.cars.com