Are auto loans driving Americans into debt?

Unless you live in New York City, owning a vehicle has become an American necessity. Most of us depend on wheels for commuting, transporting precious cargo, and for delivering basic living supplies to and from our homes. According to 2000 Census Data, the average household purchases ten to twelve vehicles in a lifetime. 

Kelly Blue Book states that average prices for automakers’is increasing due mostly to demands of fuel efficiency and high-tech safety features. In April 2015, the averagetransaction price of a new car or truck was $33,500. Pricey trucks and SUV’s such as the Chevy Suburban and Cadillac Escalade continue to be favorites. Observe any Milwaukee area parking lot; the majority of cars are less than 5 years old! Are we purchasing more vehicles than we need, and more than we can afford? Is your nice ride eating a big chunk of your paycheck?

Dealers make it easy to spend more than we can afford

Just about every TV commercial break has an auto-related ad. The industry tempts consumers into new buying that new car when maybe it’s not really needed to begin with. Purchasing a vehicle that doesn’t get good gas mileage because gas prices are low today means you’ll pay that much more for your commute when prices go back up. When the market allows for it, manufacturers offer attractive loan rates to push sales, but can we really afford the long-term and full cost of the car? Those extended loan times make the purchase appear more affordable. (Ex: Financing for more than five years will typically allow payments under $500.) This may seem affordable, but these long-term payoffs never get the buyer to the point whereby the car is worth more than what is owed. The 97-Month Car Loan Is The Craziest New Car-Buying Trend.

What happens to my vehicle if I file bankruptcy?

You don’t have to surrender your vehicle. If you find yourself in financial trouble, contact an affordable bankruptcy attorney right away. They can stop repossession of your car through an automatic stay. Your local bankruptcy attorney has the experience negotiating with auto lenders. A good bankruptcy lawyer can also discuss the possibility of reaffirming your current car loan which may reduce car payments and allow you to both afford, and keep your vehicles.

Wisconsin Bankruptcy Attorneys

Chapter 7 bankruptcy is often referred to as a short period “liquidation” process allowing a person to discharge debts. (The process typically takes about five months.) Once that period is over, you will come out of Chapter 7 debt-free. Chapter 13 also provides options to reduce your auto loan. Debt Advisors can help you decide which direction is best for your situation, guide you through the bankruptcy process, and help you avoid common mistakes. Begin by scheduling a free initial consultationto find out if you may qualify for Chapter 7 or Chapter 13 bankruptcy.