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Guess How Many Americans Now Have Auto Loans

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Article source: http://host.madison.com/business/investment/markets-and-stocks/guess-how-many-americans-now-have-auto-loans/article_627998e2-4695-50ed-9c50-4abceb3ed70c.html

Guess How Many Americans Now Have Auto Loans

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Article source: http://host.madison.com/business/investment/markets-and-stocks/guess-how-many-americans-now-have-auto-loans/article_627998e2-4695-50ed-9c50-4abceb3ed70c.html

Guess How Many Americans Now Have Auto Loans

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Article source: http://host.madison.com/business/investment/markets-and-stocks/guess-how-many-americans-now-have-auto-loans/article_627998e2-4695-50ed-9c50-4abceb3ed70c.html

EPA’s Lawsuit Against VW Kick Started A Crusade Against The Auto Industry

The Environmental Protection Agency’s (EPA) initial lawsuit targeting Volkswagen’s fuel emission scandal has spawned a slew of similar lawsuits, including one that does not appear to have the agency’s backing.

EPA’s successful investigation and lawsuit earlier this year against the German company has prompted vehicle owners to sue General Motors and Fiat Chrysler, with the former having received permission from the agency to produce a slew of diesel vehicles.

VW pleaded guilty in March to charges from “diesel gate,” which affected more than 500,000 vehicles and cost the automaker billions of dollars. VW was sentenced to three years’ probation and forced to pay billions of dollars in penalties.

The company admitted in 2015 to installing so-called defeat devices in hundreds of thousands of diesel-powered vehicles in the U.S. The Bosch devices would activate during road conditions when emission measuring tools were not engaged.

VW agreed to spend up to $25 billion in the U.S. to address the scandal – it also was tasked with recalling and fixing the tainted vehicles. The company was sentenced to three years of probation and forced to pay billions of dollars in penalties. EPA officials championed their victory over the company last year.

“Individuals with VW are being charged to show that those who commit serious crimes will be charged with face serious charges,” former EPA administrator Gina McCarthy said in a statement shortly after a court penalized the company. Regulators keeps big corporations from running rough shod over American consumers, she added at the time.

But government officials weren’t happy with taking down VW. They pursued Fiat shortly thereafter. The Department of Justice filed a lawsuit against the Italian auto company and claimed it used similar emission-cheating software as its German counterpart.

Fiat affixed “cheat devices” to 104,000 light duty diesel vehicles that were not disclosed to regulators during the certification application process, according to the lawsuit, which was filed on behalf of the EPA.

The lawsuit also alleges the automaker equipped late-year Grand Cherokees and Dodge Ram 1500s with at least eight software-based features that curtail the vehicles’ emission control systems. The devices allowed the vehicle to push out higher levels oxides of nitrogen than the EPA permits.

Unlike VW, Fiat has maintained its innocence. Company officials told reporters that they plan on fighting claims “it engaged in any deliberate scheme to install defeat devices to cheat U.S. emissions tests.”

One of the law firms that represented vehicle owners in their pursuit of VW and Fiat has turned its ire against GM. Hagens Berman Sobol claims the Detroit-based company affixed 705,000 late-model Chevrolet Silverado and GMC Sierra pickups with at least three so-called defeat devices to dupe air regulators.

Hagens’ nearly 200-page complaint contains about 85 of references to VW, and claims the environmental damage from the diesel-powered truck could surpass by magnitudes that of the German automakers.

GM denied installing any such devices, and a spokesman Dan Flores told reporters the “claims are baseless, and we will vigorously defend ourselves.” The company added that it has complied fully with environmental regulations.

The auto company might be simply fighting to maintain a badly damaged image. It has already paid about $2.5 billion in penalties associated with faulty ignition switches linked to several deaths.

Still, the vehicle owners suggest GM’s cheating allowed its trucks to pass U.S. inspections, despite spewing nearly five times the legal amount of emissions under regular driving conditions, according to the lawsuit.

But the EPA has yet to accuse the company of emissions violations. In fact, the agency approved the company’s application to produce and sell tens of thousands of 2017 Duramax diesel-powered vehicles tucked away in storage.

EPA has not responded to The Daily Caller News Foundation’s requests for comment about whether officials are concerned the initial probe into VW opened a can of worms for the auto industry. It has also refused to comment about the validity of the lawsuit against GM.

Follow Chris White on Facebook and Twitter

Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact [email protected].

Article source: http://dailycaller.com/2017/05/28/epas-lawsuit-against-vw-kick-started-a-crusade-against-the-auto-industry/

EPA’s Lawsuit Against VW Kick Started A Crusade Against The Auto Industry

The Environmental Protection Agency’s (EPA) initial lawsuit targeting Volkswagen’s fuel emission scandal has spawned a slew of similar lawsuits, including one that does not appear to have the agency’s backing.

EPA’s successful investigation and lawsuit earlier this year against the German company has prompted vehicle owners to sue General Motors and Fiat Chrysler, with the former having received permission from the agency to produce a slew of diesel vehicles.

VW pleaded guilty in March to charges from “diesel gate,” which affected more than 500,000 vehicles and cost the automaker billions of dollars. VW was sentenced to three years’ probation and forced to pay billions of dollars in penalties.

The company admitted in 2015 to installing so-called defeat devices in hundreds of thousands of diesel-powered vehicles in the U.S. The Bosch devices would activate during road conditions when emission measuring tools were not engaged.

VW agreed to spend up to $25 billion in the U.S. to address the scandal – it also was tasked with recalling and fixing the tainted vehicles. The company was sentenced to three years of probation and forced to pay billions of dollars in penalties. EPA officials championed their victory over the company last year.

“Individuals with VW are being charged to show that those who commit serious crimes will be charged with face serious charges,” former EPA administrator Gina McCarthy said in a statement shortly after a court penalized the company. Regulators keeps big corporations from running rough shod over American consumers, she added at the time.

But government officials weren’t happy with taking down VW. They pursued Fiat shortly thereafter. The Department of Justice filed a lawsuit against the Italian auto company and claimed it used similar emission-cheating software as its German counterpart.

Fiat affixed “cheat devices” to 104,000 light duty diesel vehicles that were not disclosed to regulators during the certification application process, according to the lawsuit, which was filed on behalf of the EPA.

The lawsuit also alleges the automaker equipped late-year Grand Cherokees and Dodge Ram 1500s with at least eight software-based features that curtail the vehicles’ emission control systems. The devices allowed the vehicle to push out higher levels oxides of nitrogen than the EPA permits.

Unlike VW, Fiat has maintained its innocence. Company officials told reporters that they plan on fighting claims “it engaged in any deliberate scheme to install defeat devices to cheat U.S. emissions tests.”

One of the law firms that represented vehicle owners in their pursuit of VW and Fiat has turned its ire against GM. Hagens Berman Sobol claims the Detroit-based company affixed 705,000 late-model Chevrolet Silverado and GMC Sierra pickups with at least three so-called defeat devices to dupe air regulators.

Hagens’ nearly 200-page complaint contains about 85 of references to VW, and claims the environmental damage from the diesel-powered truck could surpass by magnitudes that of the German automakers.

GM denied installing any such devices, and a spokesman Dan Flores told reporters the “claims are baseless, and we will vigorously defend ourselves.” The company added that it has complied fully with environmental regulations.

The auto company might be simply fighting to maintain a badly damaged image. It has already paid about $2.5 billion in penalties associated with faulty ignition switches linked to several deaths.

Still, the vehicle owners suggest GM’s cheating allowed its trucks to pass U.S. inspections, despite spewing nearly five times the legal amount of emissions under regular driving conditions, according to the lawsuit.

But the EPA has yet to accuse the company of emissions violations. In fact, the agency approved the company’s application to produce and sell tens of thousands of 2017 Duramax diesel-powered vehicles tucked away in storage.

EPA has not responded to The Daily Caller News Foundation’s requests for comment about whether officials are concerned the initial probe into VW opened a can of worms for the auto industry. It has also refused to comment about the validity of the lawsuit against GM.

Follow Chris White on Facebook and Twitter

Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact [email protected].

Article source: http://dailycaller.com/2017/05/28/epas-lawsuit-against-vw-kick-started-a-crusade-against-the-auto-industry/

EPA’s Lawsuit Against VW Kick Started A Crusade Against The Auto Industry

The Environmental Protection Agency’s (EPA) initial lawsuit targeting Volkswagen’s fuel emission scandal has spawned a slew of similar lawsuits, including one that does not appear to have the agency’s backing.

EPA’s successful investigation and lawsuit earlier this year against the German company has prompted vehicle owners to sue General Motors and Fiat Chrysler, with the former having received permission from the agency to produce a slew of diesel vehicles.

VW pleaded guilty in March to charges from “diesel gate,” which affected more than 500,000 vehicles and cost the automaker billions of dollars. VW was sentenced to three years’ probation and forced to pay billions of dollars in penalties.

The company admitted in 2015 to installing so-called defeat devices in hundreds of thousands of diesel-powered vehicles in the U.S. The Bosch devices would activate during road conditions when emission measuring tools were not engaged.

VW agreed to spend up to $25 billion in the U.S. to address the scandal – it also was tasked with recalling and fixing the tainted vehicles. The company was sentenced to three years of probation and forced to pay billions of dollars in penalties. EPA officials championed their victory over the company last year.

“Individuals with VW are being charged to show that those who commit serious crimes will be charged with face serious charges,” former EPA administrator Gina McCarthy said in a statement shortly after a court penalized the company. Regulators keeps big corporations from running rough shod over American consumers, she added at the time.

But government officials weren’t happy with taking down VW. They pursued Fiat shortly thereafter. The Department of Justice filed a lawsuit against the Italian auto company and claimed it used similar emission-cheating software as its German counterpart.

Fiat affixed “cheat devices” to 104,000 light duty diesel vehicles that were not disclosed to regulators during the certification application process, according to the lawsuit, which was filed on behalf of the EPA.

The lawsuit also alleges the automaker equipped late-year Grand Cherokees and Dodge Ram 1500s with at least eight software-based features that curtail the vehicles’ emission control systems. The devices allowed the vehicle to push out higher levels oxides of nitrogen than the EPA permits.

Unlike VW, Fiat has maintained its innocence. Company officials told reporters that they plan on fighting claims “it engaged in any deliberate scheme to install defeat devices to cheat U.S. emissions tests.”

One of the law firms that represented vehicle owners in their pursuit of VW and Fiat has turned its ire against GM. Hagens Berman Sobol claims the Detroit-based company affixed 705,000 late-model Chevrolet Silverado and GMC Sierra pickups with at least three so-called defeat devices to dupe air regulators.

Hagens’ nearly 200-page complaint contains about 85 of references to VW, and claims the environmental damage from the diesel-powered truck could surpass by magnitudes that of the German automakers.

GM denied installing any such devices, and a spokesman Dan Flores told reporters the “claims are baseless, and we will vigorously defend ourselves.” The company added that it has complied fully with environmental regulations.

The auto company might be simply fighting to maintain a badly damaged image. It has already paid about $2.5 billion in penalties associated with faulty ignition switches linked to several deaths.

Still, the vehicle owners suggest GM’s cheating allowed its trucks to pass U.S. inspections, despite spewing nearly five times the legal amount of emissions under regular driving conditions, according to the lawsuit.

But the EPA has yet to accuse the company of emissions violations. In fact, the agency approved the company’s application to produce and sell tens of thousands of 2017 Duramax diesel-powered vehicles tucked away in storage.

EPA has not responded to The Daily Caller News Foundation’s requests for comment about whether officials are concerned the initial probe into VW opened a can of worms for the auto industry. It has also refused to comment about the validity of the lawsuit against GM.

Follow Chris White on Facebook and Twitter

Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact [email protected].

Article source: http://dailycaller.com/2017/05/28/epas-lawsuit-against-vw-kick-started-a-crusade-against-the-auto-industry/

Big auto lender only checked 8% of applicants’ incomes

NEW YORK (CNNMoney) — Nearly 107 million Americans have an auto loan.

It’s a record high, and there are growing concerns that many people who obtained their car loans couldn’t really can’t afford them.

Alarm bells are ringing because one of the largest subprime auto lenders in the nation — Santander Consumer USA — only checked the incomes of 8% of its applicants, according to a new report from Moody’s Investors Service. Subprime refers to loans made to people with poor credit.

“A lack of income verification…creates more uncertainty around whether borrowers will be able to afford their monthly payments,” Moody’s wrote.

By comparison, Santander’s main competitor auto lender AmeriCredit verified 64% of applicant incomes.

Santander’s behavior is very much reminiscent of the practices that led to the home loan crisis where people were getting home mortgages who clearly should not have. The difference is that car loans are smaller and make up a smaller portion of the overall economy.

But it’s not surprising that losses at subprime auto lenders are at the highest rate since the aftermath of the Great Recession. SP Global Ratings found that losses on subprime auto loans in January hit 9.1%, the worst level since 2010.

“The warning bells are blaring too loud to ignore any longer,” says Erin Mahoney of the Committee for Better Banks, a group advocating for reform.

Santander is pushing back by saying that it looks at many metrics to determine if someone should get a loan. Proof of income isn’t always the best indicator of whether someone can repay a loan, some say.

“We are entirely committed to treating our customers fairly and lending responsibly,” a Santander Consumer USA spokeswoman told CNNMoney. “We consider a wide range of factors to manage and price for risk.”

Moody’s points out that this doesn’t mean it’s time to panic. The auto loan industry is much smaller than the home loan market. Even if a lot of people do default on their car loans, it wouldn’t rock the global economy in the same way the mortgage crisis did.

“The size is not comparable,” says Nicky Dang, a vice president at Moody’s.

People don’t need to take out nearly as much debt to buy a vehicle. While the typical American home costs around $200,000, the average new car is about one-sixth that amount, or under $35,000.

Dang also says that while auto loan defaults have risen recently, they are “definitely not that high” compared to historical trends.

The other key difference is that nearly all home mortgages were being packaged together on Wall Street and sold on to investors globally on a mass scale. That’s not happening at nearly the same extent with auto loans. Less than 20% of subprime autoloans are “securitized” on Wall Street, according to SP Global, a credit rating agency.

Article source: http://www.valleynewslive.com/content/news/Big-auto-lender-only-checked-8-of-applicants-incomes-424924584.html

Big auto lender only checked 8% of applicants’ incomes

NEW YORK (CNNMoney) — Nearly 107 million Americans have an auto loan.

It’s a record high, and there are growing concerns that many people who obtained their car loans couldn’t really can’t afford them.

Alarm bells are ringing because one of the largest subprime auto lenders in the nation — Santander Consumer USA — only checked the incomes of 8% of its applicants, according to a new report from Moody’s Investors Service. Subprime refers to loans made to people with poor credit.

“A lack of income verification…creates more uncertainty around whether borrowers will be able to afford their monthly payments,” Moody’s wrote.

By comparison, Santander’s main competitor auto lender AmeriCredit verified 64% of applicant incomes.

Santander’s behavior is very much reminiscent of the practices that led to the home loan crisis where people were getting home mortgages who clearly should not have. The difference is that car loans are smaller and make up a smaller portion of the overall economy.

But it’s not surprising that losses at subprime auto lenders are at the highest rate since the aftermath of the Great Recession. SP Global Ratings found that losses on subprime auto loans in January hit 9.1%, the worst level since 2010.

“The warning bells are blaring too loud to ignore any longer,” says Erin Mahoney of the Committee for Better Banks, a group advocating for reform.

Santander is pushing back by saying that it looks at many metrics to determine if someone should get a loan. Proof of income isn’t always the best indicator of whether someone can repay a loan, some say.

“We are entirely committed to treating our customers fairly and lending responsibly,” a Santander Consumer USA spokeswoman told CNNMoney. “We consider a wide range of factors to manage and price for risk.”

Moody’s points out that this doesn’t mean it’s time to panic. The auto loan industry is much smaller than the home loan market. Even if a lot of people do default on their car loans, it wouldn’t rock the global economy in the same way the mortgage crisis did.

“The size is not comparable,” says Nicky Dang, a vice president at Moody’s.

People don’t need to take out nearly as much debt to buy a vehicle. While the typical American home costs around $200,000, the average new car is about one-sixth that amount, or under $35,000.

Dang also says that while auto loan defaults have risen recently, they are “definitely not that high” compared to historical trends.

The other key difference is that nearly all home mortgages were being packaged together on Wall Street and sold on to investors globally on a mass scale. That’s not happening at nearly the same extent with auto loans. Less than 20% of subprime autoloans are “securitized” on Wall Street, according to SP Global, a credit rating agency.

Article source: http://www.valleynewslive.com/content/news/Big-auto-lender-only-checked-8-of-applicants-incomes-424924584.html

Big auto lender only checked 8% of applicants’ incomes

NEW YORK (CNNMoney) — Nearly 107 million Americans have an auto loan.

It’s a record high, and there are growing concerns that many people who obtained their car loans couldn’t really can’t afford them.

Alarm bells are ringing because one of the largest subprime auto lenders in the nation — Santander Consumer USA — only checked the incomes of 8% of its applicants, according to a new report from Moody’s Investors Service. Subprime refers to loans made to people with poor credit.

“A lack of income verification…creates more uncertainty around whether borrowers will be able to afford their monthly payments,” Moody’s wrote.

By comparison, Santander’s main competitor auto lender AmeriCredit verified 64% of applicant incomes.

Santander’s behavior is very much reminiscent of the practices that led to the home loan crisis where people were getting home mortgages who clearly should not have. The difference is that car loans are smaller and make up a smaller portion of the overall economy.

But it’s not surprising that losses at subprime auto lenders are at the highest rate since the aftermath of the Great Recession. SP Global Ratings found that losses on subprime auto loans in January hit 9.1%, the worst level since 2010.

“The warning bells are blaring too loud to ignore any longer,” says Erin Mahoney of the Committee for Better Banks, a group advocating for reform.

Santander is pushing back by saying that it looks at many metrics to determine if someone should get a loan. Proof of income isn’t always the best indicator of whether someone can repay a loan, some say.

“We are entirely committed to treating our customers fairly and lending responsibly,” a Santander Consumer USA spokeswoman told CNNMoney. “We consider a wide range of factors to manage and price for risk.”

Moody’s points out that this doesn’t mean it’s time to panic. The auto loan industry is much smaller than the home loan market. Even if a lot of people do default on their car loans, it wouldn’t rock the global economy in the same way the mortgage crisis did.

“The size is not comparable,” says Nicky Dang, a vice president at Moody’s.

People don’t need to take out nearly as much debt to buy a vehicle. While the typical American home costs around $200,000, the average new car is about one-sixth that amount, or under $35,000.

Dang also says that while auto loan defaults have risen recently, they are “definitely not that high” compared to historical trends.

The other key difference is that nearly all home mortgages were being packaged together on Wall Street and sold on to investors globally on a mass scale. That’s not happening at nearly the same extent with auto loans. Less than 20% of subprime autoloans are “securitized” on Wall Street, according to SP Global, a credit rating agency.

Article source: http://www.valleynewslive.com/content/news/Big-auto-lender-only-checked-8-of-applicants-incomes-424924584.html

Auto Service Contracts: 6 Things You Should Know


(Photo by Justin Sullivan/Getty Images)

(Photo by Justin Sullivan/Getty Images)

Consumers continue to report receiving notices of expired vehicle warranties from firms with which they have no warranty or on vehicles that they do not own. Many fall prey to invoices that accompany these notices to extend their warranty. Here’s how the scheme works.

Consumers receive a notice stating, “Your vehicle’s comprehensive warranty may shortly expire.” The notice even offers a telephone number to call and requests that the consumer provide their VIN Number, vehicle mileage, and the “warranty expiration code” provided on the form.

If you are shopping for a new or used car, you may be encouraged to buy an auto service contract.

Auto service contracts have become increasingly popular as a way to provide consumers a means to deal with unforeseen vehicle repair problems. Before signing on the dotted line, be sure to understand the terms of the contract and know who is responsible for providing the coverage.

What is an auto service contract? According to the Federal Trade Commission, an auto “service contract is a promise to perform (or pay for) certain repairs or service. Sometimes called an “extended warranty,” a service contract is not a warranty as defined by federal law.

A service contract may be arranged at any time and always costs extra; a warranty comes with a new car and is included in the original price.” This separate and additional cost distinguishes a service contract from a warranty.

Before deciding whether to buy an auto services contract, check out the company at bbb.org and consider the following:

  1. The Underwriter. It may be the manufacturer, dealer, or an independent company. Many service contracts sold by dealers are handled by independent companies called administrators. Administrators act as claims adjusters, authorizing the payment of claims to any dealers under the contract.
  2. Compete Cost of the Contract. The cost of the contract will depend largely on the make, model, and condition of your car. The contract cost will also vary widely from hundreds to even thousands of dollars. Even with a service contract, you a may still have some out-of-pocket expenses.
  3. Auto service contracts rarely cover all repairs. Watch out for exclusions. For example, if the contract specifies that only “mechanical breakdowns” will be covered, problems caused by “normal wear and tear” may be excluded.
  4. Handling a Claim. Determine, up front, what you will be required to do, if your car needs a covered repair. Don’t assume that you can take it to any repair shop. Some service contracts require you to go to designated repair shops only or to back to the dealer. Some contracts also require pre-authorization for a repair, before you can take it to a mechanic.
  5. Keeping Your Service Contract in Force. The car owner is usually required to keep up with general maintenance on the car, to include keeping records and receipts for this maintenance. Read the fine print; some contracts may also specify use of a certain dealer or repair shop for general maintenance.
  6. Contract Term. If the service contract lasts longer than you expect to own the car, find out if it can be transferred when you sell the car, whether there’s a fee, or if a shorter contract is available.

Be sure to carefully read the agreement and check that all verbal promises have been included. Don’t sign a contract with blank spaces that could be altered or changed. Finally, once the contract is signed, keep a copy of it for your records. Sources: BBB.org and FTC.gov.

BBB New Release: Auto Service Contracts: 6 Things You Should Know

For more information, check out Auto Service Contracts and Warranties. United States Federal Trade Commission, www.ftc.gov – not subject to copyright protection. 17 U.S.C. 403.

Article source: http://whnt.com/2017/05/27/auto-service-contracts-6-things-you-should-know/