So many non pay cancellations but customers are still buying expensive cars. What gives?

[NY independent]

We are seeing an alarming increase in the number of cancellations for non pay on both personal auto (big increase because of all of the rate increases) and homeowners, but many of the same people are buying/leasing expensive new cars (BMW especially, but new pickups too.. with lease /loan payments greater than $1K per month)). I'm talking about cancel/rewrite (sometimes with a lapse) every month for 2+ years. They complain that they can't make ends meet anymore. When they can't afford the insurance on the current vehicle and are having trouble paying for their HO insurance, why do people still make these expensive car purchases? It also makes me wonder why BMW, MB, Ford, Ram, etc approve loans/leases when folks have marginal credit scores and don't have the ability to make the payments. What am I missing?

 

[adjusterjack]

When they can't afford the insurance on the current vehicle and are having trouble paying for their HO insurance, why do people still make these expensive car purchases?

Because they are more concerned with their image than paying for necessities.

It also makes me wonder why BMW, MB, Ford, Ram, etc approve loans/leases when folks have marginal credit scores and don't have the ability to make the payments. What am I missing?

They can usually come up with large down payments for their ostentatious purchases and pay higher interest rates, stretch the loan out at long as possible. The finance company get enough early on so that the don't lose much on a repo. Then the used car gets sold again to somebody else who can't afford it but comes up with a large down payment and pays high interest rates. Rinse and repeat.

 

[WinoBlues]

Priorities

In 2020 The government had to give out Billions of dollars after shutting down the nation. In 2020 TV sales broke records. Priorities.

 

[Markthebroker]

We are seeing an alarming increase in the number of cancellations for non pay on both personal auto (big increase because of all of the rate increases) and homeowners, but many of the same people are buying/leasing expensive new cars (BMW especially, but new pickups too.. with lease /loan payments greater than $1K per month)). I'm talking about cancel/rewrite (sometimes with a lapse) every month for 2+ years. They complain that they can't make ends meet anymore. When they can't afford the insurance on the current vehicle and are having trouble paying for their HO insurance, why do people still make these expensive car purchases? It also makes me wonder why BMW, MB, Ford, Ram, etc approve loans/leases when folks have marginal credit scores and don't have the ability to make the payments. What am I missing?

Americans are financing things they can't afford?

No way.

 

[Newby]

 

[marindependent]

I'm talking about cancel/rewrite (sometimes with a lapse) every month for 2+ years.

sounds like they need a new agent

 

[Markthebroker]

sounds like they need a new agent

I'll rewrite a client once. I make it very clear that's the only time.

After that they are a bad client. Then I tell them to call marindependent and ask for a BOR.

 

[marindependent]

Then I tell them to call ...and ask for a BOR.

Best leads in the world are clients calling up saying my agent told me to take this BOR to you and have you be my agent! LOL- run now.

 

[marindependent]

From Todays WSJ in an article titled Car Prices are Becoming Unsustainable:

"Seasonalized rates of severe delinquency for auto loans are the highest since at least 2006..."

 

[Markthebroker]

From Todays WSJ in an article titled Car Prices are Becoming Unsustainable:

"Seasonalized rates of severe delinquency for auto loans are the highest since at least 2006..."

Interesting. The economy isn't doing great, but it's been much worse since 2006. Interest rates have gone up, but are still historically low.

What do you think the reason is for this?