From super-sized meals at the drive-thru to the cars on the road, super-sized everything has been and continues to be the trend. Whether it’s a status symbol or the feeling of getting more for your money, “bigger is better” seems to be the mentality these days.
But is bigger always better? Some vehicles are getting so big, they won’t even fit into an average sized garage any longer. And try to park one of those beasts in a spot at your local grocery store? Good luck! Couple this with the ever-increasing cost of vehicles today, and not all would agree they are getting what they bargained for. According to a recent article by Shiffgold, the cost of new and used vehicles are at a record high. ZeroHedge has reported that the average price of a new vehicle is $31,099 and used cars are hitting an all-time high average of $19,589. That equates to an average monthly payment of $515 per month just for the car payment. The insurance to cover that car is a whole separate story.
Rising costs are not exactly equating to rising profits within the auto industry. While interest rates and prices are going up, sales are going down. Additionally, the number of borrowers behind on payments has been steadily increasing for years. Even as the average loan has extended to 69 months, another record high, consumers with tight budgets and unstable credit are having a hard time paying their bills.
This is also making it more and more difficult for lenders to force place insurance. While most individuals carry their own insurance policies, forced placed insurance has been an option for lenders to ensure coverage on vehicles that otherwise may not be insured. Though the recent Wells Fargo scandals have not helped matters, the option to force place insurance is losing traction due to the sheer fact that not as many cars are being sold and need coverage.
Make the switch to blanket single interest and forget about force placing on a borrower who already can’t make their current car payment. Drive down your delinquency and increase employee utilization and strengthen your balance sheet. Call Lenders Risk now at 888-600-4436 to make the switch.