Auto loan

Bonds backed by auto loans make up the biggest auto loan chunk of asset backed deals issued so far this year.This helps consumers shopping for cars as they can get loans at lower rates because banks can offer them more attractive deals. Having lower monthly payments also means borrowers are less likely to default on their loans as they juggle bills in a sour economy, with the constant fear of a job loss.Issuance of asset backed securities stood at billion on July down from billion at this time last year, according to Asset Backed Alert, a trade publication. Of this, nearly of issuance worth about billion is in the auto sector, up from about at this time last year, according to Citigroup analysts. Credit card loan backed deals have fallen to second place this year, comprising about a third of issuance, down from at this time last year.The heavy issuance of auto deals reflects the backlog of auto deals left over from late said Darrell Wheeler, head of securitization research at Citigroup.A substantial portion of the deals that were sold this year were eligible for cheap funding for investors through the Federal Reserve's Term Asset Backed Securities Loan Facility, or Issuers this year include Ford Motor Co. Honda Motor Co. By offering these cheap loans, the central bank has given a boost to the securitization market and helped ease the credit situation in the economy.If a consumer cannot get a competitive loan to buy a car, there isn't much of a point in saving the car manufacturers, said Jim Harrington, an asset-backed securities portfolio manager at Ryan Labs Asset Management in New York. There was a break in the chain Auto sector loans represent about of all consumer asset backed securities issuance in a typical year. The deals represent a relatively safe investment: From through the first quarter of , auto accounted for roughly auto loan of all the upgrades and only of the downgrades, according to a note from Citi. vehicle ranks highly in the consumer's hierarchy of The rule of thumb to figure out if your vehicle qualifies for the government's new cash for clunkers program is: If it gets a combined city highway fuel economy of 18 miles per gallon and has a trade-in value less than it probably makes the grade.But just because your vehicle qualifies for the program doesn't mean you should actually take advantage of it. In some cases, you could still do better without it.Take a. With an estimated combined city and highway fuel economy of miles per gallon, the Mustang voucher for a new car with better fuel economy.But considering that Mustang fans would be appalled at the idea of tossing a special edition GT coupe into the maw of a car crusher, there is a better way: Sell it yourself.Since trade in value represents, essentially, the auto loan cost of a new car, you can generally do much better by selling the car directly to a new owner, bypassing the middle man.In this case, selling it yourself would net you about Whether that extra and the pleasure of knowing the car will live on is worth all the trouble is up to you.We've selected a swath of popular vehicles and determined whether or not their owners should take advantage of auto loan In all of these examples, the estimated values are calculated by Kelley Blue Book, assuming, except where otherwise noted, a base model vehicle with standard equipment that is in condition and has been driven about miles a year. We're also assuming you can qualify for the maximum credit on your new car.Click through for a look at the sometimes surprising verdicts on a few more vehicles. therefore the loan purpose is also a positive attribute, the Citi note said, because consumers will prioritize paying their monthly vehicle loan payment, even in hard times.