| VGPolyglot said: I think there's an answer in the article: "Part of the boom in this segment is thanks to a technological advances that give banks more comfort lending to borrowers who may not be able to pay them back. Devices installed in cars let collections agencies remotely disable the vehicles when the borrower falls behind on repayment. Since these controversial and potentially dangerous devices make repossession easier, they dramatically reduce risk to the lender, opening up a new market of cash-strapped borrowers that banks were previously hesitant to approach."
So, the answer is that banks are more comfortable giving out loans for new cars because they have technology that makes it easier to re-possess. |
Having collateral is good for lender and borrower because it makes reverting the loan easier for both sides.
When it comes to taking out a loan, are people forced to buy a 28K$ car instead of a 5K used car?
