Researchers from TransUnion TRU and J.D. Power write, “As vehicle values have declined in recent quarters, used car loan-to-value ratios at origination have trended in the wrong direction for consumers.”Researchers from TransUnion TRU and J.D. Power write, “As vehicle values have declined in recent quarters, used car loan-to-value ratios at origination have trended in the wrong direction for consumers.
The increase comes partly because of inflated used car prices late last year. TransUnion Senior Vice President Satyan Merchant explains, “To a large extent, used vehicle values were elevated as a result of the scarcity brought on by pandemic-related supply chain and inventory issues. As those issues have abated, and inventories have begun to return to more of a normal state, the value of those used vehicles have begun to decline.
Related: Experts worry a perfect ‘negative equity’ storm is brewing for many car owners; here’s what you can do if you’re caught in itBorrowers with quickly depreciating vehicles, the researchers write, are “more likely to go delinquent.”