BAD LOANS: Hey, There Goes My Car!
The repo men are working overtime. Paul Lamoureux, a Detroit repossessor, is now pulling in 120 cars a month, compared with 80 a year ago. General Motors Acceptance Corp., the biggest U.S. auto lender, repossessed 2.1% of its customers' cars in the nine months ending Sept. 30, which was 25% more than during all of 1987. One reason for the upsurge in bad loans is that auto lenders have gone after riskier customers, among them first-time car buyers and recent college graduates. Another problem is the longer term of today's auto loans: typically 48 or 60 months, instead of 36. Some buyers' cars fall in value faster than their loan balances, so they decide to give up the auto rather than pay it off.
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