Cars depreciate based on how much they are driven while the amount outstanding debt is reduced by payments over time. The former can outpace the latter.
Lenders were allowing people to roll negative equity into the next loan, compounding the problem
Are you talking about trading in a car when the loan isn't paid off and just getting the outstanding amount added into a new car loan? How does that make things worse? By letting people assume too much debt?
...they have gaps in coverage.
Are you talking about damage that the owner pays for out of pocket contributing to their inability to afford another car or get their fixed?
The auto dealers are underwater on their inventory because they were using revolving lines of credit to get vehicles on the lot during the car buying boom.
Cars depreciate based on how much they are driven while the amount outstanding debt is reduced by payments over time. The former can outpace the latter.
Are you talking about trading in a car when the loan isn't paid off and just getting the outstanding amount added into a new car loan? How does that make things worse? By letting people assume too much debt?
Are you talking about damage that the owner pays for out of pocket contributing to their inability to afford another car or get their fixed?
I don't understand this one.