The next time you're listening to the radio or local TV, payattention to the car sales commercials. Personally, I really get akick out of some of them. Car salesmen dressed in ridiculouscostumes make bold claims such as, “No credit? No problem! Comeover to XYZ auto where you can sign and ride for a nickel down!”Sound too good to be true? For those who desperately need anaffordable auto loan, it often is. The fine print will likelyreveal high interest rates with long repayment periods needed inorder to make the payments “affordable.” For financially vulnerable households, money paid in interest couldbe used for building long-term wealth, paying emergency expenses orreducing high cost debt.

These high-rate, long-term auto loans are similar to payday loans or cash advance offers.While the rates and costs of these services are distasteful tomany, what they provide is access to money and credit whenmainstream institutions like credit unions and banks fail to act.

The Importance of Affordable Auto Lending