Subprime Auto-Loan Titan Defends Longer Terms as New Normal
ByThe man who created one of the biggest U.S. subprime lenders says there’s nothing dangerous about borrowers being given longer car loans.
When Thomas Dundon helped start the lender that’s become Santander Consumer USA Holdings Inc. in the 1990s, subprime borrowers typically were offered four-year car loans, he said Monday in an interview. Now, the standard is six years, he said, partly because wages haven’t kept up with vehicle prices.
Using longer terms to lower payments makes sense when the alternative for consumers and lenders is “a shorter term with an older, cheaper, less-reliable piece of transportation,” he said, after being replaced as the lender’s top executive this month when Banco Santander SA bought out his minority stake…
Subprime Auto-Loan Titan Defends Longer Terms as New Normal
