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The chapter discusses the alarming rise in auto debt in the United States and the consequences it has on individuals, especially those in lower socioeconomic positions. The chapter begins by highlighting the similarities between the auto debt bubble and the subprime housing crash of 2008, and the lack of support for auto debtors during the COVID pandemic. The chapter then proceeds to provide statistics on the amount of debt owed on car loans, with subprime borrowers being the population most likely to default. It also notes the racial disparity in auto debt and the fact that there are more people with auto loans than student loan borrowers.

The chapter argues that while there has been significant attention given to the student debt crisis and calls for mass debt cancellation, the issue of auto debt has received less attention. It asserts that transportation is also a public good, but its public component has never been adequately funded, leading to a reliance on private financing. It discusses how auto loans are considered “bad debt” since cars depreciate in value as soon as they are purchased, and how the pleasure and status associated with cars often leads to little outrage over the debt trap they create.

The chapter then delves into the relationship between auto ownership and incarceration, highlighting the carbon footprint of auto-dependency and the ease with which individuals with poor credit can finance a car compared to finding rental housing. It discusses the conditions of auto loans, including how many owners end up being “upside down” on their loans, owing more than the car is worth, and how repossession is often the next step for lenders. The chapter also notes the potential for jail sentences in cases of auto debt delinquency, either through debt collectors or judges.

The chapter briefly discusses the issue of usury, particularly how state usury laws and private agreements allow for higher interest rates on auto loans. It mentions how dealers and lenders in the auto industry operate in a monopoly and are often able to bypass regulations or exploit loopholes. The chapter also covers the rise of subprime auto lending and the securitization of auto loans, which has led to looser credit and underwriting standards.

The chapter explores the predatory practices of subprime auto lenders, such as Credit Acceptance, including the use of starter kill switches and GPS locators to remotely disable or track vehicles. It discusses the discrimination faced by African American borrowers in auto lending and insurance. The chapter also delves into the predatory practices of the buy here, pay here (BHPH) lots that target low-income consumers with high-interest loans and inflated prices.

Finally, the chapter examines the intersection between auto debt and traffic fines, discussing how both types of debt can lead to incarceration and the ways in which debt collectors and creditors manipulate the justice system to enforce debt collection. It argues for stronger regulation and consumer protections for auto loans and highlights the need to address the systemic debt-to-jail pipeline.

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