Economist warns Arkansans to be careful when taking out auto loans

Local News

Buyers beware if you’re looking to purchase a new car; it can be easier than you think, but can also lead to you signing up for more than you bargained for.

A new report says more people buying new cars with trade-ins have negative equity.

Sales people and lenders are giving out more auto loans that often exceeds the car’s value leaving consumers like you in the red.

Dr. Michael Pakko, Chied Economist at UALR and State economic forecaster says people need to be careful before signing the dotted line.

“Before you even go to a dealer you can look up the blue book value of your car look up the outstanding principal on it and if the outstanding principal is above the value of the vehicle then you know if you’re going to trade it in then you know you are going to be losing money.” said Dr. Pakko.

Dr. Pakko says this phenomenon; referred to as being underwater, can leave car owners trapped in debt for years.

If you want to learn more from this on Thursday, Dr. Pakko will be taking part in a free event that will discuss the Little Rock region’s economic development.

You can go here to register for the free breakfast event.

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