Risk to prospective auto lenders is set to increase following plateauing car sales and increased competition to purchase auto loans , according to a report by Moody 's Investors fund . Sales of new cars and trucks in the US in 2016 hit a projected annual high of 17.55 million units , and although Moody 's expects that figure to rise to 17.4 million units in 2017 , it warns of the dangers of the ' trade - in treadmill ' , in which car dealers add an amount equal to the negative equity to a loan for a consumer 's next purchase , but extend the length of the loan .
Risk to US auto lenders is set to increase following plateauing car sales and increased competition to finance car loans, according to a report by Moody's Investors Service. Sales of new cars and trucks in the US in 2016 hit a record annual high of 17.55 million units, and although Moody's expects that figure to dip to 17.4 million units in 2017, it warns of the dangers of the 'trade-in treadmill', in which car dealers add an amount equal to the negative equity to a loan for a consumer's next vehicle, but extend the length of the loan.