Sending the Wrong Message
It’s cap-and-gown season, and captives and credit unions are touting their graduate auto loan offerings. A quick look at the promos, and one trend is clear: delayed payments are the graduation gift of choice, with 60-to-90-day deferments the norm.
The whole concept of payment deferments seems contrary to the habits lenders should instill in their customers, particularly first-time buyers. In fact, it seems like the delayed-payment strategy might be setting up customers for a missed payment, which would result in late fees and most certainly leave a sour taste in their mouths.
How about this for a college grad financing program: Make your first six months of payments on time and you get $50 off your seventh month’s payment or a $50 gas card.
Shouldn’t we be rewarding good financial behavior rather than encouraging poor payment habits?
