Skip to main content

More Signs the Auto Market Is Declining

By U.S. News & World Report

Ford Motor Co. (ticker: F), General Motors Co. ( GM) and Fiat Chrysler Automobiles ( FCAU) all reported April U.S. sales on Tuesday, and the numbers weren’t good. The auto stocks all initially plunged between 3 and 5 percent on further evidence the auto market is on the decline.

Industry analysts are projecting U.S. auto sales to fall between 3 and 4 percent in 2017, but the April numbers from the three Detroit stalwarts were a bit more troubling. GM’s year-over-year sales declined 5.8 percent in April, Fiat Chrysler sales dropped 6.6 percent and Ford sales fell 7.2 percent.

“We have to let the year play out,” Ford vice president of U.S. marketing Mark LaNeve said in response to the disappointing April numbers. “In a plateauing industry, you’re going to have some months that are up and some that are down.”

April sales were likely negatively impacted by Easter weekend falling in April this year instead of March, but ALG, a firm that tracks industry metrics, reports Easter weekend auto sales are typically only 2 percent lower than average.

The weak April numbers are just the latest sign of what many analysts see as a cyclical decline in the U.S. auto market. Despite dealer incentives reaching their highest level since 2009, dealers are reporting new cars are taking longer to sell than at any time in the past eight years.

[Read: Why the Auto Industry Is in Trouble.]

To make matters worse, Morgan Stanley projects used car prices will fall 20 percent by 2021. In addition to the auto manufacturers, subprime auto lenders could start to feel the heat from a slumping auto market.

“We expect off-lease volumes to result in above average annual depreciation in 2017 and 2018,” Height Securities analyst Edwin Groshans said in March. “The combination of lower car auction prices and weakening credit quality will manifest in the operations of auto finance companies with subprime lending concentrations.”

[Read: Santander to Pay $25.9 Million to Resolve Subprime Auto Loan Probes.]

Height named Credit Acceptance Corp. ( CACC), Santander USA Holdings ( SC), Ally Financial Inc ( ALLY) and Capital One Financial Corp. ( COF) as the companies with the most exposure to subprime auto loans.

More from U.S. News

Car Companies and the Race to Profits

10 Ways to Invest in Driverless Cars

High-Tech Investing: 7 Sectors to Watch

More Signs the Auto Market Is Declining originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
Read Next Story

Related News

Frustration grows in Venezuela as earthquake death toll reaches 1,430

Israel and Lebanon sign framework agreement with US in ‘first step’ toward peace, Rubio says

Trump-endorsed populist poised to become Colombia’s next president as rival challenges vote