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Continued: Risky business: Some analysts, insiders fear auto industry returning to bad habits of the past

  • Article by: TOM KRISHER , Associated Press
  • Last update: September 2, 2014 - 4:24 PM

Based on an average sales price of just over $32,000, the additional discounts would cost the industry almost $5.2 billion per year.

"This was the trap that got everyone in trouble before the recession," Brauer says.

Bankrate's McBride says lenders are willing to make larger and longer loans because cars are easy to repossess.

"You miss more than one payment and it won't be in the driveway in the morning," he says.

Others are more sanguine. Melinda Zabritski, senior director of auto finance for Experian, says repossessions and delinquencies still are extremely low. And longer loan terms keep payments down, reducing late payments and defaults.

Former Hyundai U.S. CEO John Krafcik, now head of the auto pricing site, says used-car values should fall from current record highs to a normal level as leased cars enter the market. Those who lease will be shopping again every three years.

All automakers report sales on Wednesday, and most analysts are predicting the numbers will be flat compared to 2013. That's still a strong month, with an annual sales rate of 16.5 million or more.

  • related content

  • The U.S. auto industry is enjoying a record year, but some analysts are expressing caution about tactics used to drive up the numbers. August sales data is expected to be released on Wednesday.

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