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US sub-prime auto lending raises concerns

Backed by an influx of investor money, securitisations of such loans have grown threefold to over US$20b since 2010

Americans are so dependent on their cars that investors are betting that they would rather lose their home to foreclosure than their car to repossession. Some lenders even lengthen the terms of their loans to entice more borrowers to buy cars.

New York

THE loans were for used Dodges, Nissans and Chevrolets, many with tens of thousands of kilometres on the odometer, some more than a decade old. They were also one of the hottest investments around.

So many asset managers clamoured for a piece of a September bond deal made

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