While financing auto assets, one should not finance model or make which are discontinued in the market.
There is always a sudden drop in the value of those vehicles when discontinued for whatever reasons; the borrowers may not have interest in holding on to the vehicle and start defaulting on payments. The attitude changes with the imminent loss he may incur in holding the vehicle; he would be the first to know the discontinuance and the depressed value. Loan companies get to know the picture very late almost always.
Borrowers try to even overuse the vehicle, not maintain properly and not make installments so as to maximise his recovery of his equity/ margin in the asset quickly, before repossession.
In the market, forecasting a make or model discontinance is very difficult. When it happens, lenders must stop immediatly to avoid any further risk. The author even recommends to put on hold financing such makes/ models rumoured to be discontinued.
When loan companies come to know of the discontinuance, mark all those contracts as 'high risk' and monitor closely for early repossesion and disposal in case of 'high deliquency'.
Certainly, it is not at all advisable to consider financing used vehicles of those makes/ models even if the customer is highly rated or existing customer with good credit history.
Similarly, used imported vehicles must not be considered for financing; quality, spare avialability, value are suspect. Major frauds happen in metro cities in financing such vehicles.
