... No, I don't think it has anything to do with the mythical "consumer confidence" that people talk about so much. The problem is that people have less and less money to live on... and are trying harder and harder to stay at the same standards of living they are used to or that they aspire to... and there are many more bad loan deals out there taking advantage of these circumstances.
I had a 7 year car loan. I made my last payment on it last month, but I paid it off 3 years early. It was such an awful experience that I vowed to never again have a loan. On anything. So I started to educate myself about finances and found this forum... hooray. I am still recovering from the experience.
When I took the loan out, I had bad credit. I was restricted to get a car that was less than 4 years old and less than 60k miles on it, and to qualify for a car in that condition they had to offer me the longest payment plan possible because my income is so low. Did I take the cheapest car possible? Of course not.. I thought it would be better to get something slightly newer, in slightly better condition. I didn't have the money to buy anything with cash, and I didn't have the money to put anything down on the car. They offered me, what I thought was a better deal to buy newer. I didn't understand the true cost to own... But once I realized what I was going to have to pay in interest on that deal, I moved home and put all of my income into paying off the car. Which I did... but in the meantime, before I got smart and moved home, I ended up further into cc debt trying to pay bills that I could no longer afford because of my car payment. I'm still trying to recover from my massive slide into financial oblivion caused by my ridiculous decision, which I thought was a smart decision at the time..
It surprises me how often people assume I understood what I was doing. I did not. There was no "informed consent" or consumer education prior to me signing the biggest financial transaction of my life. I had no idea how much interest I would have to pay over the life of the loan and no one ever told me while I was at the dealership.. I had to calculate that on my own after I realized what it was. I don't think loans like these should be allowed. But when you don't have a car and you need one to get to work and someone offers you what you think is a deal.. you take it. Nothing more to it than that. It angers me, now that I know so much more, and I get pretty paranoid when I wonder what else I may not know that I don't know... but all I can do is live and learn... and never do that again.