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I know I won’t have too many agree with me, but I worry about this. Not the supposed student loan bubble, not the housing market, but the subprime auto loans.
>What will this chart look like when the economy turns, and unemployment surges again, and people cannot make their car payments?
Taking someone’s house is a process. When we were buying, we had our eye on a house that was going through foreclosure. 18 months and that house is still in the “pre-forclosure” process. There all kinds of games you can play to stretch it out as long as possible. Miss a car payment? Bob’s Repo will be there tomorrow. And if you didn’t lose your job already, you will. It’s this squeeze from the bottom that concerns me. Student loans and mortgage debt holders are generally middle income. But in many communities everyone needs a car, and the poor are at most risk of holding a subprime car loan.
>Subprime lending is very profitable – until the loans blow up
Good thing we learned our lesson from the last time. Er, never mind.
I record a lot of car purchases for clients
Usually people flip cars fairly often and just tack on the prior debt, its weird seeing someone start a loan underwater
I couldn’t do that shit
I know this is anecdotal, but I lived in a relatively poor area and I always think about this statistic because the number of $40k+ SUVs driving around is insane, when I’m making six digits and barely able to save, let alone manage $700 car payments…
People are buying SUVs like crazy right now, and even a cheap SUV will run you close to $30k. Idk where they get this money from.
In 2009-10, a lot of people started to park their cars on the quiet street beside my apartment. I only noticed cause one had a faulty rear hatch that made the alarm go off every night. Anyway I started noticing 5 0r 6 cars being parked there overnight and they were gone when I woke up. Found out by talking to the faulty rear hatch guy that he was parking it away from his house so it wouldn’t get REPOed. I assumed the other ones were there for that too.
Captive lending is the worst. The car companies sell you the car *and* the loan. You are better off getting your loan through a bank first, and then shop for the car.