Posted on 04/18/2016 6:47:42 PM PDT by george76
New car loans have become the new hot product and Wall Street, not car-loving Americans, is the real market.
The growth of student loan debt has received no shortage of attention from politicians and the media in recent years, making it one of the top economic anxieties in post-mortgage-meltdown America. Behind the front-page investigations and populist political platforms, the numbers are indisputably chilling: student loan balances have surged from less than $18,000 per person to $25,000 per person in the ten years since 2005. But another class of debt is also growing at troubling rates without attracting anywhere near the same level of attention: car loans.
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Together, loans for cars and education contributed 90 percent of the growth in consumer debt since the end of 2012. Outstanding auto loans have hit more than a trillion dollars, with an average balance of $12,000 per person (or nearly 8 percent of disposable income), while the dreaded student loans “epidemic” is not far ahead at $1.3 trillion outstanding.
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Auto Asset Backed Securities (ABS), securitized bundles of car loans not unlike the mortgage-backed securities at the heart of the 2008 credit crisis, are the hidden driver of the auto debt boom.
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In 2015 some 23.5 percent of all new car loans were subprime
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rising delinquencies and defaults are finally opening the media’s eyes to the risk of an auto credit bubble collapse
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it’s time to recognize that expanding auto credit is not a substitute for the missing piece of the puzzle: rising wages. Until American consumers start seeing a genuine improvement in their financial position, it’s critical that we not encourage yet another debt bubble simply because it provides the appearance of economic growth.
(Excerpt) Read more at thefederalist.com ...
When I was first married, I had a repo man show up to find my neighbor. Went out to talk with him (the neighbor moved out the night before).
Very interesting work. A bit dangerous. He had tats and long hair, but said that was more of a “uniform” than anything else.
He did say he noticed my bride with a 1911 looking at him through the upstairs window. Said that convinced him he had the wrong car, because Kimber’s don’t come cheap and they are not financed.
I agree!! I was coerced by pretty looks and shady deals into buying my Mustang! I did not do it of my own volition! and don't pay any attention to my credit rating and spotless payment history -- I deserve a break!
I once looked at a very nice used four wheel drive pickup on a lot and a “salesman” saw me and came and asked if he could help. I asked him what they wanted for the truck and he told me that he couldn’t tell me, I would have to talk to the manager. I asked him why he couldn’t tell me the asking price and he told me that they didn’t work that way! He asked me what I WANTED TO PAY for the truck and I told him one hundred dollars! He acted offended and told me that if he went in to the sales manager with an offer like that he would be fired and I needed to come up with a reasonable offer. I told him no, you asked a damned fool question so you shouldn’t complain about the answer. He didn’t have a response for that so I got back in my car and left.
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