Today both auto loans and student loans are reaching dangerously high levels with the risk of defaults increasing.
You can’t get out of student loans. The day is coming when those who default on student loans will get “SWAT teamed”. Maybe that Lesbian African Art degree will help prepare those who majored in this—cope with the coming reality.
First we get “free” healthcare. Bernie is pushing “free” college for everybody. If you don’t have a car how can you get to the doctor and to school. People have a right to “free” cars. It is time for the billionaires on Wall Street to give a new car to me. /s
I can see why. I need to replace my pickup and I need something to tow a large fifth wheel. It’s pretty difficult to find anything under $50,000. A truck equipped similar to my last one is over $60,000. That means I’ll have to stretch the loan term out to 7 years just to keep the payments under $600 a month. My payments may outlast my truck.
I drive a serviceable but pretty ratty car because I don’t buy anything I can’t pay for with one single payment at the time I buy it. I don’t owe anyone anything and these bubbles don’t crash directly onto my own head.
Retail sales of autos completely tanked last month. Government motors 18% plunge look good compared to Ford ( moving to Mexico). We have reached the gag point in these insane prices. If you are a young couple starting out ,you have lost your mind if you pay these insanely high prices choked full of needless government regulations and paying for huge health care costs and retirements. Simply don’t do it.
It wasn’t that long ago that the amount financed today for a car...would’ve bought a house.
And yes, I see more and more commercials for 0% for 60 or 72 months.
Since I tend to not buy things I can’t afford, I don’t get to benefit from the federal bail out programs.
That being said, car sales should collapse if and when the Fed lets interest rates return to their natural level.
It is the same crew of shadow banking Wall Street firms that were behind the worst of the subprime loans during the bubble.
Now they do payday loans and lend against autos. They heavily advertise on am radio and have tacky storefront offices in strip malls. You’d never suspect that these are part of major Wall Street firms but they are.
This is on the order of legalized usury, the rates can be like 300%. The only thing missing is that they don’t break your legs.
Cars are the reason why many, MANY people are poor.
But they never consider it because they value their image.
7+ year loans Going to get very ugly.
I told my wife, now that she is not working, if one of our (paid for) cars dies I am getting a good commuter bike. Not signing up for a loan that lasts into my 70s for a car that is ridiculously over featured. I seriously like the Suzuki Boulevard 650 thumper. Tank like reliability, belt drive for right at $5k.
Translation: We’re (JPMorgan Chase) going to need another bail-out.
You go to a showroom and see cars at 40/50/60 thousand and that’s not counting tax and stuff.
The price of some new cars is just outrageous.
You know there’s a bubble that’s going to burst when every time you go to your mailbox there are numerous solicitations for you to simply sign return the enclosed application for your pre-approved auto loan. I get these daily. And not from shady lenders you’ve never heard of. I’m talking about Chase, Citigroup, Bank of America, Wells Fargo. Daily. Ok...they’re shady too but we’ve all heard of them.
You can find good deals on craigslist.
You cant be stupid but you can find them.
Do leases count as auto loans? I had a car for 14 years, then had to give it to someone in the family in need of a safe (and free) car. Wasn’t mentally or financially prepared to buy, so I leased a car. It comes off lease in Oct. While I like it, I’m glad I didn’t buy it.
Some will sink with the ship of recirculating debt in style and good appearances, just after they drive their neighbors off of their own properties.
Others will drive the cars that they built.
