I was thinking of another movie; "Repo Man"
Posted on 07/10/2022 3:30:26 PM PDT by RomanSoldier19
The jobs report and minutes from the Federal Reserve’s June meeting were the economic highlights of the week, but they are, respectively, a lagging indicator and old news. This column instead digs into the auto market, where there is an underappreciated ticking time bomb.
Lucky Lopez is a car dealer who has been in the business for about 20 years. In recent meetings with bankers, where he bids on repossessed vehicles before they go to auction, he has noticed some common characteristics of the defaulted loans. Most of the loans on recently repossessed cars originated during 2020 and 2021, whereas origination dates are normally scattered because people fall on hard times at different times; loan-to-value ratios, or the amount financed relative to the value of the vehicle, are around 140%, versus a more normal 80%; and many of the loans were extended to buyers who had temporary pops in income during the pandemic. Those monthly incomes fell—sometimes by half—as pandemic stimulus programs stopped, and now they look even worse on an inflation-adjusted basis and as the prices of basics in particular are climbing.
(Excerpt) Read more at barrons.com ...
Lucky Lopez is a car dealer who has been in the business for about 20 years.
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The is just a spot on perfect name for a car dealer!
Found the guy’s YouTube channel yesterday. He knows a lot about the car business and explains it well. Had an interesting take on Carvana too.
The Federal Jobs Reports and other economic Federal news is all questionable. Some of it just doesn’t make sense.
I was thinking of another movie; "Repo Man"
Loans were extended and not paid. Cars value depreciated but the principal of the loan wasn’t paid down so people were upside down on car loans.
Link please
How soon until Brandon comes out with a repo moratorium? After all, minorities and LGBTQ hit the hardest. /s
I agree.
Some fast food businesses are folding because they can’t find anyone who will work.
Knew a couple like this - both worked, both bought new cars. Suddenly both were laid off. Declared Bankruptcy and the new cars were repo'd. Eventually they found jobs, and both had new cars again! It's a lifestyle, I guess.
https://youtu.be/EGf-FZP2gEA
Been looking for a car for my daughter, thought this might help you.
Yep. But they’re not finished tearing it down yet.
Then, as chip production kinks are worked out, and new cars start piling up on car lots, and manufacturer incentives to move them out start to balloon, used car prices will whoosh down, triggering panicked dumping by the banks.
That is correct. It’s also what happens when a loan repayment period so long that it is impossible for the car value to ever be equal to the loan.
It also happens a lot when buyers are distressed so they buy another car and roll over the loan into the financing of the new car. Common practice for people that are always in over their heads. Lenders still share the blame.
Car loans “should” require sufficient down payment that the value of the loan will not exceed the value of the depreciating car.
Great assessment on the matter.
Americans Pawning Items to Buy Gas, Survive Inflation: Pawn Shop Owners
https://www.newsweek.com/pawn-shop-owner-says-drivers-selling-personal-items-buy-gas-1717156
The crooks only want to hack off the catalytic converters.
Very true. Many stores have hiring issues due to handouts and other Govt. bennies. Many people are living free in Section 8a apartments, using SNAP plus more handouts.
On phone now but I’ll try to get it to you tomorrow.
We’re probably headed for a depression in 2023. There’s more and more talk of it.
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