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 ...
I agree. They’re good at it.
Friend of a friend is a wheel in a small bank chain. He said their overdraft fees crashed during covid (people not going out and spending). It has slowly been rising, and in June, their bank got their most revenue ever in overdraft fees.
A favorite one of mine closed recently.
I would go there on a trip to visit family and a few friends.
I’m gonna bag your car!
————————-The Other Repo Code
More evidence of a built back better economy. /s
Just saw a commercial that rhe current price of a new Cherokee bare bones was $61,000.
Wow have they jumped.
Dealers didn't have cars on the lots and were jacking up prices above MRSP, especially on luxury vehicles. Had a Mercedes dealer in Houston try to get an extra $12k over MSRP after I had my car totaled from an accident. It was ridiculous, but they were selling at that price markup...just not to me.
Same as houses. People had that the extra money for downpayment which would get them a bigger loan, or even just a loan. My realtor lost two potential sales after the first rate hike because buyers couldn't qualify. If a 1/2% disqualifies a person from a loan, then they had zero buying that house in the first place.
New Jeep Cherokees start at less than $35k. Trailhawks are under $45k.
If you want a hot rod, just pay.
My wife wants a Maserati. She’ll need her mother to pay for it…
Most car loans require a 10% down payment or more.
My BIL who did just about everything possible wrong with his kids, particularly financially speaking, got a new pickup on a 12 month lease for one 18 year old son. It was $99 a month with 12k mile limit. Well the kid gets a job as a pizza delivery driver and 6 months into the lease dad has to turn the truck in and pay off the lease (the kid had no money). To deliver pizzas. This was quite a ways back as you can guess by the numbers.
A rare Invader Zim reference! Outstanding!
That’s a lot farther East than where I go. But it seems like a fun place. I hang around from Pensacola to Destin when I used to vacation. Don’t know if I’ll be able to do that anymore courtesy of Brandon.
Probably a lot of those $70,000 Jeep Renegades that those urban clowns just had to have.
Most dealerships will keep a used car on their lot for 45 days. After that it’s heavily discounted for a few days and if it still doesn’t sell it goes to auction. If you catch it just right you can sometimes get a good deal.
In Texas, creditors can’t stockpile repoed cars. The financier does not own the repoed car, but merely has a security interest that allows them to take possession of the car and sell it in a commercially reasonable manner.
Are there states where the financier just keeps the car, and has good title to it? In the absence of a commercially reasonable sale, I do not see how it may be determined if the buyer still owes the financier, because the car is worth less than the loan balance, or if the financier owes the buyer, because the car was worth more than the loan balance and cost of repo. (It happens — but not often.)
Slum lord./s
“This tells me the chip shortage is yet another way they are trying to nudge the public away from ICE cars.”
That is something to think about, but I can’t understand why an EV would have have any less chips?
Did you read the comments on the Newsweek site? They deserve their misery. What a bunch of dumbasses.
That is something to think about, but I can’t understand why an EV would have have any less chips?
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