We've written frequently in recent months about the coming subprime auto crisis which will very likely be prompted by a wave of off-lease vehicles that will flood the market with used inventory over the coming years. In fact, Morgan Stanley recently predicted that the surge in used inventory could result in as much as a 50% crash in used car prices over the next couple of years which would, in turn, put further pressure on the new car market which has already resorted to record incentive spending to maintain volumes.
Here are just a couple of our most recent notes on the topic:
Signs Of An Auto Bubble: Soaring Delinquencies In These 266 Subprime ABS Deals Can't Be Good
New Warning Signs Emerge For Subprime Auto Securitizations
Auto Lending Update - Someone Please Explain How This Is Not A Bubble
Of course, while pretty much anyone has been able to purchase that brand new BMW of their dreams over the past 5 years...courtesy of a surge in subprime lending volumes....
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8 comments:
Its the prices. Im not paying as much for a truck as i paid for my house less 15 years ago
Can't be much of a house. The last one i bought was just over $500k. Waiting patiently for the auto market to implode and pick up a nice Mercedes coming offa a 2-3 year lease at 60% less than a new one.
Just do like they do in Ocean City when it's time to remodel, you have a fire!
I live in WV now and bought a Taj Mahal house for under 200K. You need to move.
500k that's it? I paid 1.8 and just picked up a new Benz. Hard work and you will get a bigger home.
Doubled in value (not in MD) and paid cash for it. Have Benz and 3 other vehicles. Never pay retail for depreciating assets. That's why those people are in trouble and have 6 year car loans.
Hard work has given me a fat bank account to spend on other things - rather than a $1.8M home. Good grief, I can only use one room at a time, as well as a bathroom. Plus the cleaning - no way. Travel and have someone else clean up for me! My one level 4 bedroom, 3 bath on 45 acres ON the water is no where near $1.8M. More bang for my buck!!!
Seems when the collapses happen the banks never lose,there will be no deals.
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