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Started By
Message
The used car market is on the brink of an auto loan collapse
Posted on 7/2/22 at 10:14 am
Posted on 7/2/22 at 10:14 am
LINK
quote:
Just like how the housing market collapsed from the loan crisis in 2008, the same thing is said to be starting to happen in the Auto Loan market.
As the supply chain and chip crisis has improved from COVID times, used car prices have dropped for 4 consecutive months & are now down 6.4% since January.
This is a nightmare for the banks that have lent money on these cars, whose value is rapidly beginning to fall.
quote:
Just recently, Equifax reported that 8.5% of subprime borrowers defaulted on their car loans - the second-highest on record!
WSJ also found that more subprime borrowers have started missing out on payments as rising inflation made them choose between essentials & auto loans.
quote:
KPMG predicts that used car prices can drop 30% as more supplies hit the market and Ally Financial predicts a 20% drop.
The timing is a bit uncertain but it looks like it's going to unravel in the next 12-18 months.
27
Posted on 7/2/22 at 10:15 am to WPBTiger
Truck Nuts ON [OFF (In Near Future)]
Posted on 7/2/22 at 10:17 am to WPBTiger
When will be a good time to buy a new car then?
Posted on 7/2/22 at 10:17 am to WPBTiger
quote:
The used car market is on the brink of an auto loan collapse
My Toyota Tacoma laughs at this thread.
Posted on 7/2/22 at 10:18 am to WPBTiger
quote:Oh, my sympathy. Look at all these tears.
This is a nightmare for the banks
Posted on 7/2/22 at 10:18 am to WPBTiger
Looks like I'm about to get a new (used) truck 
T-nuts:
[ORDERED] not ordered
T-nuts:
[ORDERED] not ordered
Posted on 7/2/22 at 10:19 am to WPBTiger
I keep waiting for massive automotive manufacturing layoffs. Who the hell can afford a new car these days? Who are these employees making cars for?
Posted on 7/2/22 at 10:19 am to WPBTiger
Good I’ll pick up something cheap
Posted on 7/2/22 at 10:19 am to Eat Your Crow
quote:
When will be a good time to buy a new car then?
January is usually the best time to buy. New models are losing their newness.
Also, used prices always go up during tax season. Folks using their refunds as down payment.
Posted on 7/2/22 at 10:25 am to Shexter
quote:
January is usually the best time to buy
I’d have thought December as dealers are trying to reduce inventory for tax reasons. Obviously doesn’t apply in this market.
Posted on 7/2/22 at 10:25 am to WPBTiger
For the past two years it's been possible to flip cars for profit. That should never happen and is a prime indicator that this bubble is due to erupt.
Posted on 7/2/22 at 10:25 am to TigersSEC2010
Travel ball moms who picked up that new 2021 Tahoe fixing to have to downgrade to a 10 yr old Dodge Caravan.
Posted on 7/2/22 at 10:26 am to WPBTiger
I have no idea how legit this source is, but this makes me feel better.
I've been wondering what the frick I'm doing wrong with all of these people having late 2010/early 2020 model cars with the temp plates. Some of these cars are very nice. I just thought everyone was doing waaaay better than us financially. The childless couple that lives 2 doors down from us have 3 cars and a sprinter van.
Losing a used car is not the same thing as losing your shelter. I think these people will be alright.
I've been wondering what the frick I'm doing wrong with all of these people having late 2010/early 2020 model cars with the temp plates. Some of these cars are very nice. I just thought everyone was doing waaaay better than us financially. The childless couple that lives 2 doors down from us have 3 cars and a sprinter van.
Losing a used car is not the same thing as losing your shelter. I think these people will be alright.
This post was edited on 7/2/22 at 10:27 am
Posted on 7/2/22 at 10:26 am to WPBTiger
I've flipped three cars so far in this market. It's been amazing. So yeah I can see this being an issue.
Posted on 7/2/22 at 10:27 am to Shexter
quote:
January is usually the best time to buy. New models are losing their newness.
Late August.. new models come out in September and dealerships need their monthly quota
Posted on 7/2/22 at 10:27 am to WPBTiger
Not to add to bad news but bankers are telling me that the mortgage default rate now is at levels we had right before the 06 crash but banks have learned their lesson from the crash and not doing official foreclosures and kicking people out so they get stuck with tons of empty property in bad conditions but letting people stay in homes as long as they keep them in good condition while I guess they try to sell or something. Anyone else heard this too?
Posted on 7/2/22 at 10:28 am to WPBTiger
Music to my ears. I’ve been holding off on buying for awhile now hoping prices will fall. If this causes it I’ll trade my Silverado in finally.
Posted on 7/2/22 at 10:29 am to Vamos Brandonos
quote:
For the past two years it's been possible to flip cars for profit
Yep, like I said I've done it three times. Great for me, but clearly a bad sign for the market.
Posted on 7/2/22 at 10:32 am to TutHillTiger
quote:
Not to add to bad news but bankers are telling me that the mortgage default rate now is at levels we had right before the 06 crash but banks have learned their lesson from the crash and not doing official foreclosures and kicking people out so they get stuck with tons of empty property in bad conditions but letting people stay in homes as long as they keep them in good condition while I guess they try to sell or something. Anyone else heard this too?
No, but this is interesting. I've been hearing the opposite is true, where banks lending standards are still very strict due to the recession.
What bankers are telling you this? Joe schmo at the local credit union, or are we talking an executive at capital one/chase?
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