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Title: The $934 Billion Auto Loan Bubble - Subprime lending tactics in auto loans mimic the mortgage crisis
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URL Source: http://investorplace.com/2015/02/au ... an-bubble-stocks/#.VW2tHUZhnhM
Published: Jun 2, 2015
Author: John Divine
Post Date: 2015-06-02 09:27:30 by Jethro Tull
Keywords: None
Views: 881
Comments: 58
The last major debt bubble, courtesy of subprime mortgages, wreaked absolute havoc on the U.S. and global economies when it flamboyantly burst in 2008. Auto Cars Transportation 150x150 The $934 Billion Auto Loan Bubble: 5 Stocks to Sell NowSeven years later, a new bubble threatens our economy: the $934 billion auto loan bubble. Motor vehicle loans rose for the 14th straight quarter in Q4 2014, increasing by $29 billion from the quarter before and reaching a new record high. Increasingly, people are defaulting on these loans: 3.5% of auto loans are in the 90+ day delinquency period, a sharp uptick from 3.1% in the third quarter. Poster Comment: I'm watching the Regime's mouthpieces on CNBC tout strong auto sales while never once discussing the subprime auto loan bubble. I read recently that the average car loan amount is app. $33k, payable over 7 years.
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#1. To: Jethro Tull (#0)
(Edited)
That is quite revealing...and crazy IMO. My few car loans from yesteryear were 3 year loans. I used cash or check and drive modest autos in my older adult life. I did own a Porsche in my younger, yuppie life. I brought it in from Germany and it was a lot cheaper there than in the US. It was fun while it lasted, but really not worth it to have a fancy sports car. Even in those days we said it cost $200 for a qualified mechanic to look under the hood.
Good heavens. I use to drive $200.00 bombers rather than buy on time.
I
do the same as you with cars, but we seem to be the anomaly. Car dealerships
today have become a vehicle (cough, cough) for a new finance boom; if you’re
walking you get a loan. The problem the economy faces is that these car loans &
leases have been packaged into asset-backed securities, reminiscent of the home
mortgage-based securities that went pop in 2009. As the unqualified subprime
borrower defaults, they too will pop. After what we went through I'm amazed
we're traveling down the same financial road.
My first home, brand new, cost $35k in 1971. Today that will buy me a decent Nissan.
Antique here. First home 7K, sold it for20K, recently sold for 350K. Little inflation there somewhere.
I made a $15 profit on my first car...an AMC Levi Strauss Gremlin bought for $160....sold for $175. I lost $75 on my second...bought for $100...junked for $25...a 1971 Ford Pinto in shit brown that I dubbed the Baked Potato... --Perfecting Obscurity Since 1958...
While cruising in the Gremlin, War often wondered why he had such a hard time getting a date. : ) " If you cannot govern yourself, you will be governed by assholes. " Randge, Poet de Forum, 1/11/11 "Life's tough, and even tougher if you're stupid." --John Wayne
I didn't realize you sold your home. Where are you and your cat living now?
Truth is still truth even if no one believes it. A lie is still a lie even if everyone believes it.
I just looked up my deceased grandparents' home in Brooklyn, NY. Zillow estimate is $775K - crazy!
Where was it Fred?
They didn't care about the car...only the stick shift... {;^p --Perfecting Obscurity Since 1958...
A Pinto? Seriously?
One gets the idea of worthless dollars? My olde home in Queens is now worthless as it is a slum.
Going by memory and what I saw in the 1940 Census some years ago, I think they purchased it or valued it for $5K. You know that piece of turf? My grannie never did learn to drive a car her entire life because she didn't have to. Edit: I could be mistaken. I think grandpa's annual income was $5K and the home valued at maybe $15K. Either way, inflation is going to kill us one of these years.
Gremlins and Pintos were the beginning of the dark years for American cars. Two royal POS right there. My first car was a 1961 Mercury Comet. It blew up on Flatbush Ave so I pulled the plates and abandoned it in at a bus stop :)
I bought it from a buddy who was moving to Idaho...this was 1979...I had quit school and was making $6.00 an hour running a lap machine in the West End of Pittsburgh and getting about 50 hours a week...I also played in a band that put another $50-75 in my pocket every week... I think the insurance on it cost me $15 a month...my rent, I'm sure, was $165 a month but drafts were still 25 cents at the Crafton Grill and I could get a burger at Bard's for a buck...throw in a pile of fries for 35 cents more...a Primanti's sandwich at the time was around $2.00...throw on an egg, which is mandatory, btw, and it was 25 cents more... --Perfecting Obscurity Since 1958...
I know it real well. See PM.
In Burgundy red? I recall that as being a very popular starter car at the time of my childhood...I was 7 in 1965... --Perfecting Obscurity Since 1958...
Mine was white. I paid my cousin $50 for it. We haven't spoken since.
You quit school? How did you get so smart?
US car makers went from making a car that lasted to looking for repeat customers every 3 years...there was some survey done in 1966/67 for US automakers that showed the turnover in new cars from 1957 or so was, I think, 6-7 years...but used cars were every two...they tried to take advantage of that disparity via manufacturing...even though they will never admit to it... --Perfecting Obscurity Since 1958...
I went back part-time in 1980 and then fulltime in 1982...my rock and roll dreams dashed... How did you get so smart? I read your posts on various *chit-chat* boards... --Perfecting Obscurity Since 1958...
Ha... IIRC, at the time of the Comet, Iaccoco was working @ Ford and trying to steal ideas from the Mercury division... --Perfecting Obscurity Since 1958...
That's when I first heard the term, "planned obsolescence." Weren't Pintos the subject of an investigation? Exploding gas tanks maybe?
We've never bought a new car. My wife would rather walk than have a car payment. Fedgov's Cash for Clunkers program took a lot of good used cars out of the market a few years ago, but the used market is starting to recover now. And now with Craigslist they're easier to find.
That's why I dubbed it the Baked Potato...1971 was the initial model year and I bought it used post-recall which I think was 1977*...my buddy had bought it used too but not sure when...neither of us ever had that piece of plastic installed... My buddy also had a 1965 Rambler coup with three on the column which is how he got to Idaho...he didn't come back with it...sold it to some rodhead... *1978 was the recall year... --Perfecting Obscurity Since 1958...
I bought 1952 Ford, six cylinder flathead engine for 200 bucks. Drove it 150K sold it for 100 bucks. Never put a dime in it.
War still laments not owning a Pacer for that would have been the trifecta of American POS. Well, two out of three is still pretty bad. :) My first ride was a 65 Mustang. " If you cannot govern yourself, you will be governed by assholes. " Randge, Poet de Forum, 1/11/11 "Life's tough, and even tougher if you're stupid." --John Wayne
My first ride was a 65 Mustang. That was a fun car. My brother had a '66 that I made off with when I could. He did mention he had a Rambler, so between that, the Gremlin & the Pinto I think it nudges him close toward entry into the American POS Car Hall of Fame.
You have no idea how badly I wanted one of those...AM/FM radio standard equipment!!!! My first ride was a 65 Mustang. GT with the V8? --Perfecting Obscurity Since 1958...
...I didn't...the person who sold me the Pinto did... Family car in early 60's was a Rambler station wagon... --Perfecting Obscurity Since 1958...
My first ride was a 65 Mustang. GT with the V8? I know! You could have had the joy of three on the tree too! : ) My first was a coupe with a six cylinder. My second was a 70 302 Boss. My fifth was a 69 convertible with a 351. The last one I had was a 68 CA Special with a quick little 302. Now, I am the proud owner of a 1973 Thing. I know you are seething with jealousy. : ) " If you cannot govern yourself, you will be governed by assholes. " Randge, Poet de Forum, 1/11/11 "Life's tough, and even tougher if you're stupid." --John Wayne
Yes...I wanted the Vibrant Orange!!! Actually my dream car right now is a '66 GTO...ragtop... --Perfecting Obscurity Since 1958...
“The most dangerous man to any government is the man who is able to think things out... without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane, intolerable.” ~ H. L. Mencken
First year as a separate model...love this car...
--Perfecting Obscurity Since 1958...
Family car in early 60's was a Rambler station wagon... OK then, but you do realize that your honesty removes you from further POS Hall of Fame consideration.
“The most dangerous man to any government is the man who is able to think things out... without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane, intolerable.” ~ H. L. Mencken
You kids never drove a Packard?
Ha... I RETRACT!!! I RETRACT!!! --Perfecting Obscurity Since 1958...
Comments (41 - 58) not displayed.
Top • Page Up • Full Thread • Page Down • Bottom/LatestI read recently that the average car loan amount is app. $33k, payable over 7 years.
#2. To: Jethro Tull (#0)
I read recently that the average car loan amount is app. $33k, payable over 7 years.
#3. To: Fred Mertz (#1)
My few car loans from yesteryear were 3 year loans. I used cash
or check and drive modest autos in my older adult life
#4. To: Cynicom, Fred Mertz (#2)
#5. To: Jethro Tull (#4)
#6. To: Jethro Tull (#0)
(Edited)
#7. To: war (#6)
my first car...an AMC Levi Strauss Gremlin bought for $160.
#8. To: Cynicom (#5)
#9. To: Cynicom (#5)
#10. To: Fred Mertz (#9)
in Brooklyn, NY. Zillow estimate is $775K - crazy!
#11. To: abraxas (#7)
While cruising in the Gremlin, War often wondered why he had such a hard time getting a date. : )
#12. To: war (#6)
#13. To: Fred Mertz (#9)
I just looked up my deceased grandparents' home in Brooklyn, NY. Zillow estimate is $775K - crazy!
#14. To: Jethro Tull (#10)
(Edited)
#15. To: war (#6)
#16. To: Bartcoprules (#12)
A Pinto? Seriously?
#17. To: Fred Mertz (#14)
You know that piece of turf?
#18. To: Jethro Tull (#15)
(Edited)
My first car was a 1961 Mercury Comet.
#19. To: war (#18)
#20. To: war (#16)
#21. To: Jethro Tull (#15)
Gremlins and Pintos were the beginning of the dark years for American cars.
#22. To: Fred Mertz (#20)
(Edited)
You quit school?
#23. To: Jethro Tull (#19)
Mine was white. I paid my cousin $50 for it. We haven't spoken since.
#24. To: war (#21)
US car makers went from making a car that lasted to looking for repeat customers every 3 years
#25. To: Cynicom (#2)
I use to drive $200.00 bombers rather than buy on time.
#26. To: Jethro Tull (#24)
(Edited)
Exploding gas tanks maybe?
#27. To: StraitGate (#25)
#28. To: Jethro Tull, war (#15)
Gremlins and Pintos were the beginning of the dark years for American cars. Two royal POS right there.
#29. To: abraxas, war (#28)
War still laments not owning a Pacer for that would have been the trifecta of American POS...
#30. To: abraxas (#28)
War still laments not owning a Pacer for that would have been the trifecta of American POS.
#31. To: Jethro Tull (#29)
He did mention he had a Rambler...
#32. To: war (#30)
You have no idea how badly I wanted one of those...AM/FM radio standard equipment!!!!
#33. To: abraxas (#32)
Now, I am the proud owner of a 1973 Thing. I know you are seething with jealousy. : )
#34. To: war, abraxas, 4 (#33)
sweet -
#35. To: Lod (#34)
#36. To: war (#31)
...I didn't...the person who sold me the Pinto did...
#37. To: Lod, war, abraxas, 4 (#34)
A '67 Firebird like this found a tree in B'klyn @ app. 80 MPH.
#38. To: Jethro Tull, abraxas, war, 4 (#37)
'64 riv' - a real magnet, back in the day -
#39. To: Lod (#38)
#40. To: Jethro Tull (#36)
OK then, but you do realize that your honesty removes you from further POS Hall of Fame consideration.
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