Subprime Auto Loans: A Mess

[Jay-mo]

I was watching hockey last night and the truck commercial comes on.
"$18,000 cash back!!" touted the headline! LoL
You know pickups are overpriced, when the advertisement makes little to no mention of the actual price and only tells you how much of your own money you get to keep!

[grefer]

The Auto industry loves leased vehicles because it allows a huge number of people to drive a new vehicle who could not afford to otherwise even though at the end of it all they either buy it out or get another lease they cant afford or dont have a vehicle to drive. On the other hand you have Joe consumer who says screw that. I want to own my own vehicle. The auto makers say have we got a deal for you. Here is the MRSP that you cant afford and we will discount it to a new lower ridiculous price you cant afford but we will give you a loan with zero interest(wink wink) spread it out over 7 years make the payments biweekly so the payments seem even more affordable and presto. They have everyone in a vehicle they cant afford and locked in for a very long time. Really sweet for them not so much for the consumer who is being duped imo. Now make the comparison to ag equipment. Difference is the dealers cant sell the used stuff off their lots because farmers would figure this shit out so we will call Ritchie Bros and make it appear we are losing our asses when we arent. Win win until the music stops and who knows when that is going to happen.

[errolanderson]

If I am not mistaken the housing subprime mortgage crisis was $1.5 trillion. Sub prime car loans maybe $10b. a lot. but not in the same league by any stretch of the imagination. used car prices may in fact be keeping up the value of new cars which is what the industry and governments want. why else would the liberals give toyota billions of your hard earned taxes?

tmyrfield . . . you are right. 2008 housing subprime was much bigger than current auto subprime loans.

But there is again sister products of subprime housing mortgages again circulating through the American real estate market. Unbelievable (IMO). If auto subprime loans blow . . . this may be enough for these new housing subprime mortgages to blow . . . . It won't take much to knock the consumer over.