Shady dealers and easy loans for people with bad credit - US auto loans show similarities with the sub prime housing bubble
Fascinating article by the NY Times. Read the full article here.
I do think this is eerily similar to the housing bubble and the rising amount of loans should also be noted with caution. However, I do not think it will have as much of an impact as that in 08 (atleast at the current state) What do you guys think?
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Cheap credit and looser lending standards. People will never learn. I mean we all know the phrase "history repeats itself", but fuck, this is fresh in all of our memories.
Shitty predatory loans made to shitty borrowers in a shitty employment market, backed by shitty cars, securitized and then rated by shitty ratings agencies. Annnnnnnd of course if it all goes wrong "How could we have possibly seen this coming!?". Love it.
Woah hang on, before everyone starts throwing around the b-word and comparing auto-loans to subprime, first think about the fundamental differences between the underlying assets here. A car is a depreciating asset and has a fixed useful life, so there won't an "asset bubble" effect like you saw with the housing market.
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