Unable to afford homes, Americans dive into subprime auto debt

http://www.mybudget360.com/auto-debt-subprime-auto-loans-grow-car-financing/

This is kind of funny, in a tragic sort of way.

Many Americans cannot afford their homes. After the subprime mortgage crisis, banks began tightening credit and getting more strict about who they would lend to. Now, it seems, these same Americans are turning to auto loans.
I imagine we'll see the same thing happen with auto loan financing that we saw happen with subprime mortgages in 2007.

 

Hangovers from the financial crisis are still lingering for many big financial firms...

These big companies had a terrible 2016
Wednesday 28th December, 2016 - It's been a tumultuous year on many fronts. In the business world, some big names have gone through particularly grueling times in 2016. Here are the ones that we think had a year they'd rather forget:

 

One of the causes of the mortgage crisis was government pressure on banks to lend to borrowers who had scant possibility of repaying the loans.

 

Zero Hedge has some recent articles on it:

Subprime Auto Loans are Defaulting at Fastest Rate Since 2008 - article October 2019

Subprime Auto Loans Explode, "Serious Delinquencies" Spike to Record - article February 2020

Auto dealers could suffer some serious hurt if the loan financing companies they are expecting receivables from go bankrupt.
More than 85 percent of new car sales are bought on credit.

 

Economy based on consumerism has debt problems? Hold the front page!

The problem is structural weakness in the US economy. That reflects too much reliance on poverty pay and too much focus on capital-gains profiteering. A short run outlook is engineered which increases the importance of consumerism to stabilise the economy. Of course that consumerism is no long term fix. Perhaps borrow from the Marxist analysis into underconsumption? There is always a tendency towards crisis which can only be alleviated by government waste (e.g. US ridiculous levels of military spending).

 

FFS ppl, auto loans are the worst loans!

Use that money to take an intro class into automechanics, buy some basic tools and a used car.

You'll have money left over.

 

Ride the wave, buy a cargo van and live in the box.

 

Um... maybe what you people don't realize is these loans could end up affecting you, even if you don't own a car.

Remember the sub-prime mortgage crisis in 2007 that led to the Recession?

But in any case, it is an indicator that Americans, as a collective, still have a debt problem, and that did not just go away after the Recession.
Maybe partially because many Americans are irresponsible, and partly because many Americans are still financially struggling.

And anyone that owns a car dealership or works for a car dealership, should be particularly concerned too. A massive default on auto debt might push some of the dealerships out of business, or result in layoffs. Certainly the finance companies that underwrote the loans will not be doing too good.

 

I paid my truck off 3 weeks ago. Perfect timing and it feels good.

 

Im not sure I know what you think i don't understand but I'm willing to listen to your advice.

I'm fairly well insulated from any turns in the economy.

 

Ok, so you see the allusion between "subprime auto debt" and "subprime mortgage debt", and thus the implication to the 2007 Housing Crisis and Recession, and everything that entailed?

 

But how's your overall debt? Are you an outlier in the US and not one step away from calamity? Its the American Dream after all...

 

I'll be completely debt free in less than 5 years, including my home.

 

You do realise that's anti-American don't you?

 

people gotta have their fancy shiney things...

even amidst this virus debacle, peeps are running up their debt while deferring mortgage payments that'll be due in full the moment the shutdown (quarantine) ends.

the home improvement centers are having record sales. peeps are bored and so they spend...

most of those peeps dont have any back up funds banked, they live paycheck to paycheck while floating their lives on credit, using visa/mastercard to pay bills...

what's really funny is that's exactly what big biz does, the difference being they have 'clout' to force governments to bail them out, all at the expense of those peeps that have no real money to pay their debts.

truly laughable, yet we carry on as if nothing matters... because 'economy' is built upon people buying & selling items/products. it's the transactions themselves that matter.

krazy ideology...

 

I've proven my loyalty. America can get over it.

 

I'm totally debt free. I even pay off my credit card each month.

 

Without consumer debt, the American economy would go south. Its a shame mind you. Perhaps you're fighting to change the US economy and shift away from its consumerism base?

 

I'm simply doing what's best for my family. Just like I feel Trump is doing what's best for America, even if it is sometimes a little painful.

 

Yes, it's a shame the American economy has become so dependent on consumer debt.

 

Trump is a silver spooned bully. His understanding of economics is zilch.

 

Yet he is doing for America what I am doing for my family. I am minimizing my reliance on other people and he is minimizing reliance on other countries. We make enough oil to not rely on OPEC, we limit immigration to people who can contribute to American culture, we build our military to achieve peace through strength. At the same time, we are not denying help to the world and only demand that they not work against our interests in exchange for our aid. It sounds a lot like my personal beliefs.

 

As I said, knows naff all econonics

 

lack of regulations? bush did not want the regulations to prevent this....

https://www.nytimes.com/2008/12/21/business/worldbusiness/21iht-admin.4.18853088.html

"From his earliest days in office, Bush paired his belief that Americans do best when they own their own homes with his conviction that markets do best when left alone. Bush pushed hard to expand home ownership, especially among minority groups, an initiative that dovetailed with both his ambition to expand Republican appeal and the business interests of some of his biggest donors. But his housing policies and hands-off approach to regulation encouraged lax lending standards."

"Bush Ties Policy to Record Home Ownership" March 26, 2004

https://www.foxnews.com/story/bush-ties-policy-to-record-home-ownership

"Late last year, Bush signed the American Dream Down Payment Act (search) to help families that can afford monthly mortgage payments but not the down payment or closing costs associated with buying a house. The legislation authorizes $200 million a year in down payment assistance to at least 40,000 low-income families."

 

Right wingers always push home ownership. Evidence shows it can sustain higher poverty and lower welfare benefits. Its a crucial part in ensuring workers do not get uppity. Live to pay back debt, that's your lot. That and watching the next box set.