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Carmageddon: The makings of the next credit crisis could be in your driveway

EXEA189

Ready to race!
Location
Rocky Mountains
Used-car prices are sliding, and some warn that this trend could have sharply negative effects on both relevant stocks and on the economy as a whole. Indeed, the number of cars per household has reached all-time highs and car-dealer inventories are rising, according a Deutsche Bank report published this month. Also this month, Bank of America Merrill Lynch published a report titled, "Are we heading into a car crash?" and highlighted weak March auto sales as a potential warning sign for the auto sector.

http://www.cnbc.com/id/104422124
 

EXEA189

Ready to race!
Location
Rocky Mountains
UPDATE :: U.S. car sales for April are projected to be the fourth consecutive monthly decline for the industry, and the longest losing streak since the market bottomed out in 2009. Used car prices are sliding, and the number of cars per household have reached all-time highs, along with dealer inventories.

Don't contract mural dyslexia.


http://jalopnik.com/new-car-sales-are-in-the-longest-losing-streak-since-20-1794830763?utm_campaign=Feed%3A+jalopnik%2Ffull+%28Jalopnik%29&utm_medium=feed&utm_source=feedburner
 

Obsrvr

Ready to race!
Location
USA
UPDATE :: U.S. car sales for April are projected to be the fourth consecutive monthly decline for the industry, and the longest losing streak since the market bottomed out in 2009. Used car prices are sliding, and the number of cars per household have reached all-time highs, along with dealer inventories.

Don't contract mural dyslexia.


http://jalopnik.com/new-car-sales-are-in-the-longest-losing-streak-since-20-1794830763?utm_campaign=Feed%3A+jalopnik%2Ffull+%28Jalopnik%29&utm_medium=feed&utm_source=feedburner

Could be a leading indicator to a recession. With Brexit and possible Frexit etc and US market near all-time highs, after an 8 year run. Then we got the North Korea situation. OTOH, car prices could just flatline white the markets keep going higher, for several more years. Because only a few really know what's going to happen, and they are 2 crooks at Goldman Sachs & 1 guy incognito driving an ice cream truck. Or something like that.
 

EXEA189

Ready to race!
Location
Rocky Mountains
Lenders are tightening the spigot on new auto loans, making it harder for U.S. consumers with weak credit to buy a car, data from the Federal Reserve Bank of New York show.

New car loans for subprime borrowers fell in the first quarter to $25.9 billion, the lowest in two years, according to the New York Fed’s quarterly report on household debt and credit. Drivers with credit scores below 620 now comprise less than 20 percent of new loans, down from almost 30 percent a decade ago. Borrowers with the highest credit scores -- 760 or more -- made up nearly a third of new auto loan originations in the first quarter as lenders target the safer deals.

While caution may be good for banks’ balance sheets, it doesn’t offer much relief for automakers, who relied on cheap credit to fuel a seven-year stretch of booming sales. Now they’re boosting discounts and cutting production to address swelling inventory on dealer lots. Ford Motor Co. said Wednesday it’s cutting 1,400 jobs in North America and Asia to improve profits as the U.S. auto industry recorded a fourth straight drop in monthly sales in April, after eking out a record year in 2016.

Tighter credit “is a big impediment to future strength in auto sales,” said Yelena Shulyatyeva, senior U.S. economist for Bloomberg Intelligence. “A lot of this demand was driven by loose lending standards.”

FULL STORY: https://www.bloomberg.com/news/articles/2017-05-17/banks-tighten-auto-lending-as-more-borrowers-fall-into-default
 

BlueHen

Drag Race Newbie
Location
Delmarva
I am thankful to now own two new Mk7's purchased at a combined $14,200 (or 25.5%) off MSRP. VW is in a bit of a funk at the moment due to the EPA (and their own ethical shortcomings of course) and I figured I'd take advantage of the moment.
 

The Fed

Old Guys Rule
Location
Florida
Also, housing prices in many areas are high. And they'll go down again. It will be a double whammy. Personally, I would like to see double digit inflation again, but since a private company controls our currency it won't happen.
 

EXEA189

Ready to race!
Location
Rocky Mountains
Automakers probably will report a slower pace of annualized sales for a fifth consecutive month, according to a Bloomberg News survey of analysts. The industrywide selling rate, adjusted for seasonal trends, may have slipped in May to about 16.8 million, compared with 17.2 million a year ago. Goldman Sachs analysts said that would mark the first three-month stretch at a sub-17 million pace since 2014 when sales were still growing.

U.S. auto sales are on track to decline this year for the first time since 2009, that was the year that GM and Chrysler’s predecessors went bankrupt.
 

GLoBaLReBeL

Ready to race!
Location
South Bend, IN
Are you just copying and pasting blurbs from a website? Cause . . . it kinda sounds like you are.

This is cyclical . . look at the history of the stock market and economy, we are due for a recession in the next year or two. Just ride it out, keep saving, and everything will be OK. Always has been, always will be until another war breaks out.

:) I hope for a housing market drop!! I want to buy my next house the same way I bought my current . . . during a market collapse :) I can always refinance when the APRs drop again 3 - 5 years after I buy it. People who buy when the prices have skyrocketed have no-one to blame but themselves. Always buy within your means, never buy something you don't absolutely love, and live in a sh!tty place for a few years if you have to too get what you WANT.

Sorry, I'll leave now. Just had a talk about this with a buddy and wanted to chime in.
 

EXEA189

Ready to race!
Location
Rocky Mountains
Of course it's cyclical, and I agree that were due for another recession. I think you are wise in your outlook... spread the word. Except I don't think we'll see interest rates as low as they've been.
 

GTI Jake

Autocross Champion
Location
Charlotte, NC
Well at least my wife's big terrible SUV lease should end during this (I had no part, nor do I plan to ever take part in leasing anything). Maybe I can get her a smoking deal on whatever (used) car we replace it with.

Not really worried either way, I graduated high school in 2009 the last time the bottom dropped out and still managed to hold a job in my field of choice, buy three brand new Volkswagens, and two houses. Working hard, saving, and living within your means are key no doubt, but I'm sure anyone interested enough to read this thread knows that anyway
 

EXEA189

Ready to race!
Location
Rocky Mountains
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