Today’s sub-prime auto loans are (defaulting) dropping like flies.
According to the American Banking Association, delinquency rates are rising in 7 out of 11 loan categories.
Guess who’s at the top of the list?
If you guessed student loans, you’d be close. However, the sub-prime auto loan market is currently worse than it was in 2008.
Back then, millions of people were put out of work and unable to pay their bills. The result was we got screwed by the biggest bailout in history.
What you might not know is, outside certain financial institutions (COUGH! Goldman Sachs. Cough!) the automobile industry got most of our loot.
Ten years later, history looks like it’s repeating (Or maybe you could say it’s being done by design) itself. Once again proving that HUMAN NATURE NEVER CHANGES.
The total of current total of auto loans outstanding today is over $1.1 Trillion and climbing. And some of the crazy buyers are paying as much as 29% interest for their loans.
As the saying goes: “If you can fog a mirror,” you can get a car loan.
Seriously, at 29% interest, is it any wonder that the default rate and loan fraud is higher than in the mid 2000’s?
Let’s do some rocket science math here. A $30,000 car at 29% (over 5, 6, or even 7 years) means you will eventually pay three times the original price for it.
We’re not going to predict when this bubble pops (It most likely already has) but you don’t want to be near it when it does.
Instead, discover how to protect your portfolio before the inevitable CarMageddon strikes (HERE).