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It's personally weird to me that auto loans can be a serious bubble, since I would not feel comfortable buying a car unless I have 10x the sticker price in spar

It's personally weird to me that auto loans can be a serious bubble, since I would not feel comfortable buying a car unless I have 10x the sticker price in spare cash, or free cash flow that covers it. Seriously, since it's just a depreciating asset with maintenance liabilities.

thesagan 10y ago
On the lender side: I wonder if somehow auto loans are packaged and resold like some other loans, thereby hiding/moving the risk away from the originating lender and into more unsuspecting hands? Not sure how that might work. If it does get repackaged and resold, that may explain some of the reckless lending, if that can be said to exist.
- masonhensley 10y ago
  They are - https://www.bloomberg.com/news/articles/2016-03-21/this-is-what-s-going-on-beneath-the-subprime-auto-loan-turmoil https://www.bloomberg.com/news/articles/2016-03-21/this-is-w...
  - thesagan 10y ago
    Thanks for the link! Sounds like at least one rating agency has some concern.
bdcravens 10y ago
I'm sure you know you are the exception. About 85% of all new vehicles are purchased on credit; the US is approaching $1T in auto loan debt.
- stephancoral 10y ago
  1.1 trillion, a number that actually surprised me. According to this article, auto loans are "the second-fastest growing consumer debt market" http://www.huffingtonpost.com/allan-smith/the-us-auto-loan-debt-mar_b_11911206.html http://www.huffingtonpost.com/allan-smith/the-us-auto-loan-d...
kylehotchkiss 10y ago
There's a lot of places in USA where holding a job is entirely dependent on reliable vehicle. What can you buy, short of some houses, that isn't a deprecating asset?
- ericzawo 10y ago
  Do some research and you can get yourself a really nice watch for a grand that will almost certainly appreciate. :)
  - Inconel 10y ago
    Is this really the case? Watches and small mechanical things are an interest of mine so I watch the market pretty carefully but I can't readily think of any $1k and under watches that appreciate. New watches in that price range will be very unlikely to appreciate, even in the high end segment appreciation is unlikely outside of maybe Rolex or some low production pieces, but those are all significantly over $1k. Prices have gotten pretty high in the vintage market as well, and that is fraught with risk since fakes and partially original watches are so common.
deleted 10y ago
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thesagan 10y ago

On the lender side: I wonder if somehow auto loans are packaged and resold like some other loans, thereby hiding/moving the risk away from the originating lender and into more unsuspecting hands? Not sure how that might work. If it does get repackaged and resold, that may explain some of the reckless lending, if that can be said to exist.

masonhensley 10y ago
They are - https://www.bloomberg.com/news/articles/2016-03-21/this-is-what-s-going-on-beneath-the-subprime-auto-loan-turmoil https://www.bloomberg.com/news/articles/2016-03-21/this-is-w...
- thesagan 10y ago
  Thanks for the link! Sounds like at least one rating agency has some concern.

bdcravens 10y ago

I'm sure you know you are the exception. About 85% of all new vehicles are purchased on credit; the US is approaching $1T in auto loan debt.

stephancoral 10y ago
1.1 trillion, a number that actually surprised me. According to this article, auto loans are "the second-fastest growing consumer debt market" http://www.huffingtonpost.com/allan-smith/the-us-auto-loan-debt-mar_b_11911206.html http://www.huffingtonpost.com/allan-smith/the-us-auto-loan-d...

kylehotchkiss 10y ago

There's a lot of places in USA where holding a job is entirely dependent on reliable vehicle. What can you buy, short of some houses, that isn't a deprecating asset?

ericzawo 10y ago
Do some research and you can get yourself a really nice watch for a grand that will almost certainly appreciate. :)
- Inconel 10y ago
  Is this really the case? Watches and small mechanical things are an interest of mine so I watch the market pretty carefully but I can't readily think of any $1k and under watches that appreciate. New watches in that price range will be very unlikely to appreciate, even in the high end segment appreciation is unlikely outside of maybe Rolex or some low production pieces, but those are all significantly over $1k. Prices have gotten pretty high in the vintage market as well, and that is fraught with risk since fakes and partially original watches are so common.

deleted 10y ago

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