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The real problem will be when supply normalizes, used cars return to their sub-20k wholesale price, and a bunch of people are underwater on bad loans for (once
by RC_ITR 5y ago
The real problem will be when supply normalizes, used cars return to their sub-20k wholesale price, and a bunch of people are underwater on bad loans for (once again) depreciating assets.
Have fun with that everyone!
- Skunkleton 5y agoI wonder what gap insurance is like these days. I can't imagine that it hasn't gone up in price significantly.
- chadash 5y agoProbably the opposite. If the car is worth more than you owe you shouldn’t need gap insurance.
- BoorishBears 5y agoYou're thinking too short-term. If you accept the thesis we're in a bubble that will deflate, soon cars will be worth even less than they were during the run-up, so the difference will go from positive to deeply negative in a hurry.
- eru 5y agoPresumably, people know about this possibility, and it's reflected in prices already? For many people a car is a productive asset. As in, they need it to do their jobs. Even if it's just to commute to work. So 'overpaying' for a car now might still be the right thing to do, even if you know full well that it's gonna lose a lot of value in a year or less.