Personal Finance

The Car Loan Bubble Just Popped (HUGE Recession Indicator)

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The Car Loan Bubble just popped, which is normally a BIG recession indicator.

Car repos are exploding which usually signals the start of a recession. This is a leading indicator, not a lagging indicator.

“Loan-to-value ratios, or the amount financed relative to the value of the vehicle, are around 140%, versus a more normal 80%”

There are $1.42 Trillion in auto loans, making it the 3rd largest consumer credit market in this country.

Average credit of borrowers has declined which is increasing the risk of default on these car loans.

46% of loans are underwater, meaning people owe more on the car than what it is actually worth.

New auto loans skyrocketed after multiple rounds of stimulus, which brought Q2 of 2021 up to $220 Billion worth of total originations.

There are three big factors to understand why the car loan bubble popped, which we will get into this video.

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⏰ Timestamps ⏰:
2:04 – Intro
2:32 – Car Repos Are Exploding
3:02 – $1.42T Auto Loan Market
3:45 – New Loans Skyrocketed After Stimulus
5:03 – Credit Scores Are Getting Worse
6:00 – The Automotive Recession Is Here
7:00 – Policygenius Spot
8:12 – Car Prices Reaching Equilibrium
13:01 – How Can You Benefit?
14:17 – My Thoughts.
17:46 – LOL

Instrumental Produced By “iAmHaywood” on IG


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