• May 20, 2022
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  Defaults on cars in US

  
  

  First time it's been in the news I've seen. Sub-prime car loans.
  
  Last couple years, car prices and used car prices went up, but there was tons of money from the Fed, so people kept buying things. Loans went up. A lot of borrowers don't have much for a downpayment, or have negative equity. But the car value of course depreciates, so if they were to sell a year or two later they wouldn't be able to pay off that loan.
  

   

  Those loans are owned lots by hedge funds pursuing higher return rates. You don't see a lot of banks jumping into that.
  
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  <div><b>Defaults on cars in US</b></div><div><br></div><div>First time it's been in the news I've seen. Sub-prime car loans. <br><br>Last couple years, car prices and used car prices went up, but there was tons of money from the Fed, so people kept buying things. Loans went up. A lot of borrowers don't have much for a downpayment, or have negative equity. But the car value of course depreciates, so if they were to sell a year or two later they wouldn't be able to pay off that loan. <br></div><div> </div><div>Those loans are owned lots by hedge funds pursuing higher return rates. You don't see a lot of banks jumping into that.<br></div>

  Defaults on cars in US

  
  

  First time it's been in the news I've seen. Sub-prime car loans.
  
  Last couple years, car prices and used car prices went up, but there was tons of money from the Fed, so people kept buying things. Loans went up. A lot of borrowers don't have much for a downpayment, or have negative equity. But the car value of course depreciates, so if they were to sell a year or two later they wouldn't be able to pay off that loan.
  

   

  Those loans are owned lots by hedge funds pursuing higher return rates. You don't see a lot of banks jumping into that.
  

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