America's auto loan debt is at record levels, but most auto finance experts say strict lending criteria kept delinquencies in check in 2019.
Yet Cox Automotive believes those standards may not have been tight enough -- and chief economist Jonathan Smoke sees a fallout among subprime borrowers on the horizon.
The fixed costs for middle-income families, ie rent & healthcare, are rising at a disproportionate pace, & while not considered debt, eat into disposable income.
This helps explain why, for example, auto-loan delinquencies are the highest since 2011 despite a strong labor market.
Everyone has one or two new cars and I just don't understand how it's possible.
These things are very expensive.
Consider this: the guy that sells you your car is likely on commission. You sign on the dotted line, he gets paid.
It matters not to the salesman that you cannot afford to pay off the loan.
https://www.autonews.com/finance-insurance/record-high-subprime-auto-delinquencies-horizon-cox-says
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