Auto & Student
Auto Loan Bubble Approaches $1 Trillion USD
As with every credit fueled asset bubble, the end stages follow the same “Originate or Decimate” model. As the pool of credit worth buyers dries up, lending standards must be loosened in order to continue to feed the securitization machine.
According to Bloomberg, subprime loans are now feeding more than $13.2 billion of bond sales on Wall Street this year.
If that wasn’t scary enough, the increase in subprime is also joined by increases in the average amount financed ($28,710 – new) & the average term (67 months – new) both of which are all time records.
Overall, the auto loan rejection rate has now hit a new all time low of just 3.3% in June.
This won’t end well.