patrick.net

So we can expect high numbers of car loan defaults?

Does it mean the price of used Toyota trucks will be going down soon?

Eventually they will be giving cars away, the car lease market in the last 12 years, has put more cars on the road. Than there was before Cash for Clunkers.
Most all of the used car, inflated value, was based on the fact that there wasn't millions of $700 hoopties to be had from a little old lady from Pasadena.

Cars only worth what people can pay for them. Cars today don't have as much metal as the Clunker cars had, also the eWaste will be epic, with all of the electronics in cars.
Cars will be dumped for cheap. Right now we're seeing 10 year old cars, going for more than $10K, they will go back to under $5k to $3K.
Easing the floor for 5 to 7 year old models to fall well below the $15K that they currently go for. With such a big used car saturated market, new cars will start stripping off electronics and smart features, so they can sell them much cheaper than what a new Sedan or Coupe goes for today. Return of new cars selling at around $15K to $18K instead of mid 20's they start at now.

WineHorror1 says

So we can expect high numbers of car loan defaults?

And early lease terminations!

Putin!

Good. Used cars have been way too expensive

Tenpoundbass says

Eventually they will be giving cars away,

I certainly hope you are right. Right now it is impossible for the Cab Company to find the 1 to 2-year-old cars we like to buy.

I guess I replaced my car too early then. I just paid $12,000 for 2013 Camry with less than 50,000 miles on it. Oh well, still a good car.

Used car market implodes on bad loans…

ERECTION INTENSIFYING!!!

During the cower-in-place, production of new cars plummeted, which forced up used-car prices. People buying the used cars with 5-year (or longer) loans, might find out they are underwater on the car and decide to return the car and let the loan holder try to force them through bankruptcy (which probably won't yield much). Maybe it'll look a bit like 2008/2009 with home mortgage defaults.

With $5 gasoline, I also expect there will be a glut of used pickups and SUVs that won't look too appetizing for those that don't need that much capability. There are plenty of "capable enough" cars that get 30+ city and 40+ highway mileage. I had a VW rental on vacation with the 1.4L turbo and dual-clutch automatic and was amazed at how well that car drove while returning those mileage figures.

Are auto loans just like Mortgages? Walk away and turn the keys back over to the Loaner?

rocketjoe79 says

Are auto loans just like Mortgages? Walk away and turn the keys back over to the Loaner?

Depends...sometimes a repo man is needed. If your work has private security....don't worry about the repo man.

rocketjoe79 says

Are auto loans just like Mortgages? Walk away and turn the keys back over to the Loaner?

It's called a voluntary repossession. Happens all the time. Repossessions cost money, and if you even remotely think that you might try to get the car back, it's going to cost less if you turn it in.

HunterTits says

Her Toyota SUV got towed away and now she has a shitty 1990s Honda.

Voluntary repossessions usually aren't towed. They are dropped off at the bank, complete with keys. Sometimes they are picked up and driven back. Towing back is the least preferred method of retrieving a vehicle, but it does happen.

Ceffer says

auto loan collapse

A friend who had worked for years at UT/SW Medical School in Dallas moved back to San Antonio where his family lived. On a whim, he applied at a big family owned multi-brand dealership and was hired, never having sold a car in his life except one of his own. Within two months he was the highest settling salesman at the dealership. He said you would not believe the loan applications that would pass muster from the credit department. All many customers cared about was the monthly payment. They'd approve the wrapping of a $6,000 unpaid balance into the price of the new car as long as they could afford the payments. He said he was drawing the biggest pay checks he'd drawn in his life, but he had no free time, had to work most weekends and after 13 months left. He went back to work at UT/SW Medical in San Antone and worked until he could draw a retirement from both it and Parkland in Dallas along with a military pension, so he's in pretty good shape at 57. A lot of those chickens are going to come home to roost.

HunterTits says

Booger says

It's called a voluntary repossession. Happens all the time. Repossessions cost money, and if you even remotely think that you might try to get the car back, it's going to cost less if you turn it in.

I think that is what happened to a neighbor who parks next to me.

Her Toyota SUV got towed away and now she has a shitty 1990s Honda.

Oh, so now she is driving a car she can afford. Hmmm, imagine that.

Flood of used cars set to hit the repo market. Expect big price drops in the next month or so. Might actually make sense to even go to an auction, likely too much inventory for the normal guys to buy up.

NuttBoxer says

Flood of used cars set to hit the repo market. Expect big price drops in the next month or so. Might actually make sense to even go to an auction, likely too much inventory for the normal guys to buy up.

I thought only dealers could go to auctions.