Not a Great Trend

Not a Great Trend

This article from the Wall Street Journal details how some 33% of auto loans are now “underwater”, as the loan for one car is rolled into the purchase of another. The levels now exceed anything seen historically, even in 2008.

If there’s a turn in the credit cycle, creditors are headed into uncharted territory with the number of auto deficiencies – and their size relative to asset value – that will need to be addressed. Hopefully, the situation will improve before the cycle turns for everyone’s benefit.