The car market bubble:
~33% of Americans who financed their cars now owe more on their loans than the vehicle is worth.
This represents 31 million auto-loan accounts registered by the Consumer Financial Protection Bureau.
Making things worse, used vehicle prices in the US have dropped by ~22% over the last 3 years.
Additionally, 24.2% of vehicles traded-in had negative equity in 2024, the most in 4 years according to Edmunds.
These borrowers owed an average of $6,458 more than their car was worth when they traded it in, the most on record.
The car loan crisis is here.
Many used cars were selling for MORE than MSRP in the era of low interest rates.
Now, prices are crashing but those loans are still being held.
Consumers attempting to trade in their cars have negative equity.
Follow us @KobeissiLetter for real time analysis as this develops.
— The Kobeissi Letter (@KobeissiLetter) October 29, 2024
482 views