Pop Goes The Car Bubble . . . And It May Not Be a Bad Thing

[BADecker]

Pop Goes The Car Bubble . . . And It May Not Be a Bad Thing

The seven-year loan.

"Free" money (zero or very low interest).

Give-away leases.

The car industry is riding a bubble that's proportionately as large as the housing bubble of a decade ago. And it is going to pop. For the same reason that a wave has to crest and wash ashore, once set in motion.

Signs of trouble abound. They build them – but no one comes. Not without inducements that amount to giveaways.

For several years now the car manufacturers have been resorting to truly desperate measures to prop up new car "sales" – in air quotes because it's a dubious proposition to describe as a "sale" a transaction that involves exchanging the item for  a sum insufficient to cover the cost of its manufacture, plus a profit sufficient to make the exercise worthwhile.

Yet that is exactly what is going on.

Read more at https://www.lewrockwell.com/2017/06/eric-peters/pop-goes-car-bubble/.

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[BADecker]

It's a great time to invest. Reliable Investments on Vimeo.

https://vimeo.com/70044764

[squatz1]

I was actually learning about the auto loan bubble in one of the investment courses which I take and it went over how this bubble isn't even going to be as horribly close to the one that was seen in 2008 in regard to the mortgage market. There are a few pretty evident things when you compare the two, as a car is going to be something that's going to be easy to liquidate and sell off to someone else compared to a house-- which is going to take months of inspections, paperwork, and so on to be able to even start the process on selling it.

So, that's something that's going to make this bubble a little easier to be able to get over-- Plus I think something like this MUST happen for anything to be able to really happen when it comes to regulation and such, because without people really getting hurt in their wallet they're not going to be ones to change that quickly.

So, not a bad thing necessarily.