America’s Driving the Next Subprime Bubble (Bloomberg)

Just as home sales and subprime mortgages inflated the real estate bubble in 2006 and 2007, today the U.S. auto industry is watching sales soar on the wings of unqualified buyers. The Fed’s stimulus plan for keeping interest rates artificially low is making it easier for consumers with shoddy credit to buy cars, and for yield-starved investors to purchase bonds with more risk attached to those auto loans.  According to Experian Automotive, these types of higher-risk auto loans now make up 27 percent of new car sales, the highest percentage ever since this statistic started being tracked. Don’t we already know how this story ends?

Wayne Ellis

Wayne Ellis has been involved in the financial publishing industry for more than 15 years. During that time, he has helped to edit, to market and to launch products and services for Ernst & Young, LLC, Fidelity Investments, Agora, LLC, and Eagle Financial Publications. He currently puts his broad-based experience and industry expertise to use as a contributing writer for Eagle Financial Publications. He also is a graduate of Arizona State University.

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