Auto Loan Crisis Update
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- Опубликовано: 24 июл 2024
- Auto Loan Crisis Update
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Banks are notoriously short sighted. This has happened before. How could a banker think that loaning 150% on cars already overpriced would not end in disaster.
Facts!!!
That is where the big bucks are made the fellas at the top make huge bonuses on the way up. The portfolios are usually dumped on some funds and the fund manager sticks them in some pension fund or 401(k). When it goes down the Joe Schmoe is stuck with bad returns. If the bank keeps it and takes a big hit, there is always the chance that a tax payer bailout will be on the way. The worst case scenario is the one of them facing the consequences of the shortsightedness. However if you make millions on the way up, does unemployment for a year or so really matter much? Settling down in a lower paying job isn't that bad either.
The executives of the banks committed a form of accounting fraud. They boosted auto loans which looked like they boosted earnings. The executives got bonuses from all the business, later the bank goes bust or takes hugh losses. It's a form of white collar looting. It happened during the Savings and Loan crisis, the 2008 financial crisis, and it happened during Covid-19. But, economists, politicians, and regulators no longer see this as executives looting their firms. Economists don't recognize the F-word called fraud.
Because cars appreciate in value over time, no???????🙈
Because banks don't lose $$
I noticed a huge problem when dudes making min. Wage had a nicer car than me. Reminded me of the early 2000s. People were running wild with credit cards and interest only home loans.
everytime i pull into burger king. I see brand new Dodge Chargers
Yeah, that was about the time frame (2005ish) I had to learn my life lessons. I did NOT fall for it this time around. The only thing that keep me from losing everything was my home loan was only what I thought I could afford, not what the banker told me I could afford.
Early 2000s were the good times 😂.
@@w1nnin it really was. Min wage? No problem, let's get you 2 houses. Hahaha. Everyone was a baller, you just needed a fulltime job.
NINJA loans. To qualify you just need No Income, No Job or Assets.
Me, watching the automotive world burn while I continue daily driving the truck I bought new in 1998---> 🤣
Me too
Maybe less cars on the road 😊
I had the option to pay cash for a 2017 ram with 70k miles for 26k dollar's or finance a new 2023 ram for 60k dollars. I chose just pay cash and own my truck outright and couldn't be happier. It's a 5.7 beast and I owe no one anything. Total freedom
Here in NYC, I'm seeing lots of BOOTS on cars. I see more BOOTS now than I've seen for the past 30 years.
That’s a new one
I confirm with passport Bro. I see them also all time
Those cars aren't being repoed. You will notice the parking meter maids hanging around before and while its being booted. You will also see them when the car is being towed a day or two later by a truck clearly labelled NYPD. Its all because of unpaid tolls or driving tickets, not because of auto loans.
@@dreamcatcher3748 You have 30 minutes to move your car.
Your car has been impounded.
Your car has been crushed into a cube.
You have 30 minutes to move your cube.
Boots are not due to unpaid loans. Boots are due to unpaid tickets.
Thank God, I don't need a new car . I plan on driving it another 10 years and it's paid for.
Mine too! My Lexus is 16 years young and she’s going strong
That's why I have a couple extra used vehicles in good shape. It is best ,unlike the average thinking person,when they need ,they need ,and out of desperation go out and buy in a way, way overpriced market and are way over their head and loose it.you have to look 5-10 years down the road
Greed as usual is the problem, banks lending money to people that can't afford to pay them back. I am waiting on the sidelines for good deals.
Well said
It really was an extraordinary time 4 years ago. When 'stimulus' money came people spent it on the DUMBEST of crap. TVs, etc. Some people really did think it would be like that forever, where they'd get this magical check which would cover a stupid financial decision - like a car. It was so weird seeing it, and even stranger seeing how easy and happy dealers were with the irresponsibility. Eye opening.
I was laid off today from a software engineering job. I don't have any debt, but both my neighbors have been laid off and 5 of my colleagues at least! Things are going SOUTH
Thanks Brandon
@@blackhillsrider2626yes thanks Biden, unemployment has been record low under him and remain low for the longest time in almost 50
@@blackhillsrider2626other than inflation the economy is doing FAR FAR BETTER Under Biden than when 45 left office
Wow thats crazy. In some places things are looking worse than 2008
@@zilver90000 welcome to America where for decades most Americans haven’t been able to afford a one thousand emergency
Like during the housing crisis. They never learn.
exactly!
Wow, Lucky! This is some seriously in-depth info on the auto loan crisis, I had no idea things were this bad. It's scary to think that repo fees are doubling and delinquency rates are at record highs. Lumberidge sounds like a valuable tool though, especially for anyone worried about their car getting repossessed. I also never thought about how repossessions affect interest rates! This video is packed with knowledge bombs. Really makes you think twice about taking out a big auto loan right now. Looking forward to your next video on the subject!
My wife and I driving “paid for” vehicles and we are going to stay that way. Prices must go back to pre-Covid prices before we’d even think about it.
Smart play. Lots of deals coming soon lol
I dont see it. I have been waiting for this crash for 2 years now and things are higher than ever!
@@LuckyLopez777 I drove by one of our local Ford dealers this week and it actually looks like they moved a few units. They had a pretty good inventory of both kinds of Broncos and they’ve either rotated them or sold some. The front line near the street finally changed.
@@charischarichera8358Banks are pulling B.S. to keep the prices high because they know they'll lose big. But this can only go on for so long.
@@ogles824it’s seasonal adjustments and normal, mostly due to tax season and folks have cash to put down on some new wheels. Overall not good
It's ALL about GREED and how fast you can exploit our financial system!
100%
I borrowed 69,800 on a 2021 4Runner limited 4wd…..they were nuts. I’ve since traded it and then traded that car and have a Lexus GX I only owe 21,900. I’m keeping this car and paying it off. I’ll never do anything like that again….ever. Nuts. So many people are doing crazy things now
very true
Glad to see you get out of financial trouble. Lesson for a lifetime.
@@godofwar4276 agreed. The next car I buy will be a couple-year-old forerunner after this thing is paid off, but paying for it in cash. I don’t want another car loan. I’m pulling a David Ramsey. lol
I have never heard of needing references to buy a car. Let alone 7 to 11
Me either. I've never had to provide a reference to buy a car.
I just bought a 370z and the dealer and credit union didn’t ask for any verification of anything. They took my word for it combined with my credit score. Yes, I did the loan because I had other plans for the money rather than paying cash but they had no way to know I was good for it. Crazy.
Wow. Congrats on the new car Is it a manual?
The dealers and lenders can verify your payroll info through The Work Number, a division of Equifax
@@LuckyLopez777 Of course! Funny story on that - I had it in for service and they told me it would only take an hour. An hour and a half later, no car. I get a service rep to look into it and he comes back with my car laughing. None of the techs in the bay could drive a stick so they had to wait until they could find someone that could.
I find odd that lots of americans dont know how to drive manual and im not european im mexican and here almost everybody knows how to drive manual in fact big 3 sell manual pick up trucks here.
There isn't any truck or suv worth 100k and no car worth 40k just completely crazy prices and foolish people buying them
$40k car yes, 100k truck , never.
Box trucks for job sites are not supposed to be worth that much. There's nothing back there other than wasted space, heated seats and some cheap touch screen and $100k? Get out of here, it's not a 911. Anyone swapping a 1999 fully maintained truck for a 2024 chromey keeping up with the Joneses truck is financially irresponsible. NO, your family DOES NOT NEED SOMETHING SAFER, the 1999 truck is SAFE ENOUGH.
Lucky, great concise update on the repo situation and how it got here. Thanks
Have money 💴-hoping my patience will be rewarded 😎.
Lots of opportunities and deals coming soon
7-20 references????? I've been in the car business for over 20 years and ZERO lenders ask for that many references unless it's BHPH or "maybe" Westlake. Not even CAC! LOL
Why do dealerships charge hidden fees ?
Yeah that number is exaggerated. The most I’ve ever seen is 5, most of the time it was 3 and only for a really terrible app
@@jaydrains2247Everybody shops by price when they look at cars online. No one wants to sell at that price so they couch the profit into made up fees.
No dealership is considered “honest” so it’s one or the other. Someone doesn’t charge the fees, their price is higher, people think they’re trying to scam. Someone charges the hidden fees, their price is lower, buyers are upset. But they’re more likely to talk to and negotiate with the dealer with the lower price and hidden fees than they are to talk to the dealer with higher price and no fees.
I definitely appreciate the information! The repoes are insane right now. Many of them are trashed. Sometimes, you'll find a nice one. The banks are asking a 100% plus of MMR. Makes sense for them but not the next guy.
Americans won't even get the chance to refiance their cars because of how the values are dropping. I know i'll be in this boat. smh.
Sad but true. They will be too upside down.
@@LuckyLopez777 They're alot of channels that will talk about the economy from a Wall Street perspective. It would be amazing if you did one that focused on what main street American is seeing and feeling. You'd be amazing at that! 👍
Happened to a friend of mine who's $2000 upside down on his used BMW. But at least it's reasonably well maintained, so he can still use it reliably.
I definitely overpaid on my 2015 Honda Fit that I bought in 2022, but I always paid extra towards the principle each month, so I actually have $1.5-2k of equity despite the extra I paid. And once it's paid off, I'm done with loans for a while.
This is what I’ve been trying to explain to the idiots that bought over valued homes with 7-8% interest rates who think they’re going to refi in a year or two. You can’t do that if you’re upside down. If you’re good with the affording the mortgage / upkeep then no big deal but if you’re banking on that future “savings” that is quite the risky gamble.
@@CashMoneyReckadz It only works for those who pay extra towards their principal every month. And chances are most people weren't doing that.
My '91 Accord Wagon & '89 Astro still run. Astro is getting harder to find parts for, its been a good run however.
Try mexican auto part stores online, Moresa, TF Victor, Gis and Nemak still build parts for the Astro, s10, blazer/bravada/envoy/etc.
@@HIDHIFDB
Thanks, I'll give 'em a try. Still have a lot of miles left on the Astro, it just runs and runs.
Lucky, I got a few cars financed over 200% LTV and some were 2009 models with 200k on the miles, I couldn't believe what was going on and I knew it wasn't going to last.
Crazy lol. My buddy sold a new vette 15% interest at 200%.
Are you a dealer? If you are the buyer can't see how this can be good for you.
Yes I am a dealer however it's good and bad. We need prices to drop to give the consumer an affordable car but if there are no trades for new cars then the availability of used cars will be more difficult for us as a dealership. This industry is making history it's never been like this.
Excellent job, you missed o e thing. Facebook now has more cars for sale no title parts only.
Lucky, OF for you is "Only Family," 'coz this is a wholesome channel.
Super informative and well presented! Short sighted policies and greed have destroyed the car sales industry.
Instead of going to college..if i was young id be buying a tow truck & starting a repo business or a company that gets squatters out of houses fast..
Nah the repo people will be replaced with automatic repo vehicles
Cash is king. Credit unions seem to have the best rates.
Facts
This video reflects the actual truth that individuals do not know how to manage their finances and prioritize. Buying properties or even worse, an asset that depreciates significantly, that they cannot afford. Everything is on credit, credit. Driving a flashy vehicles while upside down with broken underwear’s, socks and shoes. Take care lucky.
Same cycle we've seen time and time again with lending in the US, '08 was real estate, this time it's automobiles. Maybe the US needs to start looking at laws that limit the maximum percentage of liability that a lender is allowed to finance on secured assets and/or treating willfully not paying debts within the person's means similar to how they would treat fraud or theft. ... That and start investing in efficient public transit so that everybody doesn't "need" a car
Our credit union in Western NY announced a loan sale, and rates are under 6%. I was shocked, based on what I'm hearing from you and other experts.
Few banks are trying to get prime people at 6%
Ironic, I own a dealership on niagara falls blvd
CU Here in central Ca The same 5.6% Auto loans
@@carmarketinsider which one? Gotta be tough trying to compete with west herr buying everyone up
Awesome info, thanks for sharing! (If I would only know what is a hundred thousand dollar posh... at 0:50)
I was working in my yard the other day and all I saw was wreckers coming out of my neighborhood every where with cars on them.
My friend in the commercial consulting on the west cost already feeling the pressure. Contracts are not renewed, consultants are not being put on projects, job market is tough. Layoff are beginning. Consulting is getting hit the most, since consulting projects are totally optional.
We have a crisis of financial illiteracy. People making 60k a year take out loans for 1500$ car payments and go cry on tiktok about the cost of living. These same people want someone else to pay off their student loans, give them free healthcare, and make housing a "human right". Some of these people are in for a rude awakening soon.
LUCKY, I want to know if the stupid Hugh insurance rates are ever coming down??? That' what keeping me from buying a new car. I have a great driving record and my insurance still went up. THX!
I'm doing the same thing standing by for my next purchase.
Ha! Love it. Did people not learn 2006-8 lesson?
Changed the oil and tranny fluid myself as usual in my TL with 222k on it. Runs brand new. Also have a Si with 212k modded and tuned. People are smoking crack with these loans.
My 2007 camry with 117k miles is having issues with my speakers. I never had a car payment... I should go buy a hellcat.
Yup, buy the Hellcat 😂and get 10mpg . YOLO😂
As long as your APR is higher than you MPG 😂😂😂 THEN SEND IT!!!
That's strange. I'm in that industry and have 15 different banks and none of them would loan over 130% LTV and most were no more than 120%.
Lucky, how does this affect Carvana (for example), who I figured was going bankrupt but has rebounded. Don't they underwrite their car loans? If they are holding the paper, they could be in serious trouble. Or CarMax?
Carvana is doomed. just waiting for there time to run out. Carmax has large reserves so they are fine. but it will get harder and harder to get a auto loan bigger down payments
What about the exotic car market? What are you seeing in terms of repos?
If and when the “market “ crashes” EVERYONE including the financially responsible ppl will eat a piece of that shit pie one way or another!
What do I do do with a daughter that refuses to pay final payment ?
question, were many of these car loans adjustable rate at signing.& since went thru the roof. or didnt the consumers leave a large enough margin of safety at signing for inflation?
I only know comercial loans like that. no regular auto loans
I dont see the crisis anywhere. Prices are still high!
I would look out of your area Here in Vegas is high but phx and LA are 10% cheaper
@@LuckyLopez777 Phx is still high as well.
@@LuckyLopez777 Could you please help me find information about which areas have cheaper cars?
Dealerships can keep their's cars as a consumer l don't to pay reposition fees, all those fees belong to them.
$$$
Just waiting for prices to come down so I can get a newer rav4 at a reasonable price, lol.
Does this include exotics, such as hurcans? None of these dealers want to budge
I drive an average of 2200 miles per month doing my job in sales. Why the heck would I buy a new car and rack crazy miles on it making payments, and ridiculous insurance premiums?! I drive a 2002 Honda accord, $109 per month full coverage no payments, door ding the shit out of it don’t care. My primary vehicle also paid off stays in the garage. Nobody cares what I drive except my in debt coworkers.
$109/month is high for a 2002 car. My 99 suburban is $22/month for liability or $30 for full coverage.
@@codysmith9813 job requires a certain level of coverage, it’s $157 for three vehicles here in Mexicali. 2006 Tahoe, 2007 Dodge Ram 2500 4x4.
What’s your other paid off vehicle bedsides the 2002 Honda Accord?
I went down this fullish road by having 2 new 2023 vehicles car & truck both $37k each. Lost both back in August last year because of job loss. Repo 1 and drove other to the bank to surrender. Was on time still on one but with this credit union if 1 thing is delinquent everything is delinquent goes for credit card too.
Was there a girlfriend or wife to impress with those car purchases?
@@abel4776 Absolutely not I'm single don't care anything about relationships. I just bought what I liked. And could afford it until sudden job loss unfortunately. Plus the credit union I was with has a rule if your in the negative on bills through them everything becomes negative even if other bills are on time and in the green. My bad for having 2 cars through them or I would still have one now.
Last year i found it impossible to buy a vehicle at dealers paying in full. They all want me to take a loan be ripped off unless i pay way over sticker. Ended up just buying out my lease and keeping my car.
Interesting stuff my car has been paid off for 5 years
Remember when those banks and lenders sell your repo at auction you still owe the difference and the banks can report that difference to the IRS and YOU will have to pay the taxes on it as income.
I knew a guy, may he rest in peace, who was in the car business. He had been a sales and finance manager. He was very sharp, got into the business right out of HS. We didn't have one but where this guy worked at they had a "closer" position, it was something that was new. He was the closer at the dealer he worked at and I asked what it was about. He told me, " My job is to convince people to buy a car they really can't afford." Knowing him, I believed it !
Deputy Lucky Lopez is the FEDS!! 🚔
That’s why I as a dealer don’t like to work with those type of banks
Is there a way to short these bad loans?
Long story short, I bought my wife an X5 then a Mazda CX-9 when our first then second kid was born... when the third was born, we couldn't put three children seats in the CX-9 and I swallowed my pride and bought a minivan (which I effin hate). I promised her a Toy. Sequoia when the new model was released and all kids are out of the car seats.... they are now. They want 104k for a new Sequoia, 7% lux. Tax plus 13% tax on all of that and 28k in financing charges... LMFAO, yeah, not happening. I don't mind spending money on nice things, but I'm not handing you 30k on top of an already overpriced vehicle. We'll save and pay cash when the market has settled.
So is a repo company a great business to get into now?
I drive a 2000 Jetta TDI. Its a Pos but no pmt
How many of the repos are actually from the early part of the pandemic? I would think most would be more recent like no more than 2 year old loans.
Very interesting. I think banks will be more careful in the future.
One would think but I’m afraid when all this collapses we the tax payer are going to bail these guys out again.
Back when all that money was sloshing around all our cars were paid for and had been paid for for years we just continue to do the maintenance and do any necessary repairs to keep them going. We're still driving them today no payments
Thank you ❤️
You’re welcome 😊
See a lot of no title cars for sale I assume it’s these
100s of groups on fb selling no title cars
@@LuckyLopez777 Wouldn't it be a bad idea to buy without the title even if offered a big discount?
@@godofwar4276Yes. Without the certificate of title you’re not counted as the owner. Can’t register the vehicle, you’ll be considered dodging for tax purposes, a non-registered vehicle may not be able to be insured in some instances, and if someone else rocks up with the title they have legal authority to take their property back.
WHAT repos?!
I live in Atlanta and the traffic is worse than ever
drive by a auction , tow yard and dealerships you will see them all
@@LuckyLopez777 People and RUclipsrs have been saying there’s record repos but I looked up the numbers……there were more repos in 2019, 2018, and 2017 than last year
@@LuckyLopez777the 2023 numbers are lower than 2019, 2018, and 2017
@@diegoharo7943where are you getting data from ?
the way the world is looking right now, i wouldnt make any unnecessary purchases.that money may make THE difference in a year or two.
crazy times
I bought my car in 2020 before the boom iv never had to verify anything just tell them how much I make a month and how much my mortgage is.
7 payments left on my car. Keeping it til it dies/gets wrecked.
How to start a repo business in California in 2024? Who can advise? Budget, knowledge, connections needed?
I know a guy traded in his car on a 24 Toyota rav 4 can't believe it ,10 year payments $400 a month .
I don’t get how home sales and new car sales at an all time high yet we have so many issues makes no sense
Greed and over lending
Check the new home sales data and compare that with a year ago. They are about at the same level as a year ago but the discounts, loan rate buy downs are huge. This will pull the used house market as there is tons of new construction not listed on MLS. This and the unviable Short term rentals and historically high number of rental units coming on (with lower rent) will work its way through the system. In may be the next couple of years this is going to take the same path as the great recession. The question is about the duration and intensity.
Great information
Glad you liked it
I love your industry update videos but it's freaking hilarious how few views your 6x6 build videos get
Even little old F350 tow trucks are insured for free.
will auction houses profit in this climate?
That’s what happens when duing high interest rate, transferring wealth from borrower to bond holder. 99c store/Dollar tree on fire.
facts!
Also, during the low interest rate time, over priced assets and junk are pushed down on unsuspecting or ignorant or greedy people. That started the wealth transfer.
I k ew this was going to happen but some of ppl didn’t believe when I told them
The banks are repeating the same mistakes they made that created the mortgage financial crisis back in '08. This time in auto loans. Greed!!! I hope the government doesn't bail out the banks this time.
Hi up here in Canada, I had no issues buying cars with RBC from a Honda dealership - maybe its different in the US not sure.
CA market is crazy.
Mr Luck, we can’t sit here and put all the blame on the banks. You should have started your history lesson with how the auto dealers are to blame. For example, Marking up the price of their vehicles and add crazy fees. I know you that being a car dealer and I found you as a guest on the Car edge channel. Sorry pal, the car industry did it to themselves.
If you watch my other video I blame 3 people. Banks dealers and customers. Because no one was forced to sign
as someone who rides an escooter....i love watching your videos. the world of a driver is wild!!
Smart business plan Lucky, but don't help the banks. I get it though, we the citizens will end up bailing them out or front the cost regardless.
Dude...a lot of people have been asking me about the auto delinquencies and should we concerned...i am staring at these data every f....king day.
crazy stuff
People and RUclipsrs have been saying there’s record repos but I looked up the numbers……there were more repos in 2019, 2018, and 2017 than last year
But last years numbers were close to 2019, 2018, and 2017
@@diegoharo7943interesting
They figured they were 'Too Big to Fail' and they would be bailed out. Same thing happened in Rome while Nero fiddled.
I did receive a crazy loan for a car but I am the one when banks just get a pass ;-) So no problem with me but they did not need anything to give me that loan for a crazy car. Not overprized at least and OK costs overall. Keeping the car long term. 60% paid for already.
Lucky is so funny some times hahaha
Automax of Killeen keep calling me to buy a new car with them but i refused. Get an cash car you can buy outright.
Let the pain come. No sympathy for the literal fools paying over msrp and thinking this crap was normal. Gosh…..just waiting here, patiently waiting, for deals!
lots of deals coming soon
How the High end cars sales
Tell us some repo stories!
How do I find a job? I want something part time
My grandma got denied for a loan. She told the truth on her application
Stupid is... as stupid does. Let's get real people! OMG.
You know the Economic Ninja?
God im so happy i just decided to walk
7 to 20 references?! LOL WTF, has that many?