Banks making loans to people who don't qualify on any standard debt/income ratios -- where have I seen this movie before?
With Carvana about to go over the cliff and CarMax probably not far behind, there will be a lot of used cars being liquidated into the market. If you need a new car but can wait, I would. On Mon, Dec 19, 2022, at 20:45, Kaleb Striplin via Mercedes wrote: > That is true, bank B could end up taking the hit, but most of these > people are trying to get out of cars they paid $10-20k too much for and > now can't afford the payments, so they buy a cheaper car with bank B > financing it. > > On 12/19/2022 7:36 PM, dan penoff.com via Mercedes wrote: >> That would seem to be a rather questionable lending practice on bank “B”s >> part, I would think. Who s to say the borrower wouldn’t default on the >> second (newest) loan first? >> >> Sure is nice to not have a car payment. >> >> -D >> >>> On Dec 19, 2022, at 8:32 PM, Kaleb Striplin via Mercedes >>> <mercedes@okiebenz.com> wrote: >>> >>> Yea, next year will be rough. Part of the reason I was interested in this >>> new job in the first place is that it deals with the fixed opps (service) >>> side of things, which in a big down turn on sales should still be good. >>> This plus we have had a lot of product issues lately which they are >>> addressing. >>> >>> The problem is, all of these people paid way over book value for vehicles >>> and now the prices are coming back down, these people are buried in them. >>> They will not have a way to get out of them. This will lead to repos >>> flooding the market. To make matters worse, typically when trading in a >>> vehicle, if the DTI will not support 2 car loans, the stips for the loan >>> require the old vehicle to be traded in and paid off. Lenders are now >>> starting to NOT require this in order to gain business. In other words, >>> you have a loan with bank A, go to a dealer and bank B sees this, but you >>> are too far upside down and bank B goes ahead and does the deal figuring >>> you will just default on bank A. I am assuming if you try to get 2nd loan >>> with the same bank, they would not do it. Banks are now starting to eat >>> each other up just to get business while they can. I think its fixing to be >>> scary and this could have effects far beyond just the auto industry. >>> >>> On 12/19/2022 7:21 PM, Rick Knoble via Mercedes wrote: >>>> Hmm. Perhaps travel will be less of an issue after the first of the year. >>>> From what I have been reading the auto market is about to collapse. It is >>>> very hard to justify an $750-$800 a month car payment when one can hardly >>>> afford the heating and grocery bills. I know folks car shop after tax >>>> season, but withholding rules changed, and folks that are expecting a >>>> large tax return are probably in for an unpleasant surprise. I don't see a >>>> happy ending here. >>>> >>>> You probably have a better feel for the dealer's situations than I do. >>>> Hopefully, I am wrong. >>>> >>>> And yeah, you were probably lied to. >>>> >>>> >>>> Rick >>>> _______________________________________ >>>> http://www.okiebenz.com >>>> >>>> To search list archives http://www.okiebenz.com/archive/ >>>> >>>> To Unsubscribe or change delivery options go to: >>>> http://mail.okiebenz.com/mailman/listinfo/mercedes_okiebenz.com >>>> >>> >>> _______________________________________ >>> http://www.okiebenz.com >>> >>> To search list archives http://www.okiebenz.com/archive/ >>> >>> To Unsubscribe or change delivery options go to: >>> http://mail.okiebenz.com/mailman/listinfo/mercedes_okiebenz.com >>> >> _______________________________________ >> http://www.okiebenz.com >> >> To search list archives http://www.okiebenz.com/archive/ >> >> To Unsubscribe or change delivery options go to: >> http://mail.okiebenz.com/mailman/listinfo/mercedes_okiebenz.com >> > > > _______________________________________ > http://www.okiebenz.com > > To search list archives http://www.okiebenz.com/archive/ > > To Unsubscribe or change delivery options go to: > http://mail.okiebenz.com/mailman/listinfo/mercedes_okiebenz.com _______________________________________ http://www.okiebenz.com To search list archives http://www.okiebenz.com/archive/ To Unsubscribe or change delivery options go to: http://mail.okiebenz.com/mailman/listinfo/mercedes_okiebenz.com
