Hey /biz/, I'm a GM at a B lot in ohio. I do mostly subprime

>>1446488
It's funny you should bring this up because it was just on a recent episode of Last Week Tonight. Anyways I think that the consensus is that there is less money in general in the car loan industry compared to the mortgage industry pre-2008. Also, of the car loan industry a smaller portion of the loans are sub prime compared to the housing bubble, so overall I think it will have a negative effect, but it will be much, much smaller than the subprime housing crisis and probably contained to the automotive and related industries. That isn't to say that it won't be devastating to the affected businesses.

>>1446488
the difference between the housing boom and auto loans is that you can more easily repossess an automobile and sell it for what was owed on the loan. The banks are less exposed.

people with money dont want or need a used car though. They buy a car new and keep it for 8 years.

people with no money have to make car payments for 5 years on a used car and the used car doesnt last 5 years and they end up having to roll the owed balance onto their next used car.

>>1446513
That's my opinion on it as it stands as well, however the affected businesses are definitely a big concern of mine since that's my livelyhood. I remember a few years back when the auctions were damn near empty because no one was trading anything.

>>1446516
From what I've seen, most people buy used. If anyone has sense with money, they buy used or lease. Fuck buying a constantly depreciating asset. But I see what you're saying.

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>>1446488

Real estate is less expendable than a car. Especailly if you have family. Don't get me wrong, there might be a bubble; I am not proficient enough to judge this (be me, Eurofag Investment banker) But if this one bursts, the aftermath will never be as severe as a housing mkts crash evolving into collapsing banks like back in 08.

Moreover, cars are cheaper than houses (by average. Don't compare a 40k trailer/crackhouse with a 150k Benz). The gross amount accumulated in car loans won't be as big as in mortgages.

Overall, it's good you notice those things and questioning 'em.

however:
>Take all the money you can get and run. Don't quit your job, but start thinking what you could work alternatively if the car market crashes. Or consider a (passive)side income. Those having a plan B are alyway better off.


tl;dr? No. But...

>>1446531
I have a few other income streams, from real estate to retail, cars are just what I enjoy. B lots are incredibly lucrative if done correctly, and I try not to set my customers up for failure, but frankly, most of them are just fucking losers who swear up and down they won't go bad on this auto loan like they did their last 3. But I actually enjoy the customers that understand they're getting fucked with subprime, and legitimately want to reestablish (auto)credit, or kids that need something more reliable than their $1500 cash car they've been driving. It'd just be a shame if the last hope for these people just completely bursts because the idiots that don't know how to pay for a car ruin it for everyone involved.

Needless to say, I'm only 21, so if the car industry goes under, I can survive it and/or find something else since I do financing, sales, management, marketing, etc. My concern lies with the people who actually work the system right and want to do better for themselves and their credit.

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>>1446589
>I have a few other income streams
>Needless to say, I'm only 21, so if the car industry goes under, I can survive it and/or find something else

See, that's all you should worry about. You seem like a smart kid.

It's also heartwarming how you care about your clients. But let's be honest: If shit goes down, you won't be able to help them. Neither will they come and say:" you took such good care of me and my car loans all these years, I'm offering you half of my paycheck since you're unemployed now."

We call it capitalism. The sooner you realize it's an acutal war (with $$$ as ammo) make sure you don't get hit. Otherwise you end up like your clients: They bleed out of cash and would need more to recover, but they can't.

Best of luck kid.

pic related to subprime08. It's an investment banker who got hit worst when he thought it's all over...

>>1446589
I agree that a lot of the responsibility lies with those who take out the loans, but I think it's worth pointing out that the institutions providing the loans are also responsible for the impending shitstorm. Basically subprime loans target the bottom of the genepool in terms of intelligence and responsibility, so it should be no surprise those people will default. I think the institutions should be held to a higher level than that...

>>1446677
Thanks, I appreciate the kind words. I'm as capitalist as they come, but I'm certainly not a sociopath. I recognize most my customers are morons, but there's a good amount just trying to fix failed marriages, their untrustworthy kids they co-x'd for, kids wanting to get credit started and learn how it works. To the wrong people, I'm a snake in the grass, but to the right people I'd like to think of myself as an educator, mentor if possible, and someone who can give second chances. It'd just be a shame if the only hope for these non-credit criminals would be bhph lol

What's your profession, anon? I'm always looking around the corner for better opportunity.

>>1446713
That's how I feel, too. And with these financial institutions handing out loans left and right, waiving stips, etc., it's like they've learned nothing. I realize the car industry isn't the same as the housing, but the basic principals of financing subprime are one and the same. Most my customers have no idea how financing works, even the older ones. Personally, I think this should fall back on the public school systems to teach this shit in school, but there's not helping that. It's predatory financing for a reason though, I suppose lol

>>1446488
Primarily, subprime auto loans aren't being done through banks or depository institutions; they're being done though various forms of private money lenders.

There's little about the auto loan market which is comparable to the pre-09' housing market. Unlike the previous housing market, we're not seeing rampant speculation on the part of borrowers (people aren't buying cars with the expectation of an increase of their car's value), people are still being underwritten based on income (even if their DTI is a bit speculative to lend on) rather than an assumption that they'll refinance or what-have-you, a large amount of used cars being put up for sale on the market doesn't have the same deflationary effect that housing does (cars being sold function independently), and people are buying cars for the car's utility value (people are buying cars to get from point A to B, to tow things, etc.) and not to stick it in a showroom or something like that.

Worst case, there may be a decline in the number of car dealerships and a few private lenders may implode, but there isn't the same systemic risk with car loans as there was with housing.