VFacts November 2023

[b0son]

70% price increase in 4 years?! At least the Americans seem to be voting with their wallets, here, we'd just suck it up.

[Sprintey]

They also abandon their cars when they go underwater or can't make the payments.

It's staggering to think that after NINJA home loans and the GFC, we could see the US about to exactly repeat the process, using cars this time.

This fellow has a very intelligent interpretation about what is about to go on in the US car loan world:

https://www.youtube.com/watch?v=dU9XIWnPh3M

[jpd80]

Originally Posted by b0son

70% price increase in 4 years?! At least the Americans seem to be voting with their wallets, here, we'd just suck it up.

Originally Posted by Sprintey

They also abandon their cars when they go underwater or can't make the payments.

It's staggering to think that after NINJA home loans and the GFC, we could see the US about to exactly repeat the process, using cars this time.

This fellow has a very intelligent interpretation about what is about to go on in the US car loan world:

https://www.youtube.com/watch?v=dU9XIWnPh3M

I kind of think that things are a lot different to the GFC when housing and the stock market were in real trouble.
Sure the Americans are running into trouble with high priced vehicles but it’s not a uniform thing across the industry.


All of the below comments are regarding the US, not Australian car market:

One of the main differences is there’s low unemployment but people probably not making the wisest choices
with their purchases- those maxing out credit cards and getting easy finance are the ones under the most stress..

What’s hard to see in new vehicle sales figures is the difference between recent restricted supply situation and now
where buyers are definitely pulling back as the market cools. Lower inflation in the US plus promise of three rate cuts
has really lifted the stock market in recent days - some predictions of impending doom may be abating

[Sprintey]

Also the Fed template may follow the SIVB episode, so they patch up any lenders who are in trouble, the car market in US might be sour, but everything else rolls on and Powell continues the QT for a while more - just like last year.

[ToryMikey]

Originally Posted by jpd80

I kind of think that things are a lot different to the GFC when housing and the stock market were in real trouble.
Sure the Americans are running into trouble with high priced vehicles but it’s not a uniform thing across the industry.


All of the below comments are regarding the US, not Australian car market:

One of the main differences is there’s low unemployment but people probably not making the wisest choices
with their purchases- those maxing out credit cards and getting easy finance are the ones under the most stress..

What’s hard to see in new vehicle sales figures is the difference between recent restricted supply situation and now
where buyers are definitely pulling back as the market cools. Lower inflation in the US plus promise of three rate cuts
has really lifted the stock market in recent days - some predictions of impending doom may be abating

The major difference between USA and Aus in both car and housing loans is the ease of obtaining them.

Bad credit car loans are almost a meme in US culture. Here in Aus, application processes are stringent. We don't have a Fannie Mae or Freddie Mac here, never have, and we can't just walk away from our cars or homes if we can't make payments.

[jpd80]

Originally Posted by ToryMikey

The major difference between USA and Aus in both car and housing loans is the ease of obtaining them.

Bad credit car loans are almost a meme in US culture. Here in Aus, application processes are stringent. We don't have a Fannie Mae or Freddie Mac here, never have, and we can't just walk away from our cars or homes if we can't make payments.

More correctly, the process of repossession is more difficult in our country which is why
banks tend to work with people rather than take possession of vehicles, that’s normally last resort.

Thing to understand is that in a country of 330 million odd, there’s going to be a percentage
of the population who are financially irresponsible and live up to every last penny they earn.

You are quite right, our market and lenders are way more conservative, ask more “what ifs”.
The only people crying at the moment are car dealers who see profits receding as used vehicles
start coming back to more reasonable prices……house loans concerns me more but promise of
multiple interest rate drops in 2024 is obviously keeping the market buoyant…for now.