Good Luck Getting Out Of That Subprime Auto Loan When Used Car Prices Crash

We've written frequently in recent months about the coming subprime auto crisis which will very likely be prompted by a wave of off-lease vehicles that will flood the market with used inventory over the coming years.  In fact, Morgan Stanley recently predicted that the surge in used inventory could result in as much as a 50% crash in used car prices over the next couple of years which would, in turn, put further pressure on the new car market which has already resorted to record incentive spending to maintain volumes.

Here are just a couple of our most recent notes on the topic:

• Signs Of An Auto Bubble: Soaring Delinquencies In These 266 Subprime ABS Deals Can't Be Good
• New Warning Signs Emerge For Subprime Auto Securitizations
• Auto Lending Update - Someone Please Explain How This Is Not A Bubble

Of course, while pretty much anyone has been able to purchase that brand new BMW of their dreams over the past 5 years...courtesy of a surge in subprime lending volumes....

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