Posted on by Californiacontrarian

The Biggest Ever !

“Potentially, the biggest financial crisis ever!” 

This was not tweeted by some ignoramus, but by someone who is a pretty smart guy … Elon Musk. But to what is he referring to? 

This tweet was in response to:

@CathieDWood,

@ARKInvest

 and 

@GuyDealership

and it was concerning the potential upcoming used car financial crisis.

The automotive market may be under stress as several experts call for a massive wave of repossessions in early 2023.

The genesis of this potential crisis is nicely summarized nicely in the following from the Epoch Times:

“Reports by the anonymous Twitter account CarDealershipGuy revealed an “extremely alarming” trend among auto lenders. The CEO behind the account claimed that many lenders are ignoring red flags associated with loan applicants who are already “underwater” on a prior auto loan.

‘This morning I discovered something *extremely* alarming happening in the car market, specifically in auto lending,’ CarDealshipGuy, who authors a newsletter for auto market insights, wrote on Twitter, catching many people’s attention.

‘I’m now convinced that there is a massive wave of car repossessions coming in 2023.’

He went on to explain that many people had no choice but to buy a costly car during the pandemic. He said car values have been falling recently, with some dropping by nearly 30 percent year on year.

‘And these same people that took out these big loans are now ‘underwater.’ Basically, they owe banks more on these cars than they are worth,’ he stated, adding that the banks are well-aware of the problem.”

Without going into further detail, the situation is more complicated as is further detailed in the Epoch Times article. Suffice it to say if you are going to need another car in the near future, perhaps you should wait, as when the s**t hits the fan, car prices, especially used car prices, are going to drop … perhaps the biggest drop ever.

12/19/22

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