Fear of an Impending Car-Price Collapse Grips Auto Industry (Another auto bailout?)


Cars are now very expensive. This has been driven by a number of factors (including government mandated features), but chief among them is the easy credit of the last 2 decades. This has made purchasing a $40,000 car “possible” for many.

(From Bloomberg)

The grave concern market watchers have is that vehicles already are starting to pile up at places where buyers and sellers make and take bids on cars and trucks — and that this imbalance will last for months.

If that fear is realized and prices plummet, it will be detrimental to automakers and their in-house lending units, which likely will have to write down the value of lease contracts that had assumed vehicles would retain greater value.

There is a bright silver lining in this story for some however. Soon a once in a lifetime buyers market in cars might become reality. The problem is one needs to have a job or the capital to take advantage of any depressed prices.

Reprinted from: https://www.ac2news.com/2020/04/fear-of-an-impending-car-price-collapse-grips-auto-industry-another-auto-bailout/

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