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Sunday, April 2, 2017

The car-loan boom isn’t the housing bubble. But there still might be a crash

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The growth in credit and fall in savings have alarming echoes of the financial crisis. But at least regulators are no longer asleep at the wheel

Could it be 2005 and 2006 all over again? Industry figures last week showed that UK credit-card debt has soared while the savings rate has plunged to an all-time low. Meanwhile, across the Atlantic, data shows that late last year car loans were being taken out at a faster rate than any time in US history.

Almost everyone in America leases a car or buys it using cheap credit. Except that they don’t take the opportunity to lower their outgoings and cut their monthly loan bills. Instead, they take the cheap credit and buy a bigger car. A much bigger car.

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April 02, 2017 at 11:20AM

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from Guardian Staff

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