When the mortgage crisis hit, many people thought that it couldn’t take down the entire economy and bring about recession. They were wrong.
So I have no way of knowing just how much damage the subprime bubble in used car loans is going to do. It could be less traumatic than the crash of 2008. But it could also be much worse as far as I know.
Auto loans to people with tarnished credit have risen more than 130 percent in the five years since the immediate aftermath of the financial crisis, with roughly one in four new auto loans last year going to borrowers considered subprime — people with credit scores at or below 640.
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