The Car Market Bubble Just Popped

Enter at https://www.omaze.com/stephan for your chance to win an Unplugged Tesla Model S Plaid S-APEX and support a great cause. Add me on Instagram: GPStephan - Video Inspiration From Automotive Life - HELP GET HIM TO 100K SUBS: https://youtu.be/zhmr8w-A7YQ GET YOUR FREE STOCK WORTH UP TO $1000 ON PUBLIC & READ MY THOUGHTS ON THE MARKET - USE CODE GRAHAM: http://www.public.com/graham Trade Bitcoin, Doge, and other crypto with zero fees on FTX. Use my referral code GRAHAM and get up to $100 FOR FREE: https://ftx.us/partners/graham GET MY WEEKLY EMAIL MARKET RECAP NEWSLETTER: http://grahamstephan.com/newsletter The YouTube Creator Academy: Learn EXACTLY how to get your first 1000 subscribers on YouTube, rank videos on the front page of searches, grow your following, and turn that into another income source: https://the-real-estate-agent-academy.teachable.com/p/the-youtube-creator-academy/?product_id=1010756&coupon_code=100OFF - $100 OFF WITH CODE 100OFF As supply chain constraints, production, and chip manufacturing begin to improve…used car prices are beginning to drop, down 6.4% since the record high in January. This also marks the FOURTH consecutive month that auto prices have fallen…and, the FIRST month that sales declined 17%. Even though this is certainly GOOD NEWS if you want to buy a car…it’s a NIGHTMARE for banks who have LENT MONEY on those cars, at a value that’s rapidly beginning to fall. Right now, “investors are willing to bet that consumers will keep paying their loans in the near term” - because, after all, a car is an essential purchase that allows them to go to and from work, or be used as a way to make money…although, that might not necessarily continue. A survey from Fannie Mae found that: “16% of consumers said they expected to lose their job in the next 12 months.” - and, THAT is generally the time where finances get tight, and people cut back on the items that might be costing them too much money…or, in this case, certain Auto Loans. The WallStreetJournal even found that “more subprime borrowers have start missing payments” as rising prices force households to choose between paying for essentials and paying their monthly loans. NOW, the government is warning of a surge in CAR REPOS, and that “the problems could get much worse unless we stay ahead of it.” The reality is - lenders have given potentially unaffordable loans to buyers, without verifying their finances, on cars with overinflated values that can’t be sustained without a chip shortage…and, it’s only a matter of time until - EVENTUALLY - things have to come back down and return to normal….after all, used cars can’t sell for more than NEW, FOREVER. ON THE BRIGHT SIDE….logistically, don’t expect this to be ANYWHERE NEAR the size of the housing market collapse…because, loan sizes are SIGNIFICANTLY SMALLER, and it’s MUCH easier to repo and auction a car than it is to foreclose on a home. In addition to that, most auto loans have a fixed interest rate…so, even though a buyer may owe WAY MORE than what the car is worth…as long as they can continue making that monthly payment…the solution is to simply hold on to the car longer than you expected, and keep driving it until - eventually - you break even. The best strategy, in this case…is to simply recognize that 40% year-over-year price appreciation is by no means normal, or to be expected…and, if you find yourself with a loan that MIGHT not be affordable….NOW would be a good time to either lower your interest rate, or drive something in a more affordable price point to save the extra money. My ENTIRE Camera and Recording Equipment: https://www.amazon.com/shop/grahamstephan?listId=2TNWZ7RP1P1EB For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness@gmail.com *Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. This is not investment advice. Public Offer valid for U.S. residents 18+ and subject to account approval. There may be other fees associated with trading. See Public.com/disclosures/