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A comment on Ask HN: What is the next bubble in your opinion?.

Re:Ask HN: What is the next bubble in your opinion? by jdavis703 on Wednesday January 18, 2017 @09:51PM (#13432562)
I think there's a lot of bad auto loans out there. I just bought a new vehicle, and when applying for the loan I couldn't fill out half of the required information (I didn't have it readily at hand). The business office person just kept saying "that's OK, just skip that part." All in all they had barely enough information to let me prove I was who said I was, much less that I could repay the loan. This behavior reminded me a lot of what I heard up the mortgage bubble, where there was basically free money floating around.
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Re:Ask HN: What is the next bubble in your opinion? by kylehotchkiss on Wednesday January 18, 2017 @10:49PM (#13432833)
It's pretty easy to repo a car all around the country if you don't pay your bill. Add in the fact that most new cars sell with GPS transmitters built in and many car loans are provided by the car company themselves and you've got yourself a quick way to recover losses. It's harder for a bank to evict a tenant of a mortgage, harder for a bank to get money from a graduate who is buried in debt, harder for a credit card company to recover from people who aren't paying either.

The funniest thing is how much cheaper new car loans are compared to used car loans.

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Re:Ask HN: What is the next bubble in your opinion? by rorykoehler on Thursday January 19, 2017 @12:56AM (#13433411)
What use is a recovery if liquidating it will get only a fraction of the loan's value back?
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Re:Ask HN: What is the next bubble in your opinion? by kylehotchkiss on Thursday January 19, 2017 @11:02AM (#13436785)
If your credit score is bad, you are probably getting quoted a 15-25% interest rate (my first quoted interest rate was 25% at carmax when I first started working). They can recover depreciation pretty quickly in that case.
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Re:Ask HN: What is the next bubble in your opinion? by charlesdm on Thursday January 19, 2017 @06:07AM (#13434827)
I'm assuming they don't give you a loan for the entire amount, i.e. just 70% of the value?
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Re:Ask HN: What is the next bubble in your opinion? by baldeagle on Thursday January 19, 2017 @08:51AM (#13435714)
Throw in a prior car not paid off, paint/tire/oil protection and an additional warranty - it isn't hard to get up to or over 110% of the car's value.
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Re:Ask HN: What is the next bubble in your opinion? by nicholas73 on Wednesday January 18, 2017 @10:15PM (#13432668)
It's personally weird to me that auto loans can be a serious bubble, since I would not feel comfortable buying a car unless I have 10x the sticker price in spare cash, or free cash flow that covers it. Seriously, since it's just a depreciating asset with maintenance liabilities.
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Re:Ask HN: What is the next bubble in your opinion? by bdcravens on Wednesday January 18, 2017 @10:35PM (#13432766)
I'm sure you know you are the exception. About 85% of all new vehicles are purchased on credit; the US is approaching $1T in auto loan debt.
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Re:Ask HN: What is the next bubble in your opinion? by stephancoral on Thursday January 19, 2017 @12:51AM (#13433389)
1.1 trillion, a number that actually surprised me. According to this article, auto loans are "the second-fastest growing consumer debt market" http://www.huffingtonpost.com/allan-smith/the-us-auto-loan-d...
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Re:Ask HN: What is the next bubble in your opinion? by kylehotchkiss on Wednesday January 18, 2017 @10:50PM (#13432846)
There's a lot of places in USA where holding a job is entirely dependent on reliable vehicle.

What can you buy, short of some houses, that isn't a deprecating asset?

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Re:Ask HN: What is the next bubble in your opinion? by ericzawo on Wednesday January 18, 2017 @11:13PM (#13432949)
Do some research and you can get yourself a really nice watch for a grand that will almost certainly appreciate. :)
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Re:Ask HN: What is the next bubble in your opinion? by Inconel on Thursday January 19, 2017 @04:20AM (#13434314)
Is this really the case? Watches and small mechanical things are an interest of mine so I watch the market pretty carefully but I can't readily think of any $1k and under watches that appreciate.

New watches in that price range will be very unlikely to appreciate, even in the high end segment appreciation is unlikely outside of maybe Rolex or some low production pieces, but those are all significantly over $1k. Prices have gotten pretty high in the vintage market as well, and that is fraught with risk since fakes and partially original watches are so common.

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Re:Ask HN: What is the next bubble in your opinion? by thesagan on Wednesday January 18, 2017 @10:17PM (#13432677)
On the lender side: I wonder if somehow auto loans are packaged and resold like some other loans, thereby hiding/moving the risk away from the originating lender and into more unsuspecting hands? Not sure how that might work. If it does get repackaged and resold, that may explain some of the reckless lending, if that can be said to exist.
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Re:Ask HN: What is the next bubble in your opinion? by masonhensley on Wednesday January 18, 2017 @10:26PM (#13432724)
They are - https://www.bloomberg.com/news/articles/2016-03-21/this-is-w...
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Re:Ask HN: What is the next bubble in your opinion? by thesagan on Wednesday January 18, 2017 @11:02PM (#13432899)
Thanks for the link! Sounds like at least one rating agency has some concern.
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