None
Not the same
Auto finance insiders say there's no parallel between today's subprime auto loan growth and the prerecession housing bubble.
• Compared with mortgages, consumer auto debt is small and loan defaults are low.
• Lenders monitor auto loan portfolios for risk.
• Investors in subprime auto loans did not lose money in the Great Recession.
• Investors expect the underlying asset, cars, to depreciate, not appreciate, as is expected in housing.
• Subprime auto loans are growing because they fell so low during the recession.
Auto retailers and lenders are trying to debunk the notion that a bubble of rapid growth in subprime auto loans will lead to a wave of defaults, tanking the U.S. financial system the way subprime mortgage defaults did before the 2008-09 recession.
