American car buyers are borrowing like never before
Last year, Americans bought more new cars than ever before. Given that auto sales make up around a fifth of all retail spending, 2016’s banner year is being hailed as a sign of burgeoning consumer confidence across the country.
But something else is revving up, too: auto loans.
The US closed out 2016 with just shy of $1.2 trillion in outstanding auto loan debt, a rise of 9% from the previous year and 13% above the pre-crisis peak in 2005, in inflation-adjusted terms. The number of cars and trucks on the road, meanwhile, rose by only 1.5% last year, and 9% since 2005, according to US transportation department data. Total household debt levels are now a hair under their 2008 peak, with some of the fastest growth in recent years down to auto loans.
If America’s car-buying bonanza is being fueled by cheap credit, is consumer sentiment really as robust as it might seem? And is it sustainable?
Another warning light on the economic dashboard. Beep Beep Beep…..PADemD, Downwinder, canoeist52 and 5 othersdlegendary1, NV Wino, xynthee, sonofspy777, zoolook67 like this"But nothing ever changes unless there's some pain" - Tears For Fears "Goodnight Song"
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