The Vehicle Industry Bubble Could Lead to a Crash
If you’ve been watching the news recently, you’ve probably heard about the Vehicle Industry Bubble. It’s a scary situation that could eventually lead to a crash.
The car industry is experiencing a bubble due to a combination of factors. This includes a computer chip shortage, low inventory, high demand and a lack of incentives.
Definition
The Vehicle Industry Bubble is a condition that is caused by over-inflated prices for used cars. The condition is a result of increased gasoline prices and a weakened automotive market.
It is not a systemic risk, but it will be bad for lenders that largely finance people with poor credit or rely on used car values for loan approvals.
A vehicle manufacturer may offer incentive programs that encourage consumers to purchase a new vehicle, including cash rebates or low-cost financing and leases.
One major issue is that many consumers financed vehicles at highly inflated prices …
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