subprime auto

[greenskeeper]

Anyone know how to "invest" in the coming train wreck that is subprime auto loan defaults? Much like the housing collapse, I believe this could be next.

I called the subprime mortgage fiasco, but didn't know at the time how to invest. Pretty much what told me things were going to go down was the NINJA and interest only mortgages.

[disneysteve]

I guess the question is who benefits if car owners default on their loans en masse?

[rennigade]

Car loans are peanuts compared to house mortgages.

[disneysteve]

Anyone know how to "invest" in the coming train wreck that is subprime auto loan defaults? .

What exactly would you be investing in? If someone can't make their car payments, the lender repossesses the car and resells it. End of story. It's a lot easier than foreclosing on a house and having to sell that. Cars are much more liquid than houses.

[Jluke]

Not sure how to take advantage of that, but if you do see it coming then one stock NOT to invest in would probably be Sirius XM.

I hope you're wrong this time

[Singuy]

Probably shorting car manufactures and also financials if there's a huge amount of defaults coming in. New car dealerships will be hit pretty hard since banks will start tightening their lending strategies which means new car sales will drop like a rock. Then you have an over abundance of used cars which will drive down prices..also hitting the car dealerships.

The banks of course will have to eat a lot of the losses due to the inability to get rid of the car since its equity drops big time(due to over abundance of used cars on the market).