From Quartz: Does the US auto-lending boom have further to go?
The cheapest form of consumer financing currently available in America is a car loan. But it wasn’t always thus. In fact, for the better part of the past 20 years, car loans have had higher interest rates than home loans.
In other words, extremely cheap financing for cars, which are underpinning booming vehicle sales, can’t be fully explained by record low interest rates across the entire US economy. Some of the dynamics at play include shifts in spending patterns—into cars and improvements to existing homes and away from new homes—and relatively loose lending standards in the auto-market.
At any rate, as we’ve previously discussed, there are reasons to keep an eye on the boom in auto lending, which is showing some signs of being in a bubble.
