As the auto industry faces some of the harshest effects of the Federal Reserve’s rising interest rates to battle inflation
, a highly followed and well informed account claiming to be an anonymous car dealer group CEO.
CarDealershipGuy posted about monetary concerns following the Fed’s recent round of rising interest rates, which they say could create “the perfect storm” for consumers, dealers and lenders. “This morning I discovered something *extremely* alarming happening in the car market, specifically in auto lending,” CarDealershipGuy said in a tweet. “I’m now convinced that there is a massive wave of car repossessions coming in 2023.”
This morning I discovered something *extremely* alarming happening in the car market, specifically in auto lending.Here's what I discovered :The account went on to explain this wave of repossessions, saying that many people who took out large loans on vehicles in 2020 and 2021 are now facing significantly declining value on their purchase. When trying to trade vehicles in, dealerships will be forced to decline due to the consumer owing more than the value of the car.
As a result, CarDealershipGuy says the “only way” for lenders to finance vehicles and help dealers get cars in the hands of consumers is to waive the open auto stipulations on loans — effectively letting buyers take out an additional loan while a first loan is still in progress, creating a high risk of default.,” in response to the thread, before sharing the above warning of his own.
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