Bridger PenningtonFund Launch & Investment Expert

Will The Used Car Bubble Pop?

23 Aug 2022 · 1 min

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Used car prices have soared, but Bridger Pennington sees warning signs. Easy financing (0% down, low rates) mirrors the 2005 housing bubble. As prices flatten, defaults are rising and buyers are underwater on their loans.

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Will the used car bubble burst? Many people online are touting that the car bubble could be the catalyst for an economic collapse because financing on cars is very easy. You can get 0% down, zero-rate loans, and buy whatever car you want on the lot. Kind of sounds a lot like 2005 and 2006 with buying homes. The problem is many Americans starting to default on their car payments, and with car prices starting to level off and go down, many of those buyers that bought at a high price are now underwater on their car, meaning they owe more on the car than the car is actually worth. Comment what you think is going to happen below.