The Auto Loan Market Is Facing a Meltdown, and These 3 Stocks Could Get Burned
The record-breaking $1.3 trillion worth of auto loan debt Americans are collectively shouldering is starting to show some serious cracks. As of late last year, auto loan delinquencies were at an eight-year high, and suspiciously, that was right around the same time the number of rejected auto loan applications jumped. That's despite one of the best -- and best-paying -- job markets on record.
It's anecdotal evidence of a brewing problem likely to be worsened by the coronavirus pandemic. With millions of people newly out of work and countless more adversely affected by the economic slowdown, even more car payments could start to be skipped as incomes and credit scores sink hand in hand.
That puts all lenders on notice, but could prove particularly problematic for Credit Acceptance (NASDAQ: CACC), Santander Consumer USA Holdings (NYSE: SC), and Ally Financial (NYSE: ALLY), each of which relies heavily on auto lending.
Source Fool.com
