No. of Recommendations: 3
...get the Proles farther in debt.
Why one of the nation’s largest auto lenders isn’t worried about high vehicle prices or ‘forever loans’
“If I just told you, ‘Car prices going up, interest rates going up, insurance prices going up,’ you would say, ‘You know what, consumers must be paying more as a ratio to the income,’” Capital One Auto President Sanjiv Yajnik told CNBC. “However, if you look at every quintile of salary and earnings of people, the payment-to-income ratio has remained fairly flat.”cnbc.com - Capital one auto forever loans used carsOf course, he is talking his book, like everyone else on bubblevision. Even if his point was valid: the bite each payment takes from a Prole's monthly income isn't rising as a percent of income, that is only half the story. The Proles are making each payment, for a much longer period, than was the case a few decades ago. That is the impetus behind 7-8 year car financing, and Pulte's proposal for 50 year mortgages: keep the monthly "manageable", by typical lending standards, by spreading the debt over many more payments. But it's still debt, that will hobble the Prole's spending in out-years.
Steve
