Tuesday, March 03, 2009

Car Sales and the Housing Bust
Automakers are posting horrible sales, again. I do not read the sales figures that closely, but most of the decline in sales is blamed on the economy and fears of job loss. One item I have not seen blamed for the auto bust is the housing bust. I suspect that many of the auto purchases of the mid-2000s were made with home equity loans. These loans were at lower rates and longer periods - therefore lower monthly payments - than traditional car loans, plus they were tax deductible. These loans are gone and car sales are feeling the affect.

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