Are Easy Loans Creating an Auto Bubble?

Shares of Ford Motor Company are up 30% so far this year, and booming sales of models like this F-150 pickup are a big reason why. Photo credit: Ford Motor Co.

Auto sales in the U.S. took a sharp hit during the recession, but they've since come back strong. New-vehicle sales are up over 8% so far in 2013, following on the big gains made in 2012. Those strong sales have helped shares of automakers like Ford  (NYSE: F  ) and General Motors  (NYSE: GM  ) post gains that have outperformed the market.

But this all comes as other economic indicators, like unemployment, remain sluggish. What's driving these sales? One answer is "easy credit" -- and that raises another question: Is this another bubble that's set to pop?

In this video, Motley Fool contributor John Rosevear takes a hard look at that question -- and at the state of new-car financing, where loans have become very easy to get, and where subprime lending is making a big comeback.

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9/26/2016 4:00 PM
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