The Car Market Collapse Of 2024 Will Economically Eviscerate 50 Million Americans [Closed Captions]

When good news is bad news, you know something is going terribly wrong.

While car prices are finally falling, offering some relief for buyers, for millions of U.S. motorists, this is the beginning of a financial nightmare.

Do you remember the subprime borrower crisis? Homeowners saw the value of their homes sharply collapsing in 2008. Overnight, millions of U.S. households have gone underwater on their mortgages as they owed more on their loans than their properties were actually worth.

The same is happening to auto loans in 2024. Some may say this is a very tough time to be a car owner in the United States.

About 50 million drivers who bought their vehicles at inflated prices over the past few years are currently upside down on their loans, with many facing high negative equity, which occurs when the price of a car falls a lot faster than the owner can pay off their debt with auto lenders.

At the moment, car prices are facing a much expected correction after reaching a peak during the pandemic, with some models experiencing price declines of up to 60%. According to Bloomberg News, one in four consumers, or roughly 25% of those who financed a new vehicle with a trade-in, were underwater on their loans in the second quarter of 2024 – the highest level since 2020.