Is the New Car Bubble Bursting in the United States?

Another bad sign: April has been the first month since 2009 in which car markets all across the globe have simultaneously contracted. 

Dealers are having a hard time moving their inventory. The average time a car spends on a dealer lot has increased from 55 days in April of 2015 to 70 days in April 2017. After months of sluggish sales and generous dealer incentives, the April sales drop could be indicative of an impending collapse. 

With modern automobiles being more reliable than ever, car owners are more likely to repair an old car than spend capital on a new car. This trend has been "stealing" sales from the future. Combining stagnating sales with a record high $1.2 trillion taken out in auto loans—with 25 percent signed by subprime borrowers—the recipe for disaster is at hand. 

However, the good news is that truck sales have remained strong. Although Ford and GM have reported net losses in April, pickup truck sales were ahead of last year. Often seen as an indicator of economic vitality, truck sales could help cushion the blow of the potentially-inevitable auto bubble burst.