---
title: "Subprime Bubble? Pure Bullshit!"
description: "Annual bankruptcy filings dip for a seventh straight year and repo rates remain historically low relative to risk."
date: "2017-03-20"
modified: "2017-03-20"
authors:
  - name: "Steven Lang"
    link: "https://www.thedrive.com/authors/steven-lang"
url: "https://www.thedrive.com/article/8462/subprime-bubble-pure-bullshit"
categories:
  - "News"
---

# Subprime Bubble? Pure Bullshit!

![](<https://www.thedrive.com/wp-content/uploads/images-by-url-td/content/2017/03/cartoonstock.jpg>)
*\<em\>www.thedrive.com</em>*

Despite the drumbeat of daily doom that the fearmongers ferociously throw into their [daily diatribes](<https://www.needhelppayingbills.com/blog/6-million-may-have-cars-repossessed-2017/>), the overwhelming majority of folks these days are having no problem with paying their car note.

In a population of [nearly 250 million adults](<https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=how+many+adults+in+usa&*>), only 771,000 declared bankruptcy this past year according to the American Bankruptcy Institute. The lowest number since 2006.

As for the riskiest loans. Those alone have risen from a credit starved 1.6% delinquency rate in 2014 to a 2% rate today. But historically, that 2% is still far away from the worst of times, and it highlights a hidden truth. [More people are getting auto loans than ever before](<https://www.nytimes.com/2016/11/30/business/dealbook/as-auto-lending-rises-so-do-delinquencies.html>). All other market segments have either remained stable or declined.

A lot of variables have helped make the subprime bubble of doom a non-event despite a drumbeat of doom [going all the way back to 2013](<https://www.salon.com/2013/11/27/americas_next_big_rip_off_car_loans/>). Personal bankruptcies have become a 330 to 1 remote reality in the modern day. Interest rates have remained near 45 year lows. The job market has recovered immeasurably over the past 7 years, and auto loans have been extended in length from a three-to-five year norm, to a seven-to-eight year period.

The longer period with lower rates translates into cheaper payments for most debtors, and often times that lower payment overrides the increased risk that comes with a longer period of payment. An overlooked truth that you will rarely see reported in today's world of [yellow journalism](<https://iml.jou.ufl.edu/projects/Spring04/Vance/yellowjournalism.html>).

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