On today’s episode of The Financial Commute, Chris Galeski invites Wealth Advisor Patrice Bening to discuss the car market, subprime auto loans, and the volatility of cryptocurrency. Patrice says because of the car chip shortage, the demand for cars has outweighed supply, thus increasing prices. As the Fed continues to hike up interest rates, some used car loans have gone up to 10% APR. 

Some borrowers may not have stable credit or the ability to pay these high-interest loans back, causing some to believe the subprime auto loan market may implode. Patrice says even if interest rates do level off, they will still be higher compared to the low-interest-rate environment of the past decade, and this will most likely affect the car market and auto loan bonds. Patrice and Chris advise those who are looking to buy a car to consider waiting for the market to cool.

Chris and Patrice think that keeping zero-interest-rate policy for as long as the U.S. did might have pushed investors to take more risks than they should have with volatile assets like crypto. It is important to stay level-headed and avoid giving into emotions or the fear of missing out when making investment decisions.

Listen to our previous episode to learn more about FTX’s downfall and how FOMO impacts investors.

Disclosure: Information presented herein is for discussion and illustrative purposes only. The views and opinions expressed by the speakers are as of the date of the recording and are subject to change. These views are not intended as a recommendation to buy or sell any securities, and should not be relied on as financial, tax or legal advice. You should consult with your attorney, finance professional or accountant before implementing any transactions and/or strategies concerning your finances.