The writing was on the wall when auto makers started going to longer and longer terms in order to get people to be able to afford their product. You can only get so much blood from people before it simply runs dry. There will be a day of reckoning. I'm over the new car mania myself. I picked up some cars that I plan to hold until they run dead and am going that route from now on.
Oh yeah there is absolutely no question that the big banks make their money off poor people which helps keep them poor. It's not like if these folks did not have a bad car loan they'd be ok financially, but the addition of the loan helps ensure they never are. But that itself isn't the issue with the bubble. The issue with the bubble is that as they reach for lower and lower rungs of the financial spectrum to sell a car to, you know they're reaching their end. I think you see the bottom of the market get denied. That leaves a glut of used cars so prices fall. That impacts new cars by higher lease prices (banks set lower residuals) and just less overall people in the market. I don't know if it will be a dramatic collapse or just a stalling, but once the banks run out of buyers for their subprime backed auto loan packages the dominoes will start to fall.
