Are Easy Loans Creating an Auto Bubble?

Shares of Ford Motor Company are up 30% so far this year, and booming sales of models like this F-150 pickup are a big reason why. Photo credit: Ford Motor Co.

Auto sales in the U.S. took a sharp hit during the recession, but they've since come back strong. New-vehicle sales are up over 8% so far in 2013, following on the big gains made in 2012. Those strong sales have helped shares of automakers like Ford  and General Motors  post gains that have outperformed the market.

But this all comes as other economic indicators, like unemployment, remain sluggish. What's driving these sales? One answer is "easy credit" -- and that raises another question: Is this another bubble that's set to pop?

In this video, Motley Fool contributor John Rosevear takes a hard look at that question -- and at the state of new-car financing, where loans have become very easy to get, and where subprime lending is making a big comeback.

This company could transform the auto business -- and make you rich
It's a home run investing opportunity that has been slipping under Wall Street's radar for months. But it won't stay hidden much longer. Forward-thinking energy players like GE and Ford have already plowed sizable amounts of research capital into this little-known stock... because they know it holds the key to the explosive profit power of the coming "no choice fuel revolution." Luckily, there's still time for you to get on board if you act quickly. All the details are inside an exclusive report from The Motley Fool. Click here for the full story!

The article Are Easy Loans Creating an Auto Bubble? originally appeared on

Fool contributor John Rosevear owns shares of Ford and General Motors. You can connect with him on Twitter at @jrosevearThe Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story