So what is wrong with autos driving the recovery? Isn’t this what we would expect given the cyclicality of auto sales? The concern is that a lot of auto purchases are being fueled with debt, given a strong recovery in the auto loan market.
Below is the net flow of auto loans from 2002 to 2013. It is a net flow because it includes pay downs in addition to new originations. As it shows, auto lending in 2012 and 2013 tops any other year during the previous expansion from 2002 to 2007 (although it is still below the amount of new auto loans in 2000 and 2001).
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