<prompt> Human: Hey everyone, during the past year, I have been following the auto sector quite extensively. Im a M.S. in Mechanical Engineering, with an emphasis on Internal Combustion Engines Emissions. From the post of the housing bubble, most people are saying there is not a bubble, but right now might not be the best time to buy. However, many completely disagree there is an auto bubble. Some are pointing out that there is no information on this. Here are my references:Reference 1 Reference 2 Reference 3 Reference 4Summary: Simply put, the losses on subprime loans are increasing, up 1.2 from last year from 7.9 to 9. Delinquency rate are almost 6 7 year high. Remember, in August 2008 delinquency rate on mortgages were 9.2 source Used vehicle prices are dropping high supply. This seems like the precursors of a bubble, since banks reference 4 have even begun to stay away from risky lending practices?  <response>: The main difference here is that auto loans are not securitized in the same way or to nearly the same extent as home mortgages were and are. Thus even if auto loan default rates skyrocketed, the fallout would be quite limited in comparison to the 2008 meltdown. e: the other difference is that cars are, by nature, depreciating assets, and lendingsecuritization models account for this. Real estate, on the other hand, is often an appreciating asset--though not always, as 2008 taught us. But the securitization and risk-rating models that were in use pre-2008 generally assumed a permanent upward trend in real estate values, so there was no risk tolerance for a market correction. 