As auto-loan volumes explode (and terms are extended), many of the post-cash-for-clunkers herd are rapidly coming to the realization that the loan they are carrying (and increasingly not paying) is on a wasting asset. As Goldman Sachs notes, The Manheim Index measured 124.5 in March, essentially used-car prices flat yoy after four consecutive months of solid increases. On a sequential basis, the index posted a 0.5% decline in March, following a 0.2% decline in February, confirming Goldman's expectations for a correction in residual values going forward, driven by rising inventory in the off-lease channel... and this pricing pressure is likely to spill over into new car prices. Non-revolving (auto loans dominate this cohort) spiked... Just as Used Car prices start to roll over again... (for the first time since the financial crisis, 4-year price changes - average term then - are now negative) Worse yet, the most popular compact car prices are down 5.2% YoY and mid-size down 1.9% YoY. As Goldman notes, We attribute March’s sequential decline to rising supply coming to market from growing off-lease volumes. However, if there is further deterioration from here – either from a rapid used supply increase or waning retail demand – we could see pricing pressure spill over into new vehicles through a rise in incentives. * * * And of course, the subprimest of subprime are the new normal FICO score winners.