Are Auto Loans The New Subprime Mortgage? | The Los Angeles Times today noted that investors are pouring money into car dealerships that provide high-cost loans to those with poor credit. The dealers are assembling these loans — about one in four of which defaults — into securities, selling them off much like subprime mortgage securities were sold around the world. In fact, “in the last two years, investors have bought more than $15 billion in subprime auto securities.” The Times noted that “although they’re backed mainly by installment contracts signed by people who can’t even qualify for a credit card, most of these bonds have been rated investment grade. Many have received the highest rating: AAA.” Sounds awfully familiar.