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No Car, No FICO Score, No Problem: The NINJAs Have Taken Over The Subprime Lunatic Asylum
One of the most trumpeted stories justifying the US economic "recovery" is the resurgence in car sales, which have now returned to an annual sales clip almost on par with that from before the great depression. What is conveniently left out of all such stories is what is the funding for these purchases (funnelling through to the top and bottom line of such administration darling companies as GM) comes from. The answer: the same NINJA loans, with non-existent zero credit rating requirements that allowed anything with a pulse to buy a McMansion during the peak day of the last credit bubble.
Bloomberg reports on an issue we have been reporting for over a year, namely the 'stringent' credit-check requirements for new car purchasers by recounting the story of Alan Helfman, a car dealer in Houston, who served a woman in his showroom last month with a credit score lower than 500 and a desire for a new Dodge Dart for her daily commute. She drove away with a new car.
So there you have it: No Car, no FICO score, no problem. The NINJAs have once again taken over the subprime asylum.
This time, it seems, is different: because anyone can get a loan. A year ago, with a credit ranking in the bottom eighth percentile, “I would’ve told her don’t even bother coming in,” said Helfman, who owns River Oaks Chrysler Dodge Jeep Ram, where sales rose about 20 percent this year. “But she had a good job, so I told her to bring a phone bill, a light bill, your last couple of paycheck stubs and bring me some down payment.”
Nevermind that a FICO < 500 means that not only will her job be gone in a few weeks, and that she will likely repay a single-digit percentage fraction of the total loan. What matters is she showed, well, signs of life - which makes her immediately eligible for all the loans that the government is fit to hand out. And frankly why not: with the US essentially insolvent, and now holding on to every day that the USD is still a reserve currency like dear life, who can blame her or the countless others like her, who have given the impression the economy is recovering when it is merely going through all the final strokes before it all, once again, comes crashing down?
Is it possible that barely five years later, everyone has forgotten what happened the last time anyone who wanted credit got it? And what will happen when those who don't even have a phone bill or a light bill, nevermind a job, come asking for a Dodge Dart? Why yes: the Pied Piper of Marriner Eccles is playing the music ever louder, and so all must dance.
Luckily, even the mainstream media is finally catching on to the fact that all the "gains" in the best economic sector have been on the back of subprime.
While surging light-vehicle sales have been one of the bright spots in the U.S. economy, it’s increasingly being fueled by borrowers with imperfect credit. Such car buyers account for more than 27 percent of loans for new vehicles, the highest proportion since Experian Automotive started tracking the data in 2007. That compares with 25 percent last year and 18 percent in 2009, as lenders pulled back during the recession.
Issuance of bonds linked to subprime auto loans soared to $17.2 billion this year, more than double the amount sold during the same period in 2010, according to Harris Trifon, a debt analyst at Deutsche Bank AG. The market for such debt, which peaked at about $20 billion in 2005, was dwarfed by the record $1.2 trillion in mortgage bonds sold that year.
Of course, the enablers of this destructive behavior see nothing wrong, and live under the delusion that sub-500 FICO borrowers will actually pay them back.
“It’s a good investment” for lenders, Helfman said. “A person that has to get from point A to point B, they’re not going to jeopardize their job. They have to pay the car payment before they pay anything else.”
His Dodge Dart customer with the bad credit had to pay a higher than average interest rate.
“It wasn’t pretty, but it wasn’t crazy,” he said. She was “so happy she couldn’t see straight.”
Of course she did: Greece too was happy when it found Germany - an idiot lender who fund the Greek drunken spending for a decade (mostly on made in Germany military equipment). And like the lender, Germany too was happy: it found a willing idiot to buy everything it had to sell funded by "vendor financing." Well all know how that relationship ended.
And end again it will, because subprime borrowers are the ones who can least afford the highest interest rates, which by definition flow through to the riskiest borrowers.
Fifty-eight percent of loans taken out to purchase Chrysler Group LLC’s Dodge brand vehicles in October were with loans above the industry average of 4.2 percent annual percentage rate, according to Edmunds, a researcher that tracks vehicle sales.
The average loan for a Dodge charged an APR of 7.4 percent, and 23 percent of the loans had APRs of more than 10 percent, making it the brand with the highest percentage of loans for more than 10 percent, followed closely by Chrysler and Mitsubishi. Rates on subprime auto loans can climb to 19 percent, according to S&P.
Dodge U.S. sales rose 17 percent this year through October compared with a year earlier, propelling Chrysler Group to 43 straight months of rising sales.
“Right now, you have to have fairly bad credit to be paying above 3 percent,” Jessica Caldwell, an analyst with Edmunds, said in a telephone interview.
But since nobody has blown up to date as a result of this latest micro credit bubble, it must mean everyone is welcome to dance. Sure enough:
An influx of new competitors into subprime auto-lending since 2010 is sparking concern of eroding underwriting standards, according to S&P. About 13 issuers have accessed the asset-backed market to fund subprime auto loan originations this year, according to Citigroup Inc.
Among the issuers accessing the asset-backed market this year are GM Financial, the lender founded in 1992 and known as AmeriCredit before it was acquired by General Motors Co. in 2010, and new entrants such as Blackstone Group LP’s Exeter Financial Corp.
“We are still skeptical that all of today’s subprime auto players will thrive,” Citigroup analysts led by Mary Kane said in an Oct. 10 report. The successful companies will be those that can underwrite and collect on loans while holding costs and defaults to a minimum, the Citigroup report said.
We are skeptical that Citi will thrive when the bubble pops, but that's irrelevant. For now, let the good LTV times roll. LTVs of a whopping 114.5%.
Consider Exeter Finance Corp., which was acquired by Blackstone Group LP in 2011. Moody’s Investors Service won’t grant high-investment-grade rankings to asset-backed deals sold by the Irving, Texas-based company, citing its limited experience and performance history.
It has had higher loss rates compared with other lenders, S&P said in a Sept. 17 report. Julie Weems, a spokeswoman for Exeter, declined to comment on the company’s losses.
Exeter has issued $900 million of the bonds this year, including $589 million of securities rated AAA by Toronto-based DBRS LTD and AA by S&P, data compiled by Bloomberg show.
In Exeter’s most recent deal in September, a $500 million issue backed by 26,591 loans, the average loan was 112.4 percent of the value of the car, up from 111.9 percent in a previous offering sold in May, according to a presale report from S&P. The average loan-to-value ratio, or LTV, on vehicle sales to consumers with spotty credit is 114.5 percent this year, compared with a peak of 121 percent in 2008.
It is so bad that even Morgan Stanley now gets it:
“Perhaps more than any other factor, easing credit has been the key to the U.S. auto recovery,” Adam Jonas, a New York-based analyst with Morgan Stanley, wrote in a note to investors last month. The rise of subprime lending back to record levels, the lengthening of loan terms and increasing credit losses are some of factors that lead Jonas to say there are “serious warning signs” for automaker’s ability to maintain pricing discipline.
And who gets to eat the losses? Well, as we showed yesterday, the bulk of consumer credit issuance in the past year, a massive 99%, has been sourced by the government to go straight into auto and student loans.
Which means you, dear US taxpayer, will once again be on the hook when the music ends.
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Thinking of an acronym with J in it.
and they're converting this trash into CDO's again? fuck me
I guess I'd better get my Tesla while I still can...
70% of Americans are subprime. Hard to have the consumer consume if they don't turn a blind eye to the shitstorm they created
at some point cars became so ridiculously priced by mandated crap that they had to become unaffordable to the masses that need them most
fucking 9 airbags, overly mandated pollution control that reduces gas mileage horrendously, 5 computers to run it all
useless sync crap so you can stream movies to your in dash icrap
its a wonder they can sell any at all, no matter who ends up paying for it in the long run
Besides all of that - they've taken the fun out of driving. And, the most dangerous thing that can happen to you on any given day is to be pulled over by a cop (with any probability - more probable than a piano falling on your head, for example)... the reason no longer matters.
Let's be sure we understand the theme of all this.
Good numbers are manufactured by lending money to the non creditworthy.
That looks rather a lot like the Fed buying Treasury bonds, yes?
But hey, the gun and badge thug can get that colonoscopy and enema thing knocked out for ya.
http://www.huffingtonpost.com/2013/11/05/david-eckert-enema-colonoscopy-...
I can see the point soon where they'll offer 128 mo loans on iPhones/pads. "She would never jeopardize the loan because stopping texting with the ex-congressman would ruin her book deal."
"Greece too was happy when it found Germany - an idiot lender who fund the Greek drunken spending for a decade (mostly on made in Germany military equipment"
What kind of financer finances someone to buy weapons from them? Under the rationale that one borrows because you believe you can earn a return exceeding the interest charged.
I guess the Greeks told the Germans they would use the military equipment to go after tax evaders! Gotcha!
"What kind of financer finances someone to buy weapons from them? "
That would be the US State Department and the country of Egypt.
Or Israel.
Good timing! I heard that they're having a fire sale on Teslas. Or something like that...
The deadbeats & FSA won't be denied their new ObamaMobiles. If you want to be rewarded in modern day Amerika, whether you're an individual or commercial enterprise, be as farking irresponsible & reckless as possible.
The government will have your back by bung-holing those dwindling few who are actual producers & payers.
Off Topic, but the end is finally here.
The idiot Sebelius just announced that insurance companies must cover ALL mental health issues and substance abuse just like physical health problems. This will consume 150% of GDP. Got your happy pills yet?
Get your gold and silver, and BACK THE TRUCK UP FOR YOUR MEDS.
But still no coverage for dental work, eh? How did that happen anyway? Are teeth not part of the human body?
The answer to your problem is just across the border in Mexico. Those dentist focused towns have private security and no drug lord messes around there.
Google dental tourism.
I know someone that does that. His Mexican dentist in Tiajuana is a 5-minute drive from the border, has nicer offices and all the latest equipment, and charges much less than his San Diego dentist. Almost all of his customers are Americans.
They're not considered "medically necessary". I'm not kidding, call 1-800-MED-ICAR and they have a script for that. Som I'm sure it's in ACA too but, you can probably buy a "platinum" plan that will get you there.
Leftist ideas so good they have to be mandated! Yay, pressure the banks/dealers with bad pub or strikes and they will loan money to your dead uncle.
CRA from the 1970's under Carter started housing bubble.
This one won't be so big but still significant.
And, everyone is getting 7 year car loans now...
http://www.usatoday.com/story/money/cars/2013/10/28/long-term-car-loans/...
"today the biggest growth is coming in loans lasting up to 84 months. That's longer than most people are expected to want to keep their new car."
Exactly, this is another key factor. It's all about the monthly payment number.
And despite these robust sales Domestic car lots are stuffed with product. So scary.
"Interesting" !!
LOL
Dodge is a damn fine car. Ran over my wife with a Dodge.
Guess she couldn't Dodge it... Nyuck nyuck nyuck...
Ram
Do you have it on film? With the trends in TV that sucker is worth some righteous change.
If not, ask her if she'll do a rerun for the team..., then duck and cover.
Wouldn't let you Ram her any more eh?
Well someone has to keep all the repomen shows on tv.
I believe my credit score is below 500. I'm not sure as I could care less about credit. However I just received a certified letter than I can buy any car from local dealer up to $40,000 !......no credit check, no money down ....unbelievable
I don't see anything wrong with this. Fuck FICO.
Sign me up !
My credit has been trash since 2008 and I don't care anymore
FICO is a scam anyway, and the banks are not issuing "money".
They're not even issuing "currency", unless they give you a wad of $100 FRNs. They are issuing "CREDIT". Out of thin air. With a few keystrokes and a flick of a pen.
You got that car with "legal confetti". Car dealers will get everything they deserve. But, not to worry, they got the risk, P+I and Profits all packaged into the monthly payments. If you default they get the car back and make an additional margin when they sell it to some other dope.
ANYTHING to keep the Fed's Ponzi fiat going!
Dealers are just.... the dealers. They have no risk, they just get a sales commission. It's the makers who are going to be hurting soon.....
For the most part they get bailed out anyways. Ford is the only real auto maker that didn't get bailed out. Not counting the Japanese makers, as far as I know they are not doing this stupid stuff.
My money is on Ford being the only surviving American auto company soon. GM and Chrysler have not managed to get past their reliability issues on anything they have released in the past 10 years, and their quality has been flat-lined for at 15 years, Ford has been the only company that has been improving to catch up with the Japanese manufacturers.
Ford got bailed out. They took out billions from the Treasury's advanced vehicle program. Supposedly to built an electric Focus.
You thought Tesla took government money and wasted it, you should check out Ford.
Which is actually not true. Ford backed out of the deal after seeing the contractual obligations, hence no electric Focus. That is when Ford started looking for new leadership to fix the mess they were in, and they did a great job of it. They never actually took receivership of that money.
Now if only you morons would learn to do some fact checking before spouting nonsense. I may not like corporations, but Ford at least had the decency to not take stolen money, so they have more respect from me than say Honda, Toyota, GM, and whomever else is heavily subsidized by their respective governments.
Are you kidding? All Japanese corporations have been partners of the government since WW2 if not earlier.
They don't make a move politically without considering "Japan Incorporated". Why do you think the economy has been on life support since the late 80s? What do you think the latest campaign to reduce the value of the Yen is about? Why do you think they are letting Tepco get away with murder?
Let's see here:
Dodge is part of the Chrysler LLC Group, which is
Owned by the Fiat Group SPcA, which is
Domiciled in Italy, which is
A member of the EU, and shares in
A common European currency, the Euro, which has
Undisclosed and likely an infinite swap-line available with the FED, who can
Kajigger some electrons and make more money on out of thin air.
Hmmm... Where's the problem?
FICO-Schmico - anyone who wants a car can get a car. The chairman will get you one on the way to work.
So you get credit, finance, by promising to pay with fiat promissory notes?
Ohhhhkkaaaaay.
I'm going to be bluntly honest here. I would not buy a car from any of those Jackals unless it were something I would not mind ripping the engine out of and cutting the rest of it up. Then transplanting the engine into an old Pre-Emission shell and telling them the vehicle they are looking for was stolen.
Just saying that I would not expect anyone to treat a dealership with honestly or respect with the amount of BS they pull. I have been into Classic muscle and off-road trucks almost since I was 15, and I have seen a lot of shady things done by used car lots and certified dealerships to rip people off. Not condoning dead beat behavior, but condoning behavior that includes you being aware of what exactly you are buying, and knowing that if they try to screw you, you can still say fuck you to them.
I do not support predatory loans, and even though people should know better, it's hard when the state itself in it's educational facilities encourages risky behavior like that.
I can't educate everyone all the time. There is only one of me, and one of each of the other Austrians.
There are numerous infomercials that run late night offering $88 down and only $88 a month no credit checks gets you a car. yeh it's that bad.
Grand Prairie Ford here outside Dallas has run that deal on a billboard for a freaking Mustang. Sheesh.
I've got that story beat! Here's one from around 2007, one of my wife's realatives.
Six months after the latest bankruptcy, on disability, 59 years old, married to young wife with no job, they walk into a dealer with no money. Dealer somehow uses the rebate as the down payment and off they go. six months later the wife disappears with the car which is now two months behind in payments. He receives calls from finance company, but his lawyer says to ignore the calls. He still gets a call every few months from someone looking for his ex wife and the car!
Look on the bright side - plenty of jobs for repo men down the line.
When nobody cares about principal anymore, it's all about the transaction fees - if it works for the FED why shouldn't it work for the car dealerships? Thanks Ben, this is going well.
I'm bored with this shit. Can we hurry up and crash already? I mean really . . what's it going to take?
Re: what's it going to take?
Something tiny to panic a full prostate gland. Not much else.
Gunfire at elites.
Period.
Altucher 20,000
Well, here in Sacramento they are offering loans on the value of your car, all ya need is the title.
Great! Now I get to watch a bunch of inbred retards in bumfucked Egypt get filmed REPOing cars on the History Channel, for the next decade...
"Operación Repo"
magnífica comentario! Bueno~
How do you get a new car loan with a LTV > 100%? You walk away with a new car and cash in your pocket???
Negative equity on the trade in. They finance the car you just bought + the remainder of what you owed (above trade in value) on what you traded in. The whole concept is based on people who want a shiny new ride and aren't very good at math. The rates these folks pay are well above market and the terms are usually longer than what a car loan should be, but all they care about is "what's my monthly".
It's actually true that car payments will land high on the priority list for people prioritizing cash flows. It's also easy to repo the collateral when the loan stops performing and sell it in the used market, which is strong (probably refi it to someone else at a higher rate at a buy here/pay here shop). And unlike housing, car buyers aren't looking to flip for a profit and lenders know the value of collateral isn't going to appreciate. The whole game is in the usurious interest rates. These are VERY profitable lines for lenders. I'm always amazed at how much money can be made off poor people.
Agent,
"I'm always amazed at how much money can be made off poor people."
They are kill'n it on volume, scraping off 3-4 hundred $$$, from Hundreds of million people = Billions $ Billions $ Billions
Obama said GO BUY CARS NOW.
"but Obama we can't we are broke and have no credit"
Obama: I DECREE IT IS NOW ILLEGAL NOT TO BUY A CAR, and IT IS NOW ILLEGAL NOT TO SELL A CAR TO SOMEONOE WHO WANTS TO BUY ONE SO SHALL IT BE !!!!!!
Well what the hell why not? After all, it's illegal to decide for yourself who you want to rent your property to.
ObamaCar
Are these loans going through the Wall-Street slice and dice and coming out as investment grade securities? If so, then pity the fucking pension fund managers who once again chase yield by buying dubious car loan backed securities. This entire nation truly is fucking insane. The belief that more credit, bigger amounts of credit can restart an economy that lacks a productive sectore. America is all government and education and health care. I maintain that these three, no matter how much GDP they add, in the end are not net productive. I mean they produce no surplus wealth coming from value added. I swear to fucking God, if Bernanke stops printing 85 billion a month, this nation goes down the shitter at light speed. Looking for a tapper? No fucking chance. This car loan story prove the desperate state of depression America.
"This entire nation truly is fucking insane."
Yes, this nation is literally and obviously insane.
In this economy, if you take away the crazy shit there is nothing left.
At least with leases they take a huge deposit up front. I'm sure most of that gets tucked away to pay the (inevitable) repo truck guy with the slidy under-carrage forks.
That's because this isn't an economy. It's the facade of an economy.
Our monetary rulers don't understand production because they aren't productive themselves. They are money changers and all they ever produce is debt and ruin.
Then again people also have themselves to blame, since they happily participate in every ponzi or swindle scheme that the money changers conjure up next.
Cash for Clunkers anyone? Ha. The swindles can't work if people don't participate in them, but they do.
Why do you think Bernanke is retiring and dumping the whole bag of shit in Old Yellen's lap?
Just bought a new Ram 1500. Zero down and 2.71% for 72 through SunTrust. $7,000 in rebates. They are giving these things away.
Fate the Magnificent
"Push the Button, Max"
A fucking 6 year car loan. I mean, come on. You have to laugh. 6 years.
Couldn't qualify for that zero down, zero interest for 36 months, free scheduled service deal? </sarc>
Why would you want to own a new Dodge for 6 years?
"Why would you want to own a new Dodge for 6 years?"
Owning for six years isn't a problem...financing for six years is another story. Last Dodge I owned lasted 12 years and 260,000 miles (and then I sold it). My current car is 10 years old and has 225,000 with ZERO repairs, and I foresee having it for at least another two years (Honda...fucking amazing). Each had debt against it for less than three years. I HATE car payments, and I love getting the most out of what I buy...but then again, I don't consider myself to be the average American consumer.
He financed the truck for (6) years. At first I thought he might be a farmer, but the depreciation schedule killed that idea.
Good on ya for keeping your cars in good shape, and thinking smart when it comes to financing. This ponzi ZIRP world is a joke!
Assuming he had a decent down payment, where's he going to put it? BTFATH equity markets? Bonds? I probably would have gone for some sort of zero interest $3-4k driveoff with 36-48 months of financing.
Dodge =/= Honda. Dodge now a days are absolute piles of turds. The only good part of them trucks are the engines and that is only the Cummins Diesel, and it's not even made by Dodge.The rest of the truck is junk.
"Why would you want to own a new Dodge for 6 years?"
I periodically do some car projects / car shows as a hobby and needed a tow vehicle. This looked like a great little truck for the price and came with a tow package, fancy shmancy wheels and RamBox option...and was very, very cheap. $23,200 after nearly $7,000 in rebates. As far as the financing, at 2.71% for 72, I think I'd rather have $20,000 in Morgan dollars than $20,000 cash in a truck.
Fate the Magnificent
"Push the Button, Max"
Nice, Tyler. Let's focus (with Coke-bottle glasses) on the "molecular" and not the Macro of so many LBOs, Derivative purchases, CDS and the plethora of of other "guaranteed" profit tools based on "bad loans" in the fucking billions and trillions. You start with an eye-catching, racist story about a working poor woman who needs a fucking car to "commute"....as in WORK! You imply, by uins multiple key words and examples that she is a lazy, black, of course, leech on the backs of the good, white financially aware (like yourself). Why don't you change your blog name to "White Man's Blog" Because On a Number line the White Way is the Right way"?!? This place in turning into a high-priced "Before Its News" site.....
If you've got terrible credit, it is in your own best interest to not finance the purchase of a new car. If she needed a car for work, buy used. The bottom line is this doesn't help anyone. Risk is ignored to such an extreme level people are being financed for purchases they shouldn't be making. The whole point of credit scores is to avoid this. So credit scores are obviously a big sham.
Oh noes, can't be seen in a used car....that would hurt people's self-esteem...the very people who need self esteem the most in this country due to blah blah poverty blah discrimination. Nawm sayin'?
Yup. I paid $2k for my vehicle, and considering some of the places that I take it, the bad paint job was a plus. My shit runs, goes places that would make you want to get out of the vehicle when I pointed and said "we're going up THAT," and it's paid for.
Let us also never forget the permanent victim indignity of being sold into slavery as well.
If you buy a used car you have to have CASH or pay a much higher interest rate. Also be ready to be hit by unplanned repair bills you have to pay in CASH you don't have. Lots of payday loan 300% loan treadmills got started because someone had a car breakdown, no money left, and HAD to get to work at their shitty min wage job, part time, of which they need 2 or 3 just to make ends meet (more commuting).
The logical answer is a cheap $88 a month NEW car. Low interest rate, no repairs required, warranty included.
In today's economy it makes perfect sense for a broke person with 3 part time jobs to buy a new car for nothing down and $88 a month.
Biting Truth
Please enlighten me.... I didn't recall anything about the piece that inferred in anyway this woman was black. So, based on your post I figured I must have missed it and reread the piece. Still didn't see it..... what am I missing?
So all those Escalades I see in the Baltimore area....those are for work?
Do they require spinner rims to get to the office?
And talk about not-at-all fuel efficient....Clearly a winning investment when for many I'm sure it comes down to a choice between gas and healthy food for their children. Of course Uncle Taxpayer steps in for that (and perhaps for the light and phone bills too).
keraaazee
Not playing with a full deck are you? Well, OK you do seem to have a full deck of race cards handy. How do you know the woman was black? What? White honky crackers can't have low FICO and the need to commute? You could be the face of the New Racism, a Neo-racist.
Just an FYI, people are getting tired of it and it starting to show.
Very true. The bait for hate has become worse so as to make most ZH material unreadable.
When logic and memory fail, use your imagination to guess things about people.
I imagined that she was a cross dressing oriental man/woman with two identities. The one she bought the car with is his default (literally and figuativly) identity.
In reality she is a hooker who does quite well outside the fiat economy. he will default on the loan with no consequence. She will continue to defiantly blow-off the world to inconspicuous wealth.
Inventory must be moved!
It doesn't matter if they can't pay, it's a tax write-off and provides jobs for the salesman, the receptionist, the finance team, and Repo Men!
Besides, if the SHTF all over again Chrysler and GM will get bailed out again-again and we can go back to square one!
Ninja's strike in the night, in the dark, when you least expect them, with deadly tools of razor sharp debt and Ponzi throwing stars!
Well somehow they have to prop up Chrysler. /s
I know what he meant when he promised, "An Obama Volt for every garage."
"Issuance of bonds linked to subprime auto loans soared to $17.2 billion this year..."
Peanuts. There's $85B in Federal Reserve QE hitting the system every month. That'll paper over a shit ton of sub-prime Dodge Dart loan defaults. Meanwhile the processing fees for issuing these "loans" have been pocketed by the financial institutions.
Our "financial system" no longer even pretends to earn its profits by accurately assessing risk and steering capital to sound investments. They just skim the fees and push that shit on down the line.
Politicians own car dealerships you know... same skills.
When FLOW is all they care about, it is best to keep on flushing.....
I hear the radio add all the time about these. "Yesterday so n so from Raleigh drove off in a new "GM" with only a credit score of 539 and $189 a month for 160 months!" This is nothing new I'm afraid. This shit will not end well. Prepare accordingly!
Haha you hear those too? If ya pass an old corolla it might be me.
Free and clear and 38 mpg.
pods
If you see an older Ford F250 HD pulling someone out of the ditch after their night of "irrational exuberance". It's likely me. I get 10 MPG and don't care because it's a Big Block under my hood. I also own it outright.
For the record: theres 2500 less GM dealers since 08!
are sales still up?
You need to lay off the choom!
http://imageshack.com/scaled/large/35/mndw.png
Look at number of units sold. You also have to factor in inflation.
Why should a car dealer care about credit scores when it is so easy to equip the car with a secret GPS tracking device that makes repossession a breeze? How long will it be until all new cars come with a remote deactivation feature that enables the dealer to disable the car if you miss a payment?
And in a few years, cars will probably be capable of driving themselves back to the dealer if you miss a payment.
Depends, can the dealer hide those boxes well enough so no one can find it? Not likely. I've seen one such vehicle equipped, and I charged the person $50 to rip it out and make sure there was nothing wrong with the harness afterwards. The more drastic things get the more likely it is that people are going to start having to learn how a lot of these things around them actually work, or just be out of luck and hopeless.
I'm of the position that if you are making your payments, your rates shouldn't be able to rise.
did I mention 84 month auto loans and 40 year! mortgage loans?!
Why not enjoy these last days and go out with a bang instead of a whimper. Those in dept will probably have the last laugh.
A young man where I work just got a brand new Chevy Silverado. He makes about $26k a year.
Does that piss you off? It should. You're going to help pay for it and no, you won't get a free ride.
You can get those for less than $20K, so I don't see the issue.
"Nevermind that a FICO < 500 means that not only will her job be gone in a few weeks".
No.
FICO scores do not check job, income, race, sex, age or where you live.
If her FICO is <500, her employment history probably sucks. She buys things and can't pay for them.
Her score doesn't check her employment, but it's a good indicator of it and her poor decisions. One of which is purchasing a new Dodge that she can't afford and probably doesn't really need. She could buy a decent used vehicle for under $10k but she won't, and that's another reason why her credit sucks.
I wouldn't loan her a dime, but Uncles Barry and Benny still think she is credit worthy. So much for sound judgement.
FICO is a BS marker if anything. One mistake is all it takes for a person to have a bad FICO for the rest of their life, esepecially if that mistake is a student loan. People should not be measured by the ratings the banks give them, but by them displaying their potential. What youa re saying is essentialy that humans should be perfect and never make a mistake. That is a fallacy.
The whole FICO system is essentially immoral and based on the lies of the Fiat money system being something that is credit worthy and without risk itself.
In the early 80's you could get a loan from a bank based on your credit relationaship with the bank - the bank loan officer had discretion. However, certain people in Washington noticed that banks were lending to whites and not to minorities. So they passed laws. Credit Scores and FICO scores were any easy way to do and end run round these laws. The key thing about turning someone down based on a FICO score is that you can't be sued for discrimination since the factors going into the FICO score are specifically chosen to avoid charges of discrimination.
The idea that lending should be fair is nothing more than Marxist BS. Lending should be at the pure discretion of the lender. There should be no intermediaries, and certainly no government involvement.
Personally I'll NEVER buy a new car. That's the equivalent of buying Faceplant or Twerker on it's IPO day. I'm quite content with a low mile car still under (full) factory warranty with 10-15k miles on it.
You don't want the hassle of a new car anyway. Failure rates for products are "bathtub" shaped.
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http://en.wikipedia.org/wiki/Bathtub_curve
When it comes off the assembly line there are a bunch of niggling problems that need to be fixed, mostly nothing major but annoying and repaired under warranty, sometimes it is fairly major. Then for the main part of the life of the product the failure rate drops down to a low level and it should just work. You only start seeing failures again towards the end of life of the product where things are starting to wear out.
And this applies from everything from cars to houses to phones. It's a feature of probabilities, products have so many parts in them that even if you use "6 sigma" quality methods you are almost guaranteed to have defects in virtually every final product sold.
So particularly with cars you want someone else to deal with all the early failures and the massive depreciation from the original purchase price, then use the product during the low failure probability period, then you pass it on to someone else when the wear failures are starting to happen.
Cars are not about enabling you, they are a way of enslaving you with debt and a chance for the tax collectors in blue to stick their faces into your life.
I own one, old and carefully stored, but I've not driven for about 3 years now. Ah, the freedom of NOT driving a car.
You think that's bad. I hear Tishman Speyer is qualifying for RE loans.
Once Yellen gets in...she looks the type to buy the liar's loans directly from Chase Morgan so they don't have to go through the old round about of screwing half the world municipalities. I know one day I'll be able to buy my house with student loans so I'm holding off till then. Up my FASFA. Yellen Mother Fuckka. Q99X2/got my second disbursement today.
Survive the cycle of the ethicless.
The answer: the same NINJA loans, with non-existent zero credit rating requirements that allowed anything with a pulse to buy a McMansion during the peak day of the last credit bubble.
What matters is she showed, well, signs of life - which makes her immediately eligible for all the loans that the government is fit to hand out
When you try to explain this absurdity to the average punter they have absolutely no idea,why bother.
Debt Slave: "If her FICO is <500, her employment history probably sucks. She buys things and can't pay for them.
Her score doesn't check her employment, but it's a good indicator of it and her poor decisions. One of which is purchasing a new Dodge that she can't afford and probably doesn't really need. She could buy a decent used vehicle for under $10k but she won't, and that's another reason why her credit sucks.
I wouldn't loan her a dime, but Uncles Barry and Benny still think she is credit worthy. So much for sound judgement."
Not happenin' Almost impossible to finance a used car with shitty credit. That's the whole point of the article.
"I wouldn't loan her a dime, but Uncles Barry and Benny still think she is credit worthy."
They do not give a shit about being credit worthy. Seventy percent of the economy is based on consumption. They NEED people by to buy buy buy regardless of paying it off. The purchase is what counts in accouting when you have maxed out channel stuffing.
Growth job opportunities: Car Repossession.
Logic goes like this:
Salesman: "Buy the car. I make money"
Customer: "Buy the car, I drive it until it's repoed"
Dealer: "Buy the car, I'm insured"
Insurance Co: "Buy the car, reinsure with AIG"
AIG: "Buy the car, Uncle Sam covers the loss"
Uncle Sam: "Buy the car, consume, consume, I can borrow from the FED"
FED: "Buy the car, I can print to cover it"
Just who in this virtuous cycle is going object to the purchase of the car? This is exactly what happened in 2004-2007, but now the asset values are lower but the base is larger. The same scenario will be played out when the sub 500 Fico-Pscho "Customer" above heads over to her new college and enrolls for the Spring session.
And they Always Order the Shinny Wheels...
I think I heard that woman in a radio commercial, buying her 4th car in 10 years, rolling over each new car with more debt and getting a newer higher priced less durable car each time.
They have to keep the petrol/gasoline pumps going, so having more cars on the road is necessary. The oil barons know the U.S. government (i.e. the tax payers) will continue to fund failing car manufacturers and wouldn't have it any other way.
It is too bad you need a driver's license to buy a car on subprime. Otherwise, my black cat should be able to sign a NINJA contract with a pawprint (in purple ink), just like she bought houses during that bubble.
More "financial innovation". If the us was a steak it would be sub-prime.
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Motorcycle lending is getting out of control too. For example, Harley is increasing it's subprime lending and is majorly in the asset-backed security market (see some discussion of that here). They're also totally cool with giving you a loan while you're messed up on Xanax.
Car dealer - "We lose money on every deal but make it up in volume."