Skip to comments.Vital Signs Chart: More Auto Loans Going to Subprime Borrowers
Posted on 09/10/2012 7:57:39 AM PDT by KeyLargo
September 10, 2012, 9:13 AM
Vital Signs Chart: More Auto Loans Going to Subprime Borrowers
By Ben Casselman
More car loans are going to risky borrowers. Nearly 12% of new auto loans went to subprime borrowers those with credit scores below 620 in the second quarter, the most since the market for risky loans dried up in 2008. Somewhat safer outside of prime loans those to borrowers with scores below 680 rose to 25.4% in the second quarter, up from under 17% in 2009.
(Excerpt) Read more at blogs.wsj.com ...
GM Ramps Up Risky Subprime Auto Loans To Drive Sales
By DAVID HOGBERG, INVESTOR'S BUSINESS DAILY Posted 07/27/2012 06:07 PM ET
President Obama has touted General Motors (GM) as a successful example of his administration's policies. Yet GM's recovery is built, at least in part, on the increasing use of subprime loans.
The Obama administration in 2009 bailed out GM to the tune of $50 billion as it went into a managed bankruptcy.
Near the end of 2010, GM acquired a new captive lending arm, subprime specialist AmeriCredit. Renamed GM Financial, it has played a significant role in GM's growth .
The automaker is relying increasingly on subprime loans, 10-Q financial reports shows.
Potential borrowers of car loans are rated on FICO scores that range from 300 to 850. Anything under 660 is generally deemed subprime...
How many of these subprime borrowers are buying the Chevy Volt? There’s an automotive industry double tap.
The question is, are the loans recourse or non recourse? Back in the late 80’s I worked for a company that financed new cars on a full recourse basis. That meant that anyone with a pulse rate was approved, but when they defaulted, the car would be immediately repossessed, taken back to the dealer, and demand for payment in full would be issued by we the lending agents.
Eventually, many a dealership was forced to close, as the same subprime borrowers were the ones that would beat the crap out of the cars causing resale by the dealer at fifty cents on the dollar. History has a way of repeating itself. I’d be careful investing with Ally Financial.
September 10, 2012 4:00 A.M.
The Democrats GM Fiction
By The Editors
The Democrats have decided to run in 2012 as the bailout party. It is an odd choice the 200809 bailouts were deeply unpopular among the general public, and even their backers were notably conflicted about the precedent being set and the ensuing moral hazard. But Democrats have nonetheless made one of the most abusive episodes in the entire bailout era their economic cornerstone: the government takeover of General Motors.
Insight: GM’s Volt: The ugly math of low sales, high costs
By Bernie Woodall and Paul Lienert and Ben Klayman
Mon Sep 10, 2012 9:47am EDT
(Reuters) - General Motors Co sold a record number of Chevrolet Volt sedans in August but that probably isn’t a good thing for the automaker’s bottom line.
Nearly two years after the introduction of the path-breaking plug-in hybrid, GM is still losing as much as $49,000 on each Volt it builds, according to estimates provided to Reuters by industry analysts and manufacturing experts.
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