With auto lending easier to come by these days, bank regulators and analysts are keeping their eyes open for potential signs of trouble.
According to The Detroit Bureau, the Federal Reserve Bank of Cleveland found that newly originated auto loans in Q3 2014 reached $105 billion, the highest level of originations since 2005. The high level of originations are attributed to an increased demand for vehicles and easing lending standards.
Researchers Emre Ergungor and Caitlin Treanor add that those with good and bad credit scores are landing the loans, with banks taking the higher-rated consumers and finance companies going for all levels of risk, especially the subprime consumers.
Other factors driving the new credit boom include increased consumer confidence, job opportunities, and the brief respite in fuel prices. However, the boom has attracted the federal regulators, who are planning to go through the standards and practices of several large lending companies for potential liability and discrimination issues.
Subprime lending…
On the one-hand, there are some people who desperately need a car – even if the loan rates are horrible.
These crappy car loans are no worse than the number of student loans that are going to end up paying interest-only for the rest of their natural lives.
Till Bankruptcy Do Us Part: An American Love Story
It has become the American way of life, when in pursuit of the American Dream.
Had subprime lending been available to me when I was young and poor, I still would not have been able to pay off the loan because there never was enough money to take on any loan.
If we didn’t have the money, we did without.
I’m not a lawyer. But, from what I have seen…
You can file bk 7 and reaffirm the debt which means you can keep the property pledged as collateral, ie the car or home but you also agree to continue making the payments. If you choose to bk the car, in this case the car is returned to the lender, aka repo. Lender sells at auction.
Bk13, the bk trustee effectively renegotiated your debt to pay back principal and perhaps some interest. You need court permission to obtain any new debt while in bk13.
Bk affects unsecured creditors, collections, medical bills etc with exception to student loans, they are technically unsecured, as you can’t repo someiones brain, in my case the auction price would be too low to make the ordeal pencil, but the lobbyists for the student loan firms did a nice job of protecting their interests when they were able to get this legislation passed.
Jake: [fakes accent] How much for the little girl? How much for the women?
Father: What?
Jake: Your women. I want to buy your women. The little girl, your daughters… sell them to me. Sell me your children!
In some countries a “subprime loan” is a homely 14-year-old.
Jacque: Combien de dollars Canadienne pour le Peugeot, monsieur?
Personne de salle voiture: Oh! $46,000! C’etait un model luxe, pour le testeurs automobiles de journalisme!
Jacque: Sacre bleu!
Jacqueline: Non, c’est impossible! C’etait un model pour Tim Cain!
LOL keep the stock photos coming, they are pure comedy in and of themselves.
SALESMAN: Hi, I’m Rick. So how can I help you folks today?
WOMAN: I have some questions and concerns…
MAN [WITH EYES LOCKED]: Rick, I am… mesmerized… by you.
Woman (furtively gesturing with index finger while talking): “Like, he thinks I need 4 wheel drive because the Polar Vortices are only going to get, like, really bad, and I can’t miss Yoga class or Snubs, like ever…”
Salesman: “He’s right, you know. Our proprietary NADA weather report forecasts that each successive winter will be both colder & snowier than this year’s.”
Boyfriend: “Her FICO Score is 520, though, and she had her heart set on that Range Rover Sport in Victoria Beckham trim, which is $78,000.”
Salesman: “Look, that won’t be an issue. Let’s get you to Mr. Ruggles office – he has some great 96 month financing plans for people such as yourself, and can handle all your needs, from our in-house lender’s financing to tru-coat & dealer installed add-ons.”
Lol, you’ve got to get dat Tru-Coat, dontcha know?
You betcha
HOMER: Extended warranty? How can I lose?
“Baby, hold my hand for a minute.”
To salesman “I don’t think you understand how serious the situation is for us, Mr. Salesperson. We really NEED to buy this new BMW convertible, and after I settle with my ex-husband, we’ll have enough to finance over 120-months.”
These caption contests are fast becoming one of my favourite parts of the site.
Pull my finger.
COTD!
Him to wife: “babe, I got this, watch me work this sales man”
Him to salesman: “we will take your deal with the midwest market adjustment, but only if you lower the price of the window etching to $499. These new Darts are hot, but I don’t want to Pay too much for anti theft protection”
Salesman: “DAMNIT! Let me go talk to my manager”