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Thread: GM Ramps Up Risky Subprime Auto Loans

  1. #51
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    Re: GM Ramps Up Risky Subprime Auto Loans

    Quote Originally Posted by Superfly View Post
    My daughter is just that way. She wants everything all at once. I can't make her understand that it takes years and years to build up some of the things we've got.
    and typically, as we near retirement, we seek ways to simplify our lives, by getting rid of some of it....
    either that or we get featured on TV as a hoarder...
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  2. #52
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    Re: GM Ramps Up Risky Subprime Auto Loans

    I know for a fact that if you carry a balance, it will look worse on your scores than if you do not. I've seen my credit score jump 75 points just by paying off the balances.

    When we got our mortgage, we'd made sure that we didn't have a balance on any of our cards. They were zeroed out. The lender told us to charge about 10% on the cards because the underwriters wanted to see some kind of activity on the card. We did it, begrudgingly. I hate carrying a balance. Lenders like to see activity on the card, but it always looks better to pay it off every month. So we charged the cards for a few things that we would need for the new house, and then paid them off after we got the mortgage. We couldn't even pay them off until the mortgage was finalized.

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    Re: GM Ramps Up Risky Subprime Auto Loans

    Quote Originally Posted by UtahBill View Post
    and typically, as we near retirement, we seek ways to simplify our lives, by getting rid of some of it....
    either that or we get featured on TV as a hoarder...
    **guilty pleasure**

    I love that show. But yeah, I used to give my daughter all kinds of stuff that I had too much of. I was always giving her unitaskers (as Alton Brown calls them) that I thought I absolutely had to have, that I never used. I still have enough unitaskers that I have a shelf in my garage filled with them.

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    Re: GM Ramps Up Risky Subprime Auto Loans

    Quote Originally Posted by AdamT View Post
    There is nothing inherently wrong with subprime loans. Someone may be a higher risk and therefore you charge them a higher rate. This isn't like the realestate market where the value of new cars is suddenly going to fall through the floor.
    Not exactly correct. Doesn't the value of a new car suddenly fall through the floor the minute you drive it off the lot?

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    Re: GM Ramps Up Risky Subprime Auto Loans

    Quote Originally Posted by Superfly View Post
    **guilty pleasure**

    I love that show. But yeah, I used to give my daughter all kinds of stuff that I had too much of. I was always giving her unitaskers (as Alton Brown calls them) that I thought I absolutely had to have, that I never used. I still have enough unitaskers that I have a shelf in my garage filled with them.
    My cousin calls these things "lettuce spinners," in homage to my buying one a number of years ago, using it twice and giving it to Good Will.

    Now, I just put my lettuce in a clean pillow case and spin it in the dryer.
    The devil whispered in my ear, "You cannot withstand the storm." I whispered back, "I am ​the storm."

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    Re: GM Ramps Up Risky Subprime Auto Loans

    Quote Originally Posted by MaggieD View Post
    My cousin calls these things "lettuce spinners," in homage to my buying one a number of years ago, using it twice and giving it to Good Will.

    Now, I just put my lettuce in a clean pillow case and spin it in the dryer.
    Lettuce spinners LOL. Tell your cousin not to hate. I've always wanted a lettuce spinner.

  7. #57
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    Re: GM Ramps Up Risky Subprime Auto Loans

    Quote Originally Posted by jimbo View Post
    Not exactly correct. Doesn't the value of a new car suddenly fall through the floor the minute you drive it off the lot?
    Yes, it does (which is why you will probably have to make a substantial downpayment), but the value of the used car *market* doesn't have the volatility of the real estate market.
    "The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. ... It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion."

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    Re: GM Ramps Up Risky Subprime Auto Loans

    Quote Originally Posted by Born Free View Post
    Did we not just go through this with the housing bubble, now GM is taking a failed approach to raise sales. Here we go again with another GM failure, but please let them fail. No more bailout, bankruptcy, broke, out of business. Period.


    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.

    GM Ramps Up Risky Subprime Auto Loans To Drive Sales; Taxpayers Still Own 26.5% - Investors.com
    Fun. When this breaks, we'll get to bail them out again.
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    Re: GM Ramps Up Risky Subprime Auto Loans

    Quote Originally Posted by MaggieD View Post
    No, actually you don't have to carry over to build credit. There is nothing more reflective of good use of credit than paying off the balance every month.
    Not Necessarily. Personal Story....

    In February of 2001 my maternal grandfather passed away in Minnesota. My mother had been visiting for the two weeks before he passed. Once all the plane tickets, hotels, etc.... were added up, it became clear that my parents would be very close to the limit on their one and only credit card. They called the credit card company to ask for a temporary credit increase and were turned down. When they go the letter, it said "Insufficient Activity on Card" as the reason for denial. They used it regularly, but always paid it off at the end of the month. A friend of theirs in the financial industry told them that quite a few credit card companies consider a card "Inactive" in any month that they do not charge INTEREST to that account.

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    Re: GM Ramps Up Risky Subprime Auto Loans

    Quote Originally Posted by Tigger View Post
    Not Necessarily. Personal Story....

    In February of 2001 my maternal grandfather passed away in Minnesota. My mother had been visiting for the two weeks before he passed. Once all the plane tickets, hotels, etc.... were added up, it became clear that my parents would be very close to the limit on their one and only credit card. They called the credit card company to ask for a temporary credit increase and were turned down. When they go the letter, it said "Insufficient Activity on Card" as the reason for denial. They used it regularly, but always paid it off at the end of the month. A friend of theirs in the financial industry told them that quite a few credit card companies consider a card "Inactive" in any month that they do not charge INTEREST to that account.
    For sure they had the wrong card company.
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