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GM Ramps Up Risky Subprime Auto Loans

Superfly said:
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.
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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...:2razz:
 
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.
 
UtahBill said:
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...:2razz:
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**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.
 
AdamT said:
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.
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Not exactly correct. Doesn't the value of a new car suddenly fall through the floor the minute you drive it off the lot?
 
Superfly said:
**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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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. :rofl
 
MaggieD said:
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. :rofl
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Lettuce spinners LOL. Tell your cousin not to hate. I've always wanted a lettuce spinner.
 
jimbo said:
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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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.
 
Born Free said:
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
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Fun. When this breaks, we'll get to bail them out again.
 
MaggieD said:
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.
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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.
 
Tigger said:
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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For sure they had the wrong card company.
 
Worst thing I ever did for my credit rating was pay off my car two years early. Withou debt, one has no credit. In order to achieve a better credit score, I was advised to ramp up a credit card, and make on tine interest payments. Up till then, I had always paid the total ballance up front. Guess what? It worked, and I was able to buy my house shortly after. True story.
 
KevinKohler said:
Worst thing I ever did for my credit rating was pay off my car two years early. Withou debt, one has no credit. In order to achieve a better credit score, I was advised to ramp up a credit card, and make on tine interest payments. Up till then, I had always paid the total ballance up front. Guess what? It worked, and I was able to buy my house shortly after. True story.
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If you have 20% down payment when buying a house, they don't care what your credit score is....they HOPE you default....
 
DVSentinel said:
Frankly, except for the need for a warranty, I would stay completely away from newer cars. It may cost a bit, and some won't agree that it is worth that cost, but I prefer transferring a lot of modern technology onto older vehicles. Sure, it's going to cost me a little over $4k to put a decent sequential fuel injection system onto my current project, a '71 Chevelle (I would go for direct injection, but haven't found anyone that produces the system and heads aftermarket for a 454), but I will have complete control of the system (once I learn the software) and I won't need all those special tools and testing equipment to use and troubleshoot it. If I wanted a 'vette, I would go for a late 70s early 80s (80-82) model, they look cooler and for less than half the cost of a Z06, I can add the drivability and end up with one that is faster, better handling, more fuel efficient and would kick the ass of any new one or a GTR. Because I don't have to deal with EPA restrictions, other than cats on post '76 models before the introduction of OBD-I, I can do a lot more with it than anyone ever legally could with the new ones.
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I've done/am doing that to my 76'. New suspension, fully adjustable, made from fiberglass. New tko600, wider wheels, running 295s in the back, and 265s in the front, kumho exta tires, rack and pinion steering, aluminum calipers with hawk pads, and a vortec top end rebuild on the 350, making, maybe...350hp? Either way, though, I can tell you...if I wanted to close in on NEW z06 performance, I'd need a new frame, and lose a LOT of weight. It'd cost me more, I think, to build a street legal car, out of a C3, that could hang with the likes of a new Z06, or a GTR. It's a daunting task. I figure my car can ALMOST hang with a base C5, needing more power to run with the C5 Z. And the difference between the C5 and C6 Z is astronomical. Plus, those new vettes have a heads up display on the windshield that is cool as he'll!
 
UtahBill said:
If you have 20% down payment when buying a house, they don't care what your credit score is....they HOPE you default....
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That's true. There were a couple of lenders who were offering subprime mortgages with credit scores below 640, but you had to have a down payment. IIRC, it was something like 580 to 600 you had to have 10%, 600 to 620 you had to have 5% and 620 to 639 you had to have 3%. Wells Fargo was one - I don't remember who the other was.
 
20% of the average home price is a lot of cash.
 
I never had a problem with mortgages, but then I have VA. They won't let me go non-VA. With VA though, they are all tripping all over themselves trying to get me to refinance. Yeah, like there interest rate for the next 30 years is going to save me back the interest I have already paid and only have 20 years left. Sure, it my payment was at the edge of affordability, maybe, but my mortgage is only about 1/5 of my income.
 
KevinKohler said:
I've done/am doing that to my 76'. New suspension, fully adjustable, made from fiberglass. New tko600, wider wheels, running 295s in the back, and 265s in the front, kumho exta tires, rack and pinion steering, aluminum calipers with hawk pads, and a vortec top end rebuild on the 350, making, maybe...350hp? Either way, though, I can tell you...if I wanted to close in on NEW z06 performance, I'd need a new frame, and lose a LOT of weight. It'd cost me more, I think, to build a street legal car, out of a C3, that could hang with the likes of a new Z06, or a GTR. It's a daunting task. I figure my car can ALMOST hang with a base C5, needing more power to run with the C5 Z. And the difference between the C5 and C6 Z is astronomical. Plus, those new vettes have a heads up display on the windshield that is cool as he'll!
Click to expand...

Going with a 454 myself, I am persuing a torgue based upgrade instead of hp. Daily driving mostly happens well below 3000 rpm, and with modern double overdrive transmissions, I am looking a tremec 6 speed manual, however there is a 6 speed 4l80 automatic available on summit, and decently high ratio rearend, it won't be the fastest for the power, but will be much more economical and practical for daily use. Suspension, medium up grade that doesn't reduce ride but handles well and keeps stock ride height (might consider a 1" lower, but not more than that", and of course a powered rack and pinion. Breaking is going to be a major pain though, looking for an after market ABS (or a controller to swap in an ABS), disks all around with vented cross drilled rotars and if I spend the money, 4 piston breaks up front. I was looking last night at sleeves for a block, going to have the check the price on after-market blocks, may be cheaper but the centrafugal sleeves are supposed to give better wear and greater strength than stock block materials, will also have to check out price on the newer CGI blocks, much better longterm wear. Even if I go with a new block, going to get an old one anyways and keep it. Many states emissions laws require you to meet the emissions of year of manufacture of the chasis or block, whichever is newer. I sure as hell don't want to meet 2012 standards in a car that was essentially zero emission when new (original was smog pump only, and even Cali doesn't care if you trash those anymore).
 
AdamT said:
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.
Click to expand...

A new car losses its value once you drive it off the lot. So it suddenly falls.
 
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I've done/am doing that to my 76'. New suspension, fully adjustable, made from fiberglass. New tko600, wider wheels, running 295s in the back, and 265s in the front, kumho exta tires, rack and pinion steering, aluminum calipers with hawk pads, and a vortec top end rebuild on the 350, making, maybe...350hp? Either way, though, I can tell you...if I wanted to close in on NEW z06 performance, I'd need a new frame, and lose a LOT of weight. It'd cost me more, I think, to build a street legal car, out of a C3, that could hang with the likes of a new Z06, or a GTR. It's a daunting task. I figure my car can ALMOST hang with a base C5, needing more power to run with the C5 Z. And the difference between the C5 and C6 Z is astronomical. Plus, those new vettes have a heads up display on the windshield that is cool as he'll!
Click to expand...

Going with a 454 myself, I am persuing a torgue based upgrade instead of hp. Daily driving mostly happens well below 3000 rpm, and with modern double overdrive transmissions, I am looking a tremec 6 speed manual, however there is a 6 speed 4l80 automatic available on summit, and decently high ratio rearend, it won't be the fastest for the power, but will be much more economical and practical for daily use. Suspension, medium up grade that doesn't reduce ride but handles well and keeps stock ride height (might consider a 1" lower, but not more than that", and of course a powered rack and pinion. Breaking is going to be a major pain though, looking for an after market ABS (or a controller to swap in an ABS), disks all around with vented cross drilled rotars and if I spend the money, 4 piston breaks up front. I was looking last night at sleeves for a block, going to have the check the price on after-market blocks, may be cheaper but the centrafugal sleeves are supposed to give better wear and greater strength than stock block materials, will also have to check out price on the newer CGI blocks, much better longterm wear. Even if I go with a new block, going to get an old one anyways and keep it. Many states emissions laws require you to meet the emissions of year of manufacture of the chasis or block, whichever is newer. I sure as hell don't want to meet 2012 standards in a car that was essentially zero emission when new (original was smog pump only, and even Cali doesn't care if you trash those anymore).
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Sounds like Obama has been good to you guys. :D
 
Superfly said:
**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.
Click to expand...

if still in the box, future wedding presents for those people you barely know but insist on inviting you to the reception anyway..:2razz:
 
Tigger said:
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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I'm no expert, but I personally think that your parents' problem (despite what they said) was that they suddenly changed their credit card useage. This is a red flag alert for most credit cards.

Tom wanted to buy a GPS system in a hurry...this was probably six-seven years ago when they still cost $600 or so. (He's probably got a $10K limit on that card and normally doesn't carry a balance.) We weren't sure which GPS would be the easiest for him to use, and we wanted a particular brand -- but he was willing to take "anything he could get" because he needed it for the next day. So. We bought one for $600 or so at Circuit City . . . then went to Best Buy and bought another brand there . . . finally to a third store...where, when he presented his card, it was confiscated and he was asked to call the credit card company. (This was all in the space of an hour-and-a-half or so.) He had to explain what he was doing, give the last four of his SSN and answer "his secret question" before they released the card.

I was travelling in Kentucky to see family (I'm from Illinois), and used my card to stay overnight in Cincinnati; charged dinner, etc.; the next day I gassed up in Lexington, KY. Then I went to a gas station/cigarette store in Manchester and bought about ten cartons of cigarettes for some of my family there. My card was refused for much the same reason -- "unusual pattern." Took me an hour to straighten it out, and I had to do the same thing Tom did.

Big brother is waaaaatching....:rofl
 
KevinKohler said:
20% of the average home price is a lot of cash.
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buy below average condition in a nice neighborhood and fix it up.....
sell it and repeat the process. Fellow I know kept doing that, after 4 of 5 homes he had one built to his wife's liking and paid cash. Down side of that is the frequent moving.
But that was then, nowadays a house is not so much a growing asset....
 
The GM actions of Obama should feature prominently as a Republican issue.

The government "loaned" GM billions. GM uses the money to shift US production to China, building new facilities there. GM then "repays" the government with STOCK in GM - meaning not repaying at all. The money, of course, for the US government loan came from borrowing it from China...


So... the reality is that the US government borrowed money from China to pay for shifting US auto production and jobs from the USA to China - and now we are paying interest to China on the loans used to shift jobs to China paying China to built the auto factories. The president amazing BRAGS of the government PAYING CHINA including with interest to shift US auto production to China.

GM was not saved. It was moved to China at our expense. The only people saved was possibly pensions for retired GM auto workers.

Why shouldn't GM get money anywhere it can get if from including sub-prime loans? The government and Obama have no choice but to bailout anything GM does so Obama can keep bragging of "success in saving GM" - when really all he did was us US taxpayer money to shift GM production permanently to China.
 
joko104 said:
The GM actions of Obama should feature prominently as a Republican issue.

The government "loaned" GM billions. GM uses the money to shift US production to China, building new facilities there. GM then "repays" the government with STOCK in GM - meaning not repaying at all. The money, of course, for the US government loan came from borrowing it from China...


So... the reality is that the US government borrowed money from China to pay for shifting US auto production and jobs from the USA to China - and now we are paying interest to China on the loans used to shift jobs to China paying China to built the auto factories. The president amazing BRAGS of the government PAYING CHINA including with interest to shift US auto production to China.

GM was not saved. It was moved to China at our expense. The only people saved was possibly pensions for retired GM auto workers.

Why shouldn't GM get money anywhere it can get if from including sub-prime loans? The government and Obama have no choice but to bailout anything GM does so Obama can keep bragging of "success in saving GM" - when really all he did was us US taxpayer money to shift GM production permanently to China.
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GM is building cars in China for the Chinese market -- not for the US market. Same reason that Japanese and Korean companies are building cars in the US: it's expensive to ship cars half-way around the world.

Of course they are also adding jobs in the U.S., e.g.:

GM adds 250 jobs at Corvette plant in Ky. | Deseret News
GM adds 200 jobs at Chevy Volt plant | General Motors news | Detroit Free Press | freep.com
GM Adds 400 Jobs at Wentzville, MO Plant, Mulls Expansion | LinkedIn
GM adds third shift at Texas plant, 800 jobs - Jun. 22, 2012
 
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