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Thread: Subprime Auto Loans

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    Subprime Auto Loans

    Will we never learn?

    I guess since GM is now too big to fail, we can have a car bubble, and the taxpayer can pay for auto loans.

    GM Goes Subprime (Some Companies Just Never Learn)

    Chad Brand submits: Just when I thought General Motors was on solid footing and heading in the right direction after shedding a large portion of its liabilities in bankruptcy, they seem to have forgotten what has happened over the last several years in the world of credit. One of the big reasons GM’s losses were compounded during the recession was because they funded a lot of subprime loans for their vehicles through GMAC. When those loans went sour, the losses not only negated the razor thin margins they had on the vehicle sales themselves, but resulted in a company that lost money on most of their cars. Hence, SUVs (with their fat profit margins) became a focus for the company, even in the face of rising gas prices, which aided their competitors in stealing market share. Since GM has exited bankruptcy and the economy has stabilized management has stated publicly a desire to once again expand into the subprime auto finance market, but this time GMAC was hesitant (and understandably so). Undoubtedly, the result has been that GM could be selling more vehicles if they were willing to finance customers with bad credit who could not get loans elsewhere. This morning we learn that for $3.5 billion in cash GM is buying AmeriCredit (#HYPERLINK "http://seekingalpha.com/symbol/acf"ACF), one of the larger subprime lenders in the country. They will use this new financing arm to get more cars into the hands of more people, many of whom could not get loans from third party lenders due to bad credit, no job, etc.Complete Story »
    GM Goes Subprime (Some Companies Just Never Learn) | www.bullfax.com

    edit: I don't start many threads, and wasn't sure if this is the forum where this one belongs, so if it's in the wrong place, would one of the mods kindly move it?
    Last edited by lizzie; 07-22-10 at 02:29 PM.
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    Re: Subprime Auto Loans

    Quote Originally Posted by lizzie View Post
    Will we never learn?

    I guess since GM is now too big to fail, we can have a car bubble, and the taxpayer can pay for auto loans.

    GM Goes Subprime (Some Companies Just Never Learn) | www.bullfax.com

    edit: I don't start many threads, and wasn't sure if this is the forum where this one belongs, so if it's in the wrong place, would one of the mods kindly move it?
    Hopefully if this goes sour, we won't break Obama's claim that there will be no more bailouts again.
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    Re: Subprime Auto Loans

    I hope you're right. I can see it now: headlines in the NYT and LAT "Wallstreet Bigwigs Behind Automobile Crisis"
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    Re: Subprime Auto Loans

    Quote Originally Posted by lizzie View Post
    I hope you're right. I can see it now: headlines in the NYT and LAT "Wallstreet Bigwigs Behind Automobile Crisis"
    More like, "Bush economy sinks GM."
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    I didnt have to read the article to tell you that you cant read.

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    Re: Subprime Auto Loans

    Quote Originally Posted by lizzie View Post
    Will we never learn?

    I guess since GM is now too big to fail, we can have a car bubble, and the taxpayer can pay for auto loans.

    GM Goes Subprime (Some Companies Just Never Learn) | www.bullfax.com

    edit: I don't start many threads, and wasn't sure if this is the forum where this one belongs, so if it's in the wrong place, would one of the mods kindly move it?
    It is typical. We saw it over and over again with banks for the last few decades. They make poor choices and the government bails them out. Therefore, there is no real risk to making more poor choices.

    I would be willing to bet as well that the $3.5 billion GM came up with to buy AmeriCredit is taxpayer money too.

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    Re: Subprime Auto Loans

    Seems like a decent investment to me:

    AmeriCredit Corp.: NYSE:ACF quotes & news - Google Finance

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    Re: Subprime Auto Loans

    This is just HORRIBLE!!!!!!!!!
    Subprime loans are evil. I was dumb enough to get into one 4 years ago and it was 3 years of HELL! They bumped up the interest rate after 4 months.... lied about late payments.... lied about never getting payments..... lied about a deferment payment.... hid charges that were above the APR. Harrassed me. I basically paid $11,000 on a $13800 loan over 2 years and I STILL owed them $12,000!!!!!!!!!!!!!!!!!!!
    I thankfully got the $12000 all at once and paid the loan off. But still.... $23K paid for a 13,800 loan. They legally sold my money!!!
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    Re: Subprime Auto Loans

    Quote Originally Posted by NolaMan View Post
    It is typical. We saw it over and over again with banks for the last few decades. They make poor choices and the government bails them out. Therefore, there is no real risk to making more poor choices.

    I would be willing to bet as well that the $3.5 billion GM came up with to buy AmeriCredit is taxpayer money too.
    Not sure what this has to do with banks, perhaps you could explain.

    Also does anyone get tired of saying that there is no real risk with banks. ninety banks have already gone out of business this year.

    If you mean the mega banks, Bear Sterns was sold for essentially nothing, Lehman went broke, Merill was sold for a song, Citi stock is still down 90% even after the government has been repaid with interest and are selling off 7.7 billion shares at a profit.

    It seems so easy to use the trite lines that the administration has sold to so many that do not know much about business.

    As they say, the public gets the government they deserve!

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    Re: Subprime Auto Loans

    Another reason why you take out a personal loan from the bank to buy a car instead of a car loan.
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    Re: Subprime Auto Loans

    Quote Originally Posted by lizzie View Post
    Will we never learn?

    I guess since GM is now too big to fail, we can have a car bubble, and the taxpayer can pay for auto loans.

    GM Goes Subprime (Some Companies Just Never Learn) | www.bullfax.com

    edit: I don't start many threads, and wasn't sure if this is the forum where this one belongs, so if it's in the wrong place, would one of the mods kindly move it?
    Why exactly did we have to bail these bums out???

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