lizzie
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Will we never learn?:shock:
I guess since GM is now too big to fail, we can have a car bubble, and the taxpayer can pay for auto loans. :roll:
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?
I guess since GM is now too big to fail, we can have a car bubble, and the taxpayer can pay for auto loans. :roll:
GM Goes Subprime (Some Companies Just Never Learn) | www.bullfax.comGM 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 »
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?
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