Sub-Prime Auto Financing Increases

[ArcticSplash]

The Associated Press: More auto loans going to subprime buyers

It is now easier to get a sub-prime auto loan than before the recession began.

Interesting that there are suitors now to AmeriCredit (big time subprime auto lender). If revenue remains positive at these lending levels, that could trigger a rebirth of lower-credit lending in other categories.


If unemployment can come down, this will probably evolve into a flood of consumer credit coming back (and lots more consumer spending). Just what the Fed wants to see. This would also be the fuse that triggers inflation.


If you aren't interested in joining the hordes looking to take on new personal debt, you might still benefit from higher yields on your savings or could convert to safe bonds. Beats getting less than 1% in a crappy savings account.

[Malloy]

Pathetic.

[phillysw]

Oh good, another bubble that will burst in a couple of years, resulting in a flood of repos and people stuck without transportation from their pre-foreclosure home in the exurbs to their job interview in the suburban sprawl corporate park. Then the guv'mint can bail them all out, raise the parking FSA deduction limit, maybe offer another cash for clunkers program to be sure everyone gets a shiny new car again. Heck, maybe Detroit will need another bail out by then too.

[DrDoom]

umm somehow I doubt that "the Goldman Sachs" is going to be leveraging used car loans of which these subprime loans are the majority into quadrillions worth of derivatives and then minting CDS's to cover the other side of their fraudulant bets. Also, a car is not exactly appraised by a host of fraudulant appraisers hired by the banks. If the bank wants to give me a loan for a Smart Car at 25K when the car is valued at 15K I'm not going to be competing with people bidding to buy the car at 25K. In the housing subprime fiasco/control fraud a house was worth what ever a bank was willing to lend out essentially..hence the inflated prices and the resulting leverage via MBS's and other derivative frauds that now the real economy is paying for through unemployment and cuts in social spending. While this subprime auto situation is distasteful and has its problems it's not exactly a train wreck situation like what happened with the housing bubble.