Parts Catalog Accessories Catalog How To Articles Tech Forums
Call Pelican Parts at 888-280-7799
Shopping Cart Cart | Project List | Order Status | Help




Go Back   PeachParts Mercedes-Benz Forum > General Discussions > Off-Topic Discussion

Reply
 
LinkBack Thread Tools Display Modes
  #1  
Old 07-20-2014, 12:30 PM
Registered User
 
Join Date: May 2011
Location: NYC
Posts: 5,192
Sub-prime auto loan bubble

http://dealbook.nytimes.com/2014/07/19/in-a-subprime-bubble-for-used-cars-unfit-borrowers-pay-sky-high-rates

(use private browsing to click the link if you hit the paywall) This doesn't bode well for the future.
Reply With Quote
  #2  
Old 07-20-2014, 12:46 PM
Hatterasguy's Avatar
Zero
 
Join Date: Nov 2002
Location: Milford, CT
Posts: 19,306
The dealers love it they make a fortune off it. The whole idea is that the car is repossessed and sold more than once.
__________________
2017 Chevy Silverado 1500 LTZ
2007 Tiara 3200

"No free man shall ever be debarred the use of arms. The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government."
-Thomas Jefferson
Reply With Quote
  #3  
Old 07-20-2014, 03:05 PM
kmaysob's Avatar
Registered User
 
Join Date: Nov 2003
Location: mesa az
Posts: 1,673
the puy here pay here dealers do even better. they install a passed time module in that shuts the car off until a payment is made.
__________________
have no worries.....President Obama swears "If you like your gun, you can keep it
Reply With Quote
  #4  
Old 07-20-2014, 05:42 PM
Dudesky's Avatar
Non Compos Mentis
 
Join Date: Dec 2011
Location: Mar a Lago Estate
Posts: 24,592
Guy I know has a used car lot and sells a lot to low income/bad credit....he repo's them all the time and doesn't mind because they already paid him some plus he might sell the car again if its not trashed.....if it is trashed, he got his money back anyway at the wholesale level.
__________________
Ted Kennedy

"It was also given to him to make war with the saints and to overcome them, and authority over every tribe and people and tongue and nation was given to him."

Sent from my Mothers basement using an old fashioned keyboard.
Reply With Quote
  #5  
Old 07-20-2014, 05:45 PM
engatwork's Avatar
busy
 
Join Date: May 2000
Location: Soperton, Ga. USA
Posts: 12,369
Quote:
the buy here pay here dealers do even better. they install a passed time module in that shuts the car off until a payment is made.
I went to help a young lady out in a BMW 3 series that had been shut down by something such as this. I was not able to help her.
__________________
Jim
Reply With Quote
  #6  
Old 07-20-2014, 05:56 PM
A Talent for Obfuscation
 
Join Date: Feb 2013
Location: In the Deep State
Posts: 11,261
If a dealer is selling vehicles to a clientele who have a high rate of non-payment/repossession episodes, is he justified in selling his cars at above-market prices and charging borderline usurious interest rates? Could he stay in business selling these cars to the same clientele if he cleared 10% on the sale? Could the lender continue to offer financing to this same clientele at a competitive rate, suffer losses due to non-payment of debt, and still remain in business?

An automobile insurance company has the latitude to vary its policy premiums based on prior loss experience. Say that you are a 45-year-old married male living in rural Kansas with a clean driving record and no accident history. Your annual premium for your 2010 Chevy Impala is $825 per year. The policy premium is set based upon prior loss experience. The same company is also insuring a 20-year-old unmarried male living in UES Manhattan who is driving a 2013 Porsche 911 Turbo Cabriolet. In the last year he picked up two speeding tickets for doing 95 in a 65. In your opinion, should that same insurance company offer an $825 annual premium to the Porsche owner? Their prior loss experience with this type of policyholder indicates that the likelihood of a six-figure claim in the next three years is about 60%.
Reply With Quote
  #7  
Old 07-20-2014, 08:32 PM
Hatterasguy's Avatar
Zero
 
Join Date: Nov 2002
Location: Milford, CT
Posts: 19,306
Car loans are easy to get, I could walk into a GMC dealer tomorrow and sign and drive for 2% at 60 months, anyone who has their act together will do something similar. The people who go to buy here pay here lots are financial wrecks already.


This are the same 500 FICO score people my uncle used to rent to when he had his crappy apartment building.
__________________
2017 Chevy Silverado 1500 LTZ
2007 Tiara 3200

"No free man shall ever be debarred the use of arms. The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government."
-Thomas Jefferson
Reply With Quote
  #8  
Old 07-20-2014, 08:38 PM
Registered User
 
Join Date: Dec 2005
Location: Carson City, NV
Posts: 3,786
Quote:
Originally Posted by P.C. View Post
If a dealer is selling vehicles to a clientele who have a high rate of non-payment/repossession episodes, is he justified in selling his cars at above-market prices and charging borderline usurious interest rates?
Yes.

Quote:
Could he stay in business selling these cars to the same clientele if he cleared 10% on the sale? Could the lender continue to offer financing to this same clientele at a competitive rate, suffer losses due to non-payment of debt, and still remain in business?
No.

Quote:
An automobile insurance company has the latitude to vary its policy premiums based on prior loss experience. Say that you are a 45-year-old married male living in rural Kansas with a clean driving record and no accident history. Your annual premium for your 2010 Chevy Impala is $825 per year. The policy premium is set based upon prior loss experience. The same company is also insuring a 20-year-old unmarried male living in UES Manhattan who is driving a 2013 Porsche 911 Turbo Cabriolet. In the last year he picked up two speeding tickets for doing 95 in a 65. In your opinion, should that same insurance company offer an $825 annual premium to the Porsche owner? Their prior loss experience with this type of policyholder indicates that the likelihood of a six-figure claim in the next three years is about 60%.
Are those figures hypothetical, or do you have a data source? I'm curious because $825 for the Impala seems high to me. OTOH, it wouldn't shock me to see the Justin Bieber type paying two grand a month or more.
__________________
Anyone who thinks a 300D is fast drives too slow.

83 300D Turbo with manual conversion, early W126 vented front rotors and H4 headlights 360,xxx miles
08 Triumph Street Triple 28,xxx miles, lowered 10mm in front, Pirelli Angel GT tires, EBC HH brake pads, otherwise stock.
Reply With Quote
  #9  
Old 07-20-2014, 08:43 PM
A Talent for Obfuscation
 
Join Date: Feb 2013
Location: In the Deep State
Posts: 11,261
The figures are hypothetical.
Reply With Quote
  #10  
Old 07-20-2014, 08:45 PM
A Talent for Obfuscation
 
Join Date: Feb 2013
Location: In the Deep State
Posts: 11,261
Quote:
Originally Posted by Hatterasguy View Post
Car loans are easy to get, I could walk into a GMC dealer tomorrow and sign and drive for 2% at 60 months, anyone who has their act together will do something similar. The people who go to buy here pay here lots are financial wrecks already.


This are the same 500 FICO score people my uncle used to rent to when he had his crappy apartment building.
Right, and they didn't get that 500 FICO from meeting most of their previous financial obligations.
Reply With Quote
  #11  
Old 07-20-2014, 08:48 PM
Hatterasguy's Avatar
Zero
 
Join Date: Nov 2002
Location: Milford, CT
Posts: 19,306
Hence no one will give them credit, well cheap credit anyway.

The next stop is Grandma I guess.
__________________
2017 Chevy Silverado 1500 LTZ
2007 Tiara 3200

"No free man shall ever be debarred the use of arms. The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government."
-Thomas Jefferson
Reply With Quote
  #12  
Old 07-20-2014, 08:55 PM
A Talent for Obfuscation
 
Join Date: Feb 2013
Location: In the Deep State
Posts: 11,261
Quote:
Originally Posted by Hatterasguy View Post
Hence no one will give them credit, well cheap credit anyway.

The next stop is Grandma I guess.
The only one in the family with an 800 FICO, and she plans to keep it that way...
Reply With Quote
  #13  
Old 07-20-2014, 09:14 PM
TylerH860's Avatar
KHAAAAAAN-gress
 
Join Date: Aug 2007
Location: Wichita, Ks
Posts: 5,187
I get people on my lot all the time hoping I'm a buy here pay here because my prices are much lower. The few times I've done it have all ended in disaster. They quit paying for one reason or another. Never again.

There's so many in town that they've driven all the prices of cheap used cars to ridiculous levels. The market is similar in Missouri, Oklahoma, Dallas too. I have to go far, far away to get cars for a decent price.

The people buying the cars are morons... Eventually the sub-prime dealers will run out of these morons and be in deep trouble. I'm already starting to see it.

There's not much money to be had in car sales anymore... my days in it are certainly numbered.
__________________
1985 500SL Euro w/ AMG bits 130k
1984 300SD Turbodiesel 192k
1980 240D Stick China 188k
2001 CLK55 AMG 101k
2007 S600 Biturbo 149k Overheated Project, IT'S ALIVE!!!
Reply With Quote
  #14  
Old 07-20-2014, 09:20 PM
Registered User
 
Join Date: May 2011
Location: NYC
Posts: 5,192
Good. Sub-prime car dealers losing everything and jumping under a bus would be a boon to society. And to bottomfeeders like yours truly, who like their used cars cheap and un-inflated by competition from dealers who buy them up to sell to unworthy trash.
Reply With Quote
  #15  
Old 07-20-2014, 09:39 PM
compress ignite's Avatar
Drone aspiring to Serfdom
 
Join Date: Feb 2004
Location: 32(degrees) North by 81(degrees) West
Posts: 5,554
So...Whatsa gonna hap to:

Car Max,
Deal Time,
Etc.,Etc.,
And all the other Big Time used car Regional/National chains?
__________________
'84 300SD sold
124.128
Reply With Quote
Reply

Bookmarks

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On
Trackbacks are On
Pingbacks are On
Refbacks are On




All times are GMT -4. The time now is 04:00 PM.


Powered by vBulletin® Version 3.8.7
Copyright ©2000 - 2019, vBulletin Solutions, Inc.
Search Engine Optimization by vBSEO 3.6.0
Copyright 2018 Pelican Parts, LLC - Posts may be archived for display on the Peach Parts or Pelican Parts Website -    DMCA Registered Agent Contact Page