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What are you afraid will happen, we'll have an auto bubble, where the price of cars will dramatically rise beyond reason?
Auto loans are not like mortgages. For as long as I can remember, auto companies have offered auto loans to borrowers with less than stellar credit. They make up that additional risk by increasing the interest rate. In any case, if the borrower fails to pay the loan, the auto company can repossess the car, which is far easier than foreclosing on a home.
As the link says,
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Subprime lending in cars is not as risky as in housing. Car loans are cheaper, so customers have an easier time making payments. When they do go into default, the cars can be repossessed and sold to recover some of the loss.
I know that summer is trying to knit this as something sinister related to Obama but there is neither smoke nor fire in this story.
What are you afraid will happen, we'll have an auto bubble, where the price of cars will dramatically rise beyond reason?
You missed the boat my friend, a looooong time ago.
Crushing perfectly good cars is what keeps the poor away from affordable wheels and compels them to take out 48 to 60 month loans. To help your finance buddies. Any person using logic can determine that when you reduce supply or increase available credit for an asset, the price of the asset necessarily goes up.
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I know that summer is trying to knit this as something sinister related to Obama but there is neither smoke nor fire in this story.
You know nothing.
I would be against the partial nationalization of any company regardless of whether it was Obama or Ron Paul doing it. So would any other rational person.
Repossesed houses can be resold also. What do we have today though? Housing sitting empty with banks reluctant to take on even more even though people are not making payments.
You can resell repossesed cars when there is a market. Flood the market and everyone loses.
I would be against the partial nationalization of any company regardless of whether it was Obama or Ron Paul doing it. So would any other rational person.
Your thread isn't about "partial nationalization". It's about you implying that there is a big problem in GM loans. I don't read it that way. They have more of a proportion of high-risk loans that are offset by higher risk premiums charged the customer. If those customers don't default, GM actually makes more money on the loans.
We both know that if this happened under a Ron Paul Administration we wouldn't hear a peep out of you. All of your posts are designed to be critical of Obama.
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