Is GM headed for another subprime loan crisis? - Camaro5 Chevy Camaro Forum / Camaro ZL1, SS and V6 Forums

Camaro2ss2013 · 11-12-2013, 05:53 PM

Interesting article I came across when I got home from work.

http://money.msn.com/investing/post-...me-loan-crisis

Sikoriko · 11-12-2013, 06:00 PM

Wonder how many dealers that closed down came back? GM is just too big.

AdamEL · 11-12-2013, 06:41 PM

I like how they compared GM buyers with lower credit scores to Ford buyers with lower credit scores. Of course Ford is going to have a lower number there. Their cars and trucks are way too much money. People with average or below average credit scores simply can't afford them. At least GM offers a good amount of affordable vehicles for people. Although, I had no idea that repossession numbers were that huge. I've only heard of one or two people in my life that ever got a car repossessed. Weird...

Michael2000 · 11-12-2013, 07:37 PM

This is exactly what got Mitsubishi in trouble.

Michael

Rocky1974 · 11-12-2013, 07:52 PM

It's not just GM.

http://www.detroitnews.com/article/2...-U-S-car-sales

oldfriend · 11-12-2013, 08:56 PM

The dooms day is coming , again !

2012-1822 · 11-12-2013, 10:46 PM

I appreciate that post. I have to write about an article for my finance class every week, I think I'll use that one tomorrow. Supposed to all be from the Wall Street Journal, but I bet the prof will let this one slide.

*DGthe3* · 11-13-2013, 12:40 AM

The problem isn't with subprime lending in and of itself, its how far below perfect the borrower is & how likely they are to default on their payments. And car payments are usually the last thing that someone will skip on: you can live in your car if you have to, but its pretty hard drive your home to work.

ssrs2lt · 11-13-2013, 06:20 AM

when the all mighty dollar calls, rules get adjusted and loosened. It won't just be GM.

shine2013 · 11-13-2013, 07:47 AM

IMHO people know if they can comfortably afford something when they enter the agreement. It's on them to make the judgement call.

shaffe · 11-13-2013, 09:45 AM

Quote:

Originally Posted by AdamEL

I like how they compared GM buyers with lower credit scores to Ford buyers with lower credit scores. Of course Ford is going to have a lower number there. Their cars and trucks are way too much money. People with average or below average credit scores simply can't afford them. At least GM offers a good amount of affordable vehicles for people.

So your saying Ford's are to expensive and Chevys are not?

If that was the case than Ford and Chevy wouldn't be direct competitors in just about every segment possible.

Impala starts at 26K, start checking those option boxes and you have a 40K+ car.

Taurus starts at 26K and start checking those option boxes and again you end up with a 40K + Car (excluded the SHO bc there is no Impala equivalent)

Malibu starts at 22.9K, Fusion starts at 21.9K start ticking the option boxes again and both cars are right around 31K

Fiesta and Sonic both start at 14K

Mustang starts at 22K, camaro at 23K

Silverado starts at 23.5K F-150 Starts at 24.4K

Explorer Starts at 29.6 Traverse starts at 30.7K

Tahoe starts at 43 Expedition starts 41

All these prices came right from build and price starting MSRP on Ford and Chevys website.

SO where exactly are Ford's to much money and Chevys are not?

Russo · 11-13-2013, 09:58 AM

there's no doubt the establishment wants to re-inflate the loan market with more credit/debt based bubbles... they will do it for auto loans, mortgage loans, student loans, etc... anything to distort what the free market calls for so a select few can get richer..

chain777 · 11-13-2013, 10:37 AM

Quote:

Originally Posted by AdamEL

I like how they compared GM buyers with lower credit scores to Ford buyers with lower credit scores. Of course Ford is going to have a lower number there. Their cars and trucks are way too much money. People with average or below average credit scores simply can't afford them. At least GM offers a good amount of affordable vehicles for people. Although, I had no idea that repossession numbers were that huge. I've only heard of one or two people in my life that ever got a car repossessed. Weird...

Besides your theory being debunked in the post by shaffe, it doesn't have anything to do with the price of the vehicles, it's about giving loans to people who are more likely to default because of low credit scores.

You don't have to look very hard in this forum to find posts about people being offered financing at lower rates, or better terms from Chevy compared to the competition, that sometimes wouldn't finance them at all. The repo rates that the article mentions are the result.

Like I mentioned in another thread where this was brought up, it moves more vehicles off the lots today, resulting in higher sales numbers, but doesn't work in the long run. It's a foolish way to conduct business, unless you don't care about the future.

Ringo64 · 11-13-2013, 11:31 AM

Quote:

Originally Posted by shine2013

IMHO people know if they can comfortably afford something when they enter the agreement. It's on them to make the judgement call.

Not everyone is as sensible as this statement. There wouldn't be a repo business if everyone was

With that said though selling to someone with lower credit score doesn't always mean they will default, just means there is a greater chance and even those with bad credit need a car that works. That call is up to them and what they can get financed on. I think it would be interesting to see what credit rating % bought what model of car.

This is just GM doing this either though.

11-12-2013, 05:53 PM	#1
Camaro2ss2013 Drives: 2013 2SS Camaro Join Date: May 2013 Location: North Carolina Posts: 56 View My Garage	Is GM headed for another subprime loan crisis? Interesting article I came across when I got home from work. http://money.msn.com/investing/post-...me-loan-crisis

11-12-2013, 07:52 PM	#5
Rocky1974 Drives: 2010 RJT 2SS M6 Camaro Join Date: Feb 2011 Location: Garrison,KY Posts: 1,548 View My Garage	It's not just GM. http://www.detroitnews.com/article/2...-U-S-car-sales __________________ 2010 RJT 2SS M6, Kooks Long Tubes, NPP Exhaust, CAI Cold Air w/Jannetty Scoop, RotoFab Washer Bottle, Elite Engineering Catch Can, MGW Shifter w/ZL1 Shaft and Knob, 2015 SS Sedan Steering Wheel and Air Bag, 2012 Heater Hose Conversion, 2012 Power Seat Conversion, RS Head Lights,Gen5DIY RS Conversion Harness, LED Fog Lamp Bulbs, Backup Camera Kit, NLP Spoiler, SLP Splitter, ZL1 Rockers and Diffuser, Color Matched Shark Fin, RS Roof Mouldings, Painted White Stripes, WCC LS3 Emblems, Heritage Grille and Blacked Out Tail Light Panel w/Retro SS Emblems, 416 RWHP, 411 RWT, Tuned by BlueCat.

11-12-2013, 10:46 PM	#7
2012-1822 Drives: Black ZL1 Join Date: Apr 2013 Location: City of Champions, Alabama Posts: 3,698	I appreciate that post. I have to write about an article for my finance class every week, I think I'll use that one tomorrow. Supposed to all be from the Wall Street Journal, but I bet the prof will let this one slide. __________________ Check out Alabama Camaros, for Camaro enthusiasts all around Alabama https://www.facebook.com/groups/1739...group_activity

11-13-2013, 12:40 AM	#8
DGthe3 Moderator.ca Drives: 05 Grand Am GT Join Date: Jul 2007 Location: Niagara, Canada Posts: 25,372	The problem isn't with subprime lending in and of itself, its how far below perfect the borrower is & how likely they are to default on their payments. And car payments are usually the last thing that someone will skip on: you can live in your car if you have to, but its pretty hard drive your home to work. __________________ Note, if I've gotten any facts wrong in the above, just ignore any points I made with them __________________ Originally Posted by FbodFather My sister's dentist's brother's cousin's housekeeper's dog-breeder's nephew sells coffee filters to the company that provides coffee to General Motors...... ........and HE WOULD KNOW!!!! __________________ Camaro Fest sub-forum

11-12-2013, 06:00 PM	#2
Sikoriko Drives: 2011 V6 IOM Join Date: Jul 2012 Location: San Diego Posts: 1,385 View My Garage	Wonder how many dealers that closed down came back? GM is just too big.

11-12-2013, 06:41 PM	#3
AdamEL Adam E. Lucchesi Drives: 2010 1SS/RS LS3 VR Join Date: Aug 2012 Location: Memphis, TN Posts: 1,381 View My Garage	I like how they compared GM buyers with lower credit scores to Ford buyers with lower credit scores. Of course Ford is going to have a lower number there. Their cars and trucks are way too much money. People with average or below average credit scores simply can't afford them. At least GM offers a good amount of affordable vehicles for people. Although, I had no idea that repossession numbers were that huge. I've only heard of one or two people in my life that ever got a car repossessed. Weird...

11-12-2013, 07:37 PM	#4
Michael2000 Drives: . Join Date: Jan 2013 Location: Southern California Posts: 467	This is exactly what got Mitsubishi in trouble. Michael

11-12-2013, 08:56 PM	#6
oldfriend Drives: Fiat 500 E Join Date: Dec 2009 Location: 32.7607/N. 16.95947/W Posts: 7,816 View My Garage	The dooms day is coming , again !

11-13-2013, 06:20 AM	#9
ssrs2lt Drives: too many Join Date: Jul 2013 Location: oh va pa ma tx Posts: 3,046	when the all mighty dollar calls, rules get adjusted and loosened. It won't just be GM.

11-13-2013, 07:47 AM	#10
shine2013 Drives: 2008 Mustang GT Join Date: Mar 2013 Location: Memphis Posts: 378	IMHO people know if they can comfortably afford something when they enter the agreement. It's on them to make the judgement call.

11-13-2013, 09:58 AM	#12
Russo Unofficial Glass Tech Drives: 2014 Ford F150 FX2 Join Date: May 2009 Location: Raceland, LA Posts: 1,376	there's no doubt the establishment wants to re-inflate the loan market with more credit/debt based bubbles... they will do it for auto loans, mortgage loans, student loans, etc... anything to distort what the free market calls for so a select few can get richer..