GM ramps up risky sub-prime auto loans [Archive] - Glock Talk

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Sam Spade
08-16-2012, 21:25
http://news.investors.com/article/620090/201207271807/gm-risky-subprime-auto-loans-fuel-sales.htm?p=full

Here we go again, this time with cars, this time with a company that owes me (and every other taxpayer) tonnes of money.

More commentary here: http://www.volokh.com/2012/08/16/gm-headed-for-bankruptcy-again/

Guss
08-16-2012, 23:02
So they are 2.2% above industry average - Is that a big deal? Especially since they had not been experiencing bad results at lower levels. GM Financial is a money-maker, incidentally.

Now about the new Malibu... They started with an experimental ECO model. Wait until they ramp up the mainstream model.

walt cowan
08-17-2012, 06:11
barry will just foam the runway with tax payers money....again.

callihan_44
08-17-2012, 06:12
hmm, I love SOME GM products but I am highly disappointed in the decisions they have made lately.....doomed to fail with the current leadership IMO

Sam Spade
08-17-2012, 06:22
So they are 2.2% above industry average - Is that a big deal? Especially since they had not been experiencing bad results at lower levels. GM Financial is a money-maker, incidentally.

No, they're about 33% above industry average.

6 out of 100 industry loans default. 8 of 100 GM loans default. That's not an increase of 2%, that's an increase of 33%.

Brucev
08-17-2012, 07:20
No, they're about 33% above industry average.

6 out of 100 industry loans default. 8 of 100 GM loans default. That's not an increase of 2%, that's an increase of 33%.

Looks like GM is 2% above the industry average. If that is a real problem, the sainted stockholders will decide. The taxpayer has no say.

JFrame
08-17-2012, 08:56
Who knows -- maybe this is a calculated plan to have a collapse of the automotive industry during President Romney's first term...

Leftists are nothing if not forward-thinking...


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aircarver
08-17-2012, 09:30
Yeahhh...

But I don't see Toyota or Honda going down anytime soon ... So I'm good ! ...:supergrin:

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JFrame
08-17-2012, 09:44
Yeahhh...

But I don't see Toyota or Honda going down anytime soon ... So I'm good ! ...:supergrin:

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...And it's good to see you buying American (those Ohio and Kentucky factories turn out good cars! :cool: )...


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BuzznRose
08-17-2012, 10:09
Looks like GM is 2% above the industry average. If that is a real problem, the sainted stockholders will decide. The taxpayer has no say.

No, it is 2% HIGHER than the industry standard, but 8% IS 33% MORE than 6%


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BuzznRose
08-17-2012, 10:11
No, it is 2% HIGHER than the industry standard, but 8% IS 33% MORE than 6%


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Sorry. This was a redundant post. My bad.



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IvanVic
08-17-2012, 12:11
I picked up a new Tahoe @ 0% for 72 months, about the best financing you'll ever get on a car. Then again, I have good credit and it was an incentive deal to move the new 2011's before the 2013s hit the lot.

JFrame
08-17-2012, 12:18
I picked up a new Tahoe @ 0% for 72 months, about the best financing you'll ever get on a car. Then again, I have good credit and it was an incentive deal to move the new 2011's before the 2013s hit the lot.

Yeah -- I don't think it's the car buyers with good credit that we're concerned about -- any more than the home owners with good credit brought on the crash of 2007.

Congrats on your great loan! I'm in the process of refinancing my house at a historically low rate. :cool:


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Guss
08-17-2012, 12:30
No, it is 2% HIGHER than the industry standard, but 8% IS 33% MORE than 6%


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It's only 2 percentage points on a very big scale.
GM Finance is a money-maker, incidentally. Doing even better than last year. It's hard to argue with success.

Sam Spade
08-17-2012, 16:46
GM Finance is a money-maker, incidentally. Doing even better than last year. It's hard to argue with success.

How long do you think that success will hold if they continue to increase the proportion of sub-prime loans?

Guss
08-17-2012, 17:17
How long do you think that success will hold if they continue to increase the proportion of sub-prime loans?
What's the worse that can happen if they have to repossess 2% of the cars they loaned money on?

CitizenOfDreams
08-17-2012, 17:47
No, it is 2% HIGHER than the industry standard

It's 2 percentage points or 33 percent higher than the industry standard.

aircarver
08-17-2012, 17:55
We see a perfect example of 'Democratic math' .....:upeyes:

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Sam Spade
08-17-2012, 19:50
What's the worse that can happen if they have to repossess 2% of the cars they loaned money on?

Well, the whole TARP mess was brought on by a 4% default rate with sub-prime loans. And according to the article, GM is increasing the number that they're writing.

You seem knowledgable---how much bad paper do you think they can carry before trouble rears it's ugly head again?

QNman
08-17-2012, 21:58
What's the worse that can happen if they have to repossess 2% of the cars they loaned money on?

Repo cars are money losers. That's part of "the worse".

RCP
08-18-2012, 00:50
I picked up a new Tahoe @ 0% for 72 months, about the best financing you'll ever get on a car. Then again, I have good credit and it was an incentive deal to move the new 2011's before the 2013s hit the lot.

Same here except I bought a Silverado. :wavey:

Skyhook
08-18-2012, 06:36
hmm, I love SOME GM products but I am highly disappointed in the decisions they have made lately.....doomed to fail with the current leadership IMO

Hard to beat that Silverado.

GM is that snake devouring itself tail first. But, hey! Since King/Emperor Barry The Great insists on throwing our money around like monkeys throw scat.. :dunno:

CitizenOfDreams
08-18-2012, 08:38
Repo cars are money losers. That's part of "the worse".

Subprime loans on something that's expensive, mobile, easily destructible and rapidly depreciating? What can possibly go wrong? :rofl:

QNman
08-18-2012, 09:46
Subprime loans on something that's expensive, mobile, easily destructible and rapidly depreciating? What can possibly go wrong? :rofl:

:rofl::rofl:

EXACTLY!!

BuzznRose
08-18-2012, 10:09
It's 2 percentage points or 33 percent higher than the industry standard.

Agree...what I was trying to say, if I wasn't clear.


"Courage is being scared to death and saddling up anyway."
-- John Wayne

IvanVic
08-19-2012, 05:30
Yeah -- I don't think it's the car buyers with good credit that we're concerned about -- any more than the home owners with good credit brought on the crash of 2007.

Congrats on your great loan! I'm in the process of refinancing my house at a historically low rate. :cool:


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Same here except I bought a Silverado. :wavey:


:thumbsup:

barbedwiresmile
08-19-2012, 07:19
The problem here, once again, is the state. A private company should be free to lose as much money as they please. Where things get dicey is when private losses are backstopped by public funds. This dynamic creates a range of perverse incentives that skew the behaviors of economic actors: in this case both creditors and debtors alike. Unfortunately, this dynamic now defines the entire financial sector of our economy (with thanks to votes like those of your boy, Paul Ryan). This was a genie fairly easily let out of the bottle. Will be interesting to see politicians put it back in.

ETA: presumably this paper is securitized and I wonder, if so, by whom. I would not be surprised to find Jamie Dimon involved somehow. Also curious to know who the counterparties are to 2012 auto-secured ABS (other than taxpayers, of course).