I am new to this forum but it is obvious there are a lot of experts in the banking industry on here. I am curious of what some of you think the future holds for the sub prime auto loan industry? Logically speaking, it would seem the future is very bright considering the large number of new people with damaged credit; however, the capital problems are the same they have been for the last year. Do you see this changing in the near future? Has the TALF done its job up to this point?
Thanks in advance for your comments!
Agreed. The holiday gift to the Big 3 was the White House’s way of pushing the forthcoming restructuring of the Big 3 to the next administration. There is no fix there. Not to worry, Obama will waive his “green wand”, create millions of jobs and save the industry…..
If legislation becomes too restrictive it will cause more independent car dealers to use one of our favorite pre-repo phrases which is, “How far is it to your nearest bus stop?”
Sometimes, I really wonder if legislators really think propositions through completely, including consequences to the buying public. Another thought is that the legislators are really trying to establish the government as the source of everything and that people don’t need to work to provide anything for themselves.
As a special finance lender it is not a pretty picture with the laws they want to pass, wait maybe it is good. The people who still have good credit will still get good rates for what they want to finance. Everybody will else pay through to noise until some bank will talk to them. Before these changes our contracts ranged from 21 to 29% APR, if they past it will be 36% APR. Our goverment taken care of you.
Dealers are being forced to carry their own paper. This is an effective de-leveraging of the independent dealers. A process not unlike what is happening in other credit markets. Unfortunately most independent dealers do not have the tools to manage loans for re-sale at or near par value. We at ZimpleMoney.com are offering online loan servicing software for independent car dealers. It matches dealer revenue with software costs. We’ll aggregate dealer loans for resale to buyers or dealers can sell bulk loans to their regular community banks and credit unions. it is not a perfect world today – we need to get innovative with ideas.
Actually, the rate will be closer to 19.5%. It’s the lesser of the two. Unless I’m incorrect on the current 30-year yield. Don’t forget that a transaction of that ilk would classify as a high cost transaction which means your claim would not be allowed in BK court. Let’s not forget Obama’s proposal to create a Consumer Financial Protection Agency which has very broad lanquage regarding financial activity and provides authority for the extension of credit as well as servicing of loans.
I had no idea the political can of worms I was going to open!!!! LOL… We already have Government Motors, whats next?