Monday, March 11, 2013

Haven't we done this before?

43.7% of New Car Loans in the Fourth Quarter of 2012 Were Sub-Prime… This is the highest percentage of sub-prime car loans since late 2007. What makes it worse is that the length of car loans is stretching out, now averaging 65 months.

So, in the wonderful world of “didn’t we get into this mess with too much debt to people who could not afford it?” – doesn’t it look like we are doing this all over again? It seems that certain segments of our economy learned nothing from the last five years…or did they? These sub-prime car loans are being made by the lending arms of car companies, among others. This would be companies like GMAC, which failed spectacularly during the crash. However, GMAC was reinvented with bailout bucks and is the new Ally Bank, which is all smiles and giggles on TV commercials. I guess those lenders know more than we do. They can make all the sub-prime loans they want, if things get really bad, taxpayers will always bail them out

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