Buried in a feel good story about auto loans comes the news that subprime auto loans are at levels that we haven’t seen in nearly a decade.
The Office of the Comptroller of the Currency, a government entity that regulates and supervises banks, is sounding the alarm regarding risks related to auto loans.
While perusing Chevy’s website to see if there is any color of the 2014 Corvette that actually makes the car look halfway decent, I came across the financing offer pictured above. And, no, I did not enter any personal info that would lead GM’s captive Ally Financial (or whoever the hell GMAC is now) to deem me only eligible for such a high interest rate. Just what is going on here?
OEM captive financing arms are increasing their share of new car loans, with banks resorting to underwriting riskier loans in the used car market and to less credit-worthy buyers.
New technology is allowing buyers with no credit score – due to a lack of credit history or a personal bankruptcy – to get vehicle financing via examination of documents like the payment history of their cable or cell phone bill.
After setting up a retail lease program, Tesla is now moving closer towards a full-fledged captive financing arm, by launching a financing unit for corporate leases.
Tesla’s shares roared to over $250 on Tuesday February 5th, amid release of financial results. Tesla’s 8-K regulatory filing highlights a record 6,892 Model S’s sold, non-GAAP earnings of $46M ($0.33 on a per share basis), and projected vehicle delivery growth of 55% among others. The shares are currently trading just above the $260 during after-hours trading.
Fiat SpA said on Wednesday that it has signed an agreement to buy the remaining 41.5% stake in Chrysler that it does not own from the United Auto Worker’s retiree health-care trust, known as VEBA, for $3.65 billion in cash up front and another $700 million after the deal is completed. The agreement will allow Fiat and Chrysler CEO Sergio Marchionne to realize his dream of creating a global automotive group out of the two companies. The joint automaker would be the 7th largest in the world. (Read More…)