By on January 25, 2018

Flicker

“We’re dirty, yeah, but so are the dealers. We’re all dirty in this business.”

The petite, honest-faced young lady sitting across from me at my lunch table doesn’t look like a predator. To be fair, she isn’t. She just works for a company that’s one of the biggest subprime lenders in the country, with offices in several states. By the time a dealer calls them for a loan, they’ve already tried every traditional bank and credit union in their Rolodex.

And in exchange for a delicious burrito, she agreed to meet with me and pull back the kimono on the subprime auto lending business in the United States, a business which many in the financial sector believe to be the next big bubble.

I have a lot of questions, and she’s more than willing to answer them. I ask what sorts of credit scores they’ll approve.

“We can pretty much approve any credit score. I just approved a 413 beacon score the other day. Of course, it was a 25 percent loan. Credit is really just one piece of the puzzle,” Elizabeth* (not her real name) explains to me. “Sure, we pull TransUnion and Equifax, but we’re also looking at their obligations versus their verifiable income. Medical bills don’t count. It’s just rent plus whatever else is on their credit report.”

“Sure,” I say. “That makes sense.”

“Of course,” she continues between small bites of burrito, “if they’ve just stopped paying a bill, something other than another car loan, we don’t count that bill as part of their monthly obligations. Nobody pays student loans. They’ll have like five or six loans and won’t have paid a damn dime in months. So we don’t worry about those.”

Hang on. It gets weirder. And better.

“We consider how long they’ve been at their job, how long they’ve lived at their current address, things like that. That’s more important than credit score. Of course, if they already have two cars they aren’t paying, we aren’t going to approve them for a third one. That happens a lot. If they have prior repossessions, we won’t touch it.”

“So how much are these loans normally for? What sorts of rates are you offering?” I ask.

“Most of them are between $10-12k. We don’t do older, high-mileage junk. We need to be able to sell the cars at auction if we have to repo them. Rates are between 15-25 percent. Average loan length is about 40 months.”

My jaw hits the table. “What percentage of cars are repossessed?”

“We aim for less than 2 percent of our total book of loans. Normally, we’re between 2-3 percent.”

“So this is a little different than the garden variety, suburban Atlanta-style Buy Here Pay Here lots, where the slimeball owners actually want to repo the car?” You all know what I’m talking about.

“Absolutely. We want our money. We don’t want to repo the car at all. But, of course, we have to sometimes.” Elizabeth laughs. “I once went repo hunting on Christmas Day.”

“What do you mean, repo hunting?”

“Well, we know where our customers live, where they work, where their closest relatives work. Sometimes my manager asks me to go see if I can find a car if it’s near my house. I had a customer whose family was right around the corner from my place, and I thought he might be there for Christmas dinner or something. Fortunately, he wasn’t, so I didn’t have to make that call.”

She thinks for a minute. “But yeah, I totally would have. It sucks that we have to do it, but I actually really love that part of the job. I called in a lady once because I saw her car at the fast-food place where she worked. We picked it up, and of course she called us wanting to know where her car was. Couldn’t be bothered to answer the phone for the 60 previous days when we were calling her twice a day, of course. But the minute her car was gone, she called us that second.”

“I’m guessing that you’ll work with people, then, if you don’t actually want to pick up the cars?”

“Absolutely. If they call us and tell us that they’re having problems, there’s a lot that we can do. We can take payments and put them at the end of the loan. We can move the payment date. If they’ve paid more than half of the loan, we can restructure the loan and stretch it out a bit to lower the payment.”

“So what triggers a repo?”

“Once they go 60 days, they’re on the list. After that, it just really comes down to how quickly we can find the car. We can’t open garage doors, we can’t go behind gates. If they’re hiding the cars, we have to get the Sheriff’s office involved. But we’ve pulled cars out of driveways several times before.”

“Do you ever have people that you feel bad for? Customers that you know have been screwed over?”

“Oh, yeah. There’s one little old lady who has a brain tumor. She comes in every single week to make partial payments. I know she doesn’t really know what she signed up for. There’s another guy who has a genuine learning disability, and I have to explain his loan to him every month. I feel terrible every time he calls. Lots of people have crises that they can’t predict, and these days, who can afford to be out of work or have an emergency?

But, to be honest, most people who don’t pay are just pieces of shit who don’t wanna work. I’ve had the repo guy pick up cars from the nail salon before — they won’t pay the car note, but you can always catch them at the nail salon. We don’t use Lojack, unfortunately, because it’s so expensive, but I wish we would.”

Elizabeth continues. “There’s straw loans that happen — we try to avoid that, but we can’t catch them all.”

“Hold up,” I say. “What’s a straw loan?”

“That’s where somebody else — a friend, a family member, etc., — signs the loan for a car that somebody else is driving. That’s actually illegal in most states, including this one. The primary driver has to be on the loan. Then you have situations where the dealer will powerbook the car — ”

“Hold up again. What’s ‘powerbooking?'”

“We won’t approve a loan for more than $1k above book for a first-time buyer, and we won’t go above $2k, period. So the dealer will inflate the value of the vehicle by adding all sorts of options to the description that it doesn’t actually have. We can plug the VIN into NADA or Black Book and get a value, but that doesn’t decode all of the options. The dealers know this, and they’ll try to say it has a sunroof, leather seats, etc. We go to the dealer website and look at the pictures of the car if it seems fishy.”

“Hayzoos. What shady people.”

“It gets worse. We have a lot of dealers — dealers you’ve heard of, franchise dealers — that we don’t allow to send us loans anymore because they’ve created fake pay stubs for customers.”

“What??”

“Oh, yeah. Dealers send over the most hilarious stuff. They spell the counties wrong on the tax withholding section, they make up fake companies. We research all of that. We can go to the Secretary of State website and see if there’s a business registered under that name, or we’ll search Facebook for a business page, or just a simple Google search. It’s amazing how many fake roofing companies these guys have made up.”

“So who are your very best customers, then?”

“Drug dealers. No question.” She’s very definitive on this point.  “They pay on time, every month, in cash at the office. They’ll even pay extra money toward the principal — I’ve explained how that works to a few of them, and they really love the idea. Of course, the money smells like weed and makes the office reek for the whole day. Great customers. Horrible people, yes, but great customers.”

“What are your best stories from your time in this business? You have to have some good ones.”

Elizabeth pauses for a moment. “Probably the lady who claimed we killed her husband. We call twice a day once somebody goes 30, without exception. Most people nowadays know how to block a phone number, but not these people. Well, she told us one day when we called that we had stressed him out so much that he had a heart attack and he died.”

“Get out of here.”

“For real, he died. We expressed our condolences, but then we had to ask when she’d be able to catch up the payments. Talk about awkward. Then there are the office bets.”

“What are those?”

Elizabeth pulls her phone out to show me her notes app. “I’ve got all my bets here. We bet each other about who will pay and who won’t. I don’t have a very good nose for it. There’s one woman in the office who’s really good at picking winners.”

I suppose you have to have a good sense of humor to work in that business for any length of time. Elizabeth confirms this.

“There’s one lady who’s been doing collections for us for five years. I just had my first anniversary. I don’t want to be doing this for four more years, I can tell you that. She’s miserable, and I would be, too.”

There’s so much more that I want to ask, but, unfortunately, Elizabeth’s lunch hour is over and she has to head back to the office.

I thank her for her time, and pray silently to myself that I’ll never find myself in a situation where I’ll need her company’s services. As the fictional character Mark Baum says in the movie, The Big Short, “Their entire business is based on screwing people over. How long can that last?”

[Image: EveryCarListed P/Flickr (CC BY-SA 2.0)

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86 Comments on “Bark’s Bites: Subprime Lending Is Even More Bizarre Than You Imagined...”


  • avatar
    Heino

    I want to say it is Santander Bank. The only bank in Spain that wanted to charge 5 or 7 Euros for a withdrawal. They were in trouble before with the sub-prime auto loan business.

  • avatar
    CincyDavid

    That’s not nearly as horrible as I might have imagined.

    I did face-to-face debt collection for a bunch of lenders, including subprime auto lenders and even Keyboard Acceptance (they did piano loans)…it was a lot of fun for a lot of years but I figured I had used up all of my good karma and quit several years ago.

  • avatar
    SCE to AUX

    This story makes me more sad than angry.

  • avatar
    mmreeses

    License plate recognition tech + stable address history = high probability of an easy repo for lenders.

    https://medium.com/@amuse/did-you-know-that-the-nsa-uses-uber-drivers-and-soccer-moms-to-spy-on-you-d912fe74befd

    Each day your car’s license plate is often scanned more than a dozen times, in several locations, by several different scanners from several different companies. The most common scanners are deployed on private vehicles and are capable of scanning 1,800 plates per minute. This data from these scans is uploaded to several different national license plate databases

    • 0 avatar
      ClutchCarGo

      I’ve been seeing vehicles cruising parking lots lately that are clearly scanning plates. This gave me a new product idea, a flip down cover for your license plate for when you park. It would need an automatic mechanism to flip back up when the car moved so that you wouldn’t get in trouble with the law, but I’ll bet you could sell plenty of them at auto parts stores and gas station convenience stores.

      • 0 avatar
        Middle-Aged Miata Man

        I wouldn’t be surprised to find it’s illegal to mask the license plate like that even when the vehicle is parked.

        • 0 avatar
          ClutchCarGo

          Possibly, but the scanning vehicles that I’ve seen look to be private operations that wouldn’t be able to do anything about it. One was a tow truck trawling for opportunities, the other operated by a bored looking young man who wouldn’t care or notice if a plate was obscured.

          It’s probably possible to make the cover just transparent enough for casual human viewing but opaque enough to defeat the camera.

  • avatar
    sirwired

    Lots of this didn’t surprise me at all. What did shock me was the 2-3% repo rate (that was much lower than I expected; these people must be good at sniffing out those unlikely to pay) combined with the 15-25% interest rate.

    If the risk of repo is truly that low, and much (if not all) the loan value can be recovered at auction, what justifies that ridiculous interest rate, other than “banks won’t touch these guys with a 39 1/2 foot pole”? I know that this sort of client sounds like they need a lot of TLC, but THAT much?

    If this is truly an accurate picture of the financials behind sub-prime auto loans, no wonder investors are falling over themselves to sign up this business; looks like easy money to me.

    • 0 avatar
      Garrett

      The funny thing is that they are underwriting those loans in a rather mercenary manner, and it works.

      They don’t care about how likely the borrower is to pay their bills, they are specifically looking for whether the car payment will get made, even if nobody else does.

      In a way, they actually increase the level of risk for all the other creditors.

    • 0 avatar
      Adam Tonge

      2% repo rate is extremely high (the auto loan delinquency rate where I work is less than 0.5%). Their delinquency rate is probably really high, but they don’t want the vehicle. People are always behind and end up paying more interest and fees. They want that 22% loan to be paid. Repossessing a vehicle is expensive.

      The financial institution I work at has been lending more to non-A/B borrowers. We don’t consider it subprime, but some may. I really look at debt-to-income ratio, job history, and credit history.

      We’ve started to look at what the borrower’s financial picture will be once we do the loan. I’ll consolidate debt in a separate unsecured loan to reduce payments and get an auto loan done. Something like that can get someone’s credit score from the low 600s to the 700s in a short amount of time.

    • 0 avatar
      bunkie

      Greed is what justifies it. As I have mentioned before, you need to understand who is funding sub-prime. The answer is the wealthy. All the big banks invest in sub-prime operations as well as private equity and some hedge funds. The returns are fantastic. The social cost, well, that’s someone else’s problem.

  • avatar
    JMII

    Makes sense that drug dealers can pay – they got the cash flow, it just doesn’t appear on any W2. Of course they could be shot or arrested at any time so still a high risk loan. Plus not an easy repo since you know they are packing and the vehicle might contain product.

  • avatar
    FreedMike

    “So this is a little different than the garden variety, suburban Atlanta-style Buy Here Pay Here lots, where the slimeball owners actually want to repo the car?” You all know what I’m talking about.”

    Ouch. Somewhere, Bertel Schmitt is laughing. Or maybe not.

    • 0 avatar
      Middle-Aged Miata Man

      There’s obviously some spectacularly bad blood/sour grapes involved here, but that particular example always struck me as being pretty above-board given their line of work.

      • 0 avatar
        iNeon

        Look in my eyes, what do you see?
        The cult of personality
        I know your anger, I know your dreams
        I’ve been everything you want to be
        I’m the cult of personality
        Like Mussolini and Kennedy
        I’m the cult of personality
        The cult of personality
        The cult of personality

  • avatar
    28-Cars-Later

    Very nice piece Mark.

    I can tell you these people are not issuing loans to JD Byrider who charges 200% of Black Book along with the 18-25%.

  • avatar
    Detroit-Iron

    The whole thing was surreal, but why don’t medical bills count? I thought the dirtbags in the medical industry spent a whole bunch of lobbying dollars in the last rehash of bankruptcy law to make sure you couldn’t escape them.

    • 0 avatar

      I think it’s because nobody pays them.

      • 0 avatar
        MoparRocker74

        ” I think it’s because nobody pays them. ”

        It could be also that there’s just an unwritten understanding that multiple repos, and a ton of store credit cards in collections means youre an irresponsible dickhead with no self control. No one decides to have a kidney transplant on an impulsive whim.

      • 0 avatar
        FreedMike

        Medical collections aren’t really a good predictor of risk. I’d classify them with stuff like “act of God.” Yes, it can happen. But it doesn’t really predict how well someone’s going to pay a loan or credit account that he signed up for.

        Plenty of people with terrific credit have these all over their credit. I see them every day.

        • 0 avatar
          cdotson

          Medical collections are also commonly follow-ups to incompetent medical billing and/or insurance scams.

          My wife works in a hospital part-time and has her medical insurance through them. Because she’s part time her premiums are much higher so I have the kids on my employer’s plan. This created all kinds of billing headaches when my youngest was born and my wife wound up in collections for my son’s birth-related bills despite the fact he was born at her place of employment.

          My wife also wound up in collections for an anesthesiologist’s bill that was submitted too long after the date of service for the insurer to authorize it. After a certain time they won’t allow the charges, and they kicked it back as something that we couldn’t be held accountable for either. The doc never bothered to bill us but just submitted the thing for collections 3 years later.

          I had a threat letter from a specialist warning of impending collection effort. My insurer said they were balance-billing to get money above what the agreement between the insurance company and the doctor authorized for that service which is action that would terminate their contract with the insurance company. Told the doc’s billing staff this and they made it go away. I’m guessing few people bother to find this stuff out before letting it all go to collections.

          • 0 avatar

            In my experience all the above pretty much true. You can settle lower and not pay a percentage and get away with it. The one exception I have had is a local hospital that has a a law firm that does their collections and will indeed file suit if they don’t get paid in full. But they seem to be the outlier.

      • 0 avatar
        indi500fan

        An hospital consultant MBA type told me that non-insured medical bills are typically collected about 7 cents on the dollar, overall.

    • 0 avatar
      Landau Calrissian

      Because part of credit history is evaluating financial responsibility. Racked up a bunch of credit card debt, or bought a car/house you couldn’t afford? Even if you can blame that on poor financial education, it still reflects upon a decision you made. But if your appendix suddenly bursts, or you get into some kind of accident, there’s not much you can do to control that expense; when you’re about to dial 911, you can’t shop around to find a cheaper hospital.

      • 0 avatar
        Middle-Aged Miata Man

        All of the above. It’s created a situation where most medical entities (and even collection agencies for them) will eagerly settle for a mere fraction of the total due if you’re simply willing to communicate with them.

    • 0 avatar
      Detroit-Iron

      Learn something new everyday. Of course accepting the settlement wrecks credit scores about as bad a bankruptcy, but it’s still nice to see that even predators use common sense.

      • 0 avatar
        dal20402

        It only wrecks your credit if you were late paying. If you ask for charity care timely, and pay the much lower settled amount timely (assuming you can), nothing bad should happen.

    • 0 avatar
      Erikstrawn

      It’s pretty common for medical bills to go past-due while the doctor and insurance companies are still fighting over proper coding of the bill. People don’t pay it up front, because if you do you never get reimbursed by your insurance company.

      • 0 avatar
        notwhoithink

        Truth. I had to take one of my kids to the hospital for a suspected case of meningitis. Turned out it was, but the viral kind (not the kill you in 24 hours bacterial kind). She was admitted that night, stayed for a couple of days getting antibiotics while the cultures were grown (in case it was bacterial after all). The hospital and insurance company went around and around FOR OVER A YEAR before they finally paid their share and I received a bill for the remainder. Fortunately the hospital was fine with letting it hang out there until the insurance company paid before sending me a statement.

  • avatar
    ClutchCarGo

    “Their entire business is based on screwing people over. How long can that last?”

    When hasn’t that been an effective business model? Has there ever been a place and time where a quick buck couldn’t be reliably made taking advantage of the poor and/or stupid?

  • avatar
    sportyaccordy

    Autonomous cars can’t come soon enough. These people would be served better by pay per ride services than ruined credit and double digit interest rates.

    • 0 avatar
      JohnTaurus

      “Sorry, honey, its a week until payday and I can’t afford an Uber, so I’m going to have to quit my job. Its a damn good thing we don’t have a car with 3/4 tank of gas in it, that would just be awful if I could use it to go to work. Our credit sure is better off with both of us unemployed and stranded here at a house soon to be foreclosed on.”

  • avatar
    CKNSLS Sierra SLT

    ClutchCarGo

    Obscuring you license plates is illegal in most states-even when parked.

    That’s why many times you see car covers with the license number stenciled on to them.

    Or-some covers actually have a “little window” where the plate is.

    • 0 avatar
      JohnTaurus

      I wonder if that cover that supposedly obscures your plate to cameras (but not to the naked eye) actually works?

      • 0 avatar
        CKNSLS Sierra SLT

        Again John-in many states anything that obscures your plate (even to a camera-even though it can be seen with the naked eye) is illegal.

        And yes-sometimes a cop will pull you over for it on a slow day.

        Here in Utah-we don’t have red light/traffic cameras-but I still see a few cars with these “dark tinted” supposedly anti camera coverings.

    • 0 avatar
      ClutchCarGo

      “Obscuring you license plates is illegal in most states-even when parked.”

      What are the chances that a cop is going to cruise a parking lot looking for obscured plates? Sure, there may be a few jurisdictions that are outfitting patrol cars with side view scanners, but mostly it seems like they use front/rear scanners that are looking at traffic.

      • 0 avatar
        dal20402

        Our parking enforcement vehicles have been equipped with automated plate readers. It’s illegal to park a vehicle with expired tabs or no plates on a city street, and they ticket each one they run across.

        • 0 avatar
          28-Cars-Later

          The land of the free and the home of the brave.

        • 0 avatar
          kvndoom

          Sore subject… my trashy heroin addicted next door neighbor has had a Saturn parked on the street with no plates for almost 2 months now. City hasn’t even put a notice on it. You know why? Because they know they’d be doing him a favor if they towed it. Guy hasn’t had a license in 10 years, gets arrested for driving several times a year, just a total don’t-give-a-sh1t attitude. He buys a car for a few hundred bucks, drives it illegally until he gets caught and it gets impounded, spends his night in jail, lather rinse repeat.

          To add insult to injury we have a city cop living on the adjacent block. It has nothing to do with the city not knowing about it.

          Further insult is the one time my daughter’s plates expired because she didn’t send in the registration, she had a nastygram on her window within DAYS.

          They target those whom they think they’ll get a buck from.

  • avatar
    JohnTaurus

    A few weeks ago, a friend up in Washington state called and asked my opinion on a mid-00s Volvo (for his girlfriend who was driving a perpetually overheating Honda Civic). I told him to invest in a nice pair of sneakers, and use them to run away from that car as fast as he could.

    Well, he didn’t. I told him it would be better to replace the entire engine in the Honda (if need be) and keep it, but no, she was hell-bent on trading it in. They got the Volvo.

    I asked why they didn’t pick a different car on the lot, he told me that they told her the Volvo was the only car they had that she could be approved for. All said and done, the loan was for around $6k, and he said he later looked up the car’s value and it was $2,900 (he didn’t give a source, nor did he say if he was looking at trade-in, wholesale, private retail, dealer retail, etc).

    Two weeks after the purchase, the transmission has failed in the Volvo. Its now a very expensive lawn ornament. Who could have predicted this unfortunate turn of events?

    My questions are, how did they finance her for more than the car’s value? Even assuming the loan value is higher than $2900, I doubt its $6k, either. Also, why would that Volvo be the only car they could get her approved for? Was that just a lie to get her into something that they wanted off the lot asap? Or was it the only thing they could get a high loan value for that they actually had very little money into?

    I begged him to avoid those §#¡ГГ¥ car lots in Tacoma and Shoreline, and either fix the Civic or find another car they could pay cash for. A family member gave him an early 00s Malibu, I suggested they sell both and buy something else, but for the love of God, don’t go to a lot.

    The real question is, why ask someone for advice and then do the opposite even after you agree that their reasoning is sound? Okay, I know the answer to that one…

    • 0 avatar
      Detroit-Iron

      “The real question is, why ask someone for advice and then do the opposite even after you agree that their reasoning is sound?”

      I think a variant of that question has been the QOTD many times going back many years on this site. The consensus is, even though you may be known as the car guy in your circle, don’t bother weighing in because they won’t listen anyway.

      • 0 avatar
        JohnTaurus

        Which explains how an extended family member ended up with a Ford Freestar and a newer Kia Sportage. If she’s lucky, one will be drivable while the other is being repaired.

        From my understanding, the Kia has spent more time in the shop than it has in her possession, and the Freestar’s trans is acting very weird a couple years after it was rebuilt (makes a high pitch noise at times, and “jerks” while moving at a constant speed, I’m guessing torque converter slipping?).

    • 0 avatar

      Loans get written for 120% of book value. All. The. Time.

    • 0 avatar
      Nick_515

      “Why ask someone for advice then do the opposite?”

      This cracks me up. Your advice is not an order to people. So don’t be a prick and either give the advice or withhold it. But stop expecting it will be followed just because it came from a genius like yourself. Admit it: you were dying to give that advice in the first place, regardless of outcome.

      • 0 avatar
        kvndoom

        While you’re right, the annoying part is just how much they keep nagging you about it. It’s never just asking in passing. Days or weeks of constantly seeking your opinion and you tell them the same thing again and again… then they do the exact opposite.

        It would be the same when people asked me for PC advice. Now I just tell them to buy a Dell. “Which one?” they say. “Whatever’s on sale.”

      • 0 avatar
        JohnTaurus

        Nick, I hope you didn’t exhaust yourself when you took what I said and ran all that way with it. Take a breather, it’ll be okay.

        No one is *required* to follow all advice given, but why ask when you plan on doing whatever it is you’re asking about anyway, was my point.

        But, thanks for the hard knocks lesson, dad.

        • 0 avatar
          tankinbeans

          She and her father probably had a cadre of people wandering behind them saying to get the Volvo because it’s the safest car on the road or some such likely dated stereotype of bulletproof reliability from the age of rolling bricks going a million miles.

          Then there were likely those who provide unsolicited advice at the drop of a hat.

          • 0 avatar
            JohnTaurus

            I don’t doubt it. What I really think was they bought the crap the dealer was selling, as in “the Volvo is the only car we can get you approved for”.

            I hate typical car dealers. Notice I said “typical”, because not everyone in the buisness is out to rape and pillage the innocent.

  • avatar
    stingray65

    While the interest rates are high, I expect the costs are also high. Sounds like they do a fair bit of background research before making the loan decision – that costs money. Then they have to deal with people that have trouble paying, and spend time trying to rework the loan schedule – that costs money. Then they have to call people who stop paying – that costs money. And in worst case they have to pay someone to find and repossess the car and auction it – that costs money. Finally, the 2% repo rate I assume is during the relatively booming current conditions – I expect all the costs listed above go up substantially when a recession hits.

    • 0 avatar
      danio3834

      During the great recession, auctions were overflowing with repos. For someone buying used cars, there was never a better time for bargains than 2008/09. Perhaps unsurprisingly, the inventory skewed heavily into luxury cars.

  • avatar
    dwford

    Virtually none of this is shocking to anyone who has ever sold cars. Powerbooking the cars is a daily occurrence, inflating income when the banks don’t require pay stubs is common. Buyers don’t care, they just want to get approved, so they don’ ask questions. Finance managers are under intense pressure to get deals approved, so most cut corners here and there. And yeah, these low end banks don’t care if buyers default on all their other bills, as long as they have a good history paying for their vehicles.

    • 0 avatar
      87 Morgan

      I’m not sure power booking is as prevalent nowadays or not. The online booking tools do a great job of VIN decoding down to the smallest detail.

      The biggest cases that I have heard prosecuted were all around up-fit trucks. Items that were not actually in the VIN like wheels/tires, lift, winch, dump bed etc.

      • 0 avatar
        Middle-Aged Miata Man

        Back when I sold Chevys in the 90s, we stocked conversion vans (and trucks, and Astros… and even Geo Trackers!) in part so we could ‘massage’ the vehicle price accordingly for certain scenarios.

  • avatar
    indi500fan

    A kid my daughter knows (well compared to me, he’s in his mid 30s) used to sell new cars at a Toyota store in a not so great ‘hood. He said there was no shortage of interested buyers, but a real shortage of qualifiable buyers. So he’s moved into the finance business servicing Dirtbag Motors, and making a lot more dough for himself.

  • avatar
    deanst

    Subprime lending is hugely profitable 9 years out of 10 – its the recession years that can kill a firm. Perhaps thats why more operations are becoming parts of larger firms, who can provide funding during the ugly years.

  • avatar
    thornmark

    The most infuriating:

    “Nobody pays student loans.”.

    Since BO effectively nationalized student loans that means the public picks up the tab. Congress should make the colleges and universities backstop the loans and pay them if the students don’t since they are the ones really getting the money that isn’t paid back. Then those same institutions wouldn’t teach crap majors which provide little value to the students or society.

    • 0 avatar
      28-Cars-Later

      The Feds own the student loan paper because Wall Street owns Congress and wanted to offload the risks since long term the debts will not be paid. Private profits, public losses. Same as it ever was. I’d love to blame the Kenyan but its just business as usual in ye old swamp.

      If the Feds really wanted to deflate the bubble and help students they would cap the loans and let the schools start to fail. The survivor institutions will find ways to operate without corporate welfare. Such irony the students are too uneducated to see this.

      Did you know one of the purposes of the Fed was to backstop the banking cartel when it inevitably failed? From the word go it was created in part to bail them out which was a lesson learned from the Panic of 1907, where it was JP Morgan who helped end the crisis by depositing into NY banks after a bank run to show his faith/trust in them. Their fractional fraud cannot work without at least some liquidity.

    • 0 avatar
      Phillin_Phresh

      Actually, the Federal Direct Loan program was created in 1992 by the first President Bush:

      https://en.m.wikipedia.org/wiki/Federal_Direct_Student_Loan_Program

      What Obama did was stop using private lenders as a middleman, a change which actually saved the government a ton of money. The student loan default rate is currently around 11%, but this debt is actually very secure because it can’t be discharged in bankruptcy.

      I don’t see why it makes sense to restrict universities. They are just offering a range of education options like any business would, and the students (their customers) are free to choose what they want to study.

      • 0 avatar
        FreedMike

        From a certain political point of view, any course of study that doesn’t involve making piles of money is completely irrelevant. That’s why we have a president who can’t piece together coherent tweets.

  • avatar
    Shortest Circuit

    Now that’s a good movie. Except for the whole Florida part. We know it wasn’t kinda-broke white families and strippers who blew up the market there.

  • avatar
    Sub-600

    If Osama bin Laden had a student loan they’d have found him on September 12th.

  • avatar
    kvndoom

    Change the topic to “rent-to-own” and that was my life from 1998 to 2000. Except rent-to-own didn’t even do credit checks at all. Job and a pulse and you’re approved.

    Imagine calling a lady at work and telling her she needs to turn in her WEDDING RING because her husband is behind on payments.

  • avatar
    CincyDavid

    I have trouble being sympathetic to MOST people who are in dire financial straits. In my experience most of them got there by a cascade of bad decisions made over years, if not decades. A few got there due to bad luck or circumstances beyond their control. This whole consumerist society drives me nuts…instant gratification is the name of the game!

    Who the hell would finance a wedding ring?!? Go to a pawn shop and buy a “temporary” one until you can afford something nicer. My dad grew up in the depression and still loves to talk about eating onion sandwiches when he was a kid because that was all they had…probably happened once but it makes for a good story.

    I’ve been broke, but I’ve never been poor. Broke is temporary, poor is a state of mind.

  • avatar
    Bercilak

    Just a point of correction (some would say pedantry, but those people can kiss my arse): you are mixing metaphors. One either pulls back the CURTAIN, or OPENS the kimono. To someone who knows these expressions, your hash of them sounds like you’re singing one song while playing the music for another.

  • avatar
    seth1065

    Am I the only ass who pays their bills all of time, medical bills, student loans, car loans, mortgage, no wonder it seems everyone else lives better than me.

    • 0 avatar
      kvndoom

      That’s what the “middle class squeeze” is all about. And no you aren’t the only one.

      There’s no joy in responsibility. I don’t think you get to reap the rewards until you retire and THEN you get to do nice things with less burden.

      I just sold the Altima last week. I still haven’t paid the last $3200 of my student loans with that because I just like seeing it in the bank.

    • 0 avatar
      FreedMike

      I’ve been responsible and irresponsible. I can tell you irresponsibility is easier in the short term, and radically harder in the long term.

    • 0 avatar

      I pay all my crap, and what it’s netted me is no debt aside from a mortgage payment.

  • avatar
    Hoon Goon

    “Great customers. Horrible people, yes, but great customers.”

    So welfare queens and the jobless nail salon hangouts are wonderful people, but poor customers?

    Got it.

    • 0 avatar
      JohnTaurus

      Right, if they’re just selling weed (as was referenced by the smell), I don’t think they’re horrible people. Dealing other “hard drugs” like meth and crack, yes, but nobody went into a blind rage and killed their family because they smoked a joint and vegged out watching an Ancient Aliens marathon.

      • 0 avatar
        Phillin_Phresh

        @ JohnTaurus

        Exactly my thought. I have lived in some pretty sketchy areas, and the pot dealers are some of the coolest people around. They won’t rob or murder you; they’re just running a business.

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