Dec 2 2015

Unable to afford homes, Americans dive into subprime auto debt to purchase cars: Auto debt getting riskier with extended terms and chasing borrowers with lower credit scores.

The word “subprime” was synonymous with the toxic loans that were made during the credit bubble.  Some tend to think that those days are long gone but we simply have shifted the form in which toxic debt is filtered into the system.  Instead of making no-doc no-income loans on houses, we are now offering no-income […]

Oct 16 2015

The two trillion dollar towers of student and auto debt: As Americans are unable to afford homes, many go deep into debt to finance their education and cars.

As Americans continue to see their income lag inflation, many are unable to purchase homes in a market driven by hot money and a crowding out effect brought on by investors.  But people want to spend money, even money they don’t have.  So instead of buying homes, Americans have been on a car buying spree […]

Sep 16 2015

How subprime loans keep the bubble going: Subprime auto loans continue to grow as credit worthy customers drop out of the market.

Low interest rates create an environment that encourages debt based spending.  In regards to monetary policy, this is how you grease the wheels to get the economic engine spinning.  As part of your financial arsenal this can be used in moderation but the Fed has been using maximum credit leverage since the economy imploded and […]

Mar 22 2015

Driving our way into financial poverty with six-year car loans: Once a minority, six-year or longer auto loans now make up one third of all new loans.

Taking on debt for buying a car is a risky proposition.  Taking on subprime debt for buying a car is simply a bad financial decision.  The subprime loan market is booming for auto loans.  Cars can last longer, require basic maintenance, and typically run better than older models.  That brings up challenges for the auto […]

Feb 24 2015

Subprime lending at highest level since financial crisis hit: The three leading subprime categories are auto loans, credit cards, and student debt. $189 billion in subprime loans made in 2014.

The euphoria is bleeding into every corner of our debt driven economy.  Access to credit is being given to consumers but unfortunately, the loans are tied to items that are counter to becoming financially healthy.  More to the point, subprime loans have reached levels that were last seen only during the financial crisis.  As fewer […]

Oct 7 2014

The new subprime is in auto loans: One third of all new auto loans are of the subprime variety. Repossession are up 70 percent.

Leave it to Wall Street to resurrect the subprime loan. This time, subprime has found a comfortable home in the automotive industry. In the car addicted US culture, subprime debt is back in a massive way. Subprime auto debt is the new risky debt product. This is a big deal. $924 billion in total auto […]

Sep 16 2014

Poor Americans carry a record level of debt leverage: Subprime economics and leveraging the poor into a treadmill of continual poverty.

Poor Americans carry deeper debt levels than they did during the depths of the Great Recession. To boost auto sales, many dealers have decided to offer subprime loans to prospective clients that have very little financial means. Many for-profit colleges have a business model that virtually solicits and lures in poor Americans into their debt […]

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