Sub-prime borrowers being targeted for auto loans on clarkhoward.com

Subprime borrowers may now be able to get a car loan through GMAC thanks to federal bailout money, according to The Detroit News.

Clark says it's like going back to the future with the lowered lending standards that got us in trouble in the first place across so many credit markets.

Applicants with credit scores of less than 620 will now be considered. Of course, if you have terrible problems with credit, it's probably not a good idea to take on a long auto loan.

It's clear this is happening right now because car sales were absolutely decimated last month. GM sales were down 45%; Chrysler was down 39%; Toyota was down 39%; and Honda was down 36%. The auto market overall was down an average of 37%.

So the nearly $6 billion made available by the government is being used to make loans to people who may not be able to pay them back -- all in an effort to try to move cars that aren't selling off dealer lots.

Clark thinks this is a bad idea. The answer to the lack of demand for these cars is not to go to the subprime market. Yet at the same time, he felt compelled to get the word out about this new influx of money if you're looking for a car loan.

What others are saying

Public Dowel
Thanks for the laugh Patdesign. I know what you meant, but at the same time I'm tired of being on the receiving end of the public "dowel". You'd think they would at least put some Vaseline on it!
By Jason @ 04/03/09 08:56:05 PMreport abuse
Back to the future lending
I give up. More "troubled assets" in the making, courtesy of mega-banks playing with government "play dough". Wasn't the credit thaw intended to facilitate business investment and production? Our propensity to consume is well established -- how about encouraging savings and prudent living rather than continued consumption?
By Dave Wiltsee @ 04/03/09 02:13:31 PMreport abuse
plug-in electric cars
Where's the extra power coming from the power grid? Power company's are going to screw us in the end when we all get a plug-in electric car.
By Steveg @ 04/03/09 12:56:35 PMreport abuse
good news?
i'll be in the market to buy a used car in about 2 - 3 years. that should be about the time these subprime borrowers will default and get their cars repo'd. the market will be flooded with these cars and i should be able to get a bargain. i guess that's how i get my share of the bailout money. :(
By z @ 04/03/09 08:18:38 AMreport abuse
New Cars
Buying a car is risky now because we can not depend on the gas supply. The gas shortage of 2008 left people stranded. The price is not stable. Gas may be $10 a gallon before the new car is even paid for. No thanks. I am waiting for the plug-in electric cars.
By BJ @ 04/03/09 06:06:08 AMreport abuse
Next Disaster?
Great! Now the next disaster will be the cars that people who can't afford them got with the public dowel. Look what the subprime market did with housing? One disaster after the other. If you aren't making a living salary you don't need a new car. My used!
By patdesign @ 04/02/09 08:23:23 PMreport abuse
Sub-prime borrowers being targeted auto loans.
Maybe they should re-do the entire FICO score system and 620 can be the highest score than 720. Also raise the cost of living salaries so peole can afford new cars.
By cndy @ 04/02/09 07:35:10 PMreport abuse

Public Dowel

Thanks for the laugh Patdesign. I know what you meant, but at the same time I'm tired of being on the receiving end of the public "dowel". You'd think they would at least put some Vaseline on it!

By Jason @ 04/03/09 08:56:05 PMreport abuse

Back to the future lending

I give up. More "troubled assets" in the making, courtesy of mega-banks playing with government "play dough". Wasn't the credit thaw intended to facilitate business investment and production? Our propensity to consume is well established -- how about encouraging savings and prudent living rather than continued consumption?

By Dave Wiltsee @ 04/03/09 02:13:31 PMreport abuse

plug-in electric cars

Where's the extra power coming from the power grid? Power company's are going to screw us in the end when we all get a plug-in electric car.

By Steveg @ 04/03/09 12:56:35 PMreport abuse

good news?

i'll be in the market to buy a used car in about 2 - 3 years. that should be about the time these subprime borrowers will default and get their cars repo'd. the market will be flooded with these cars and i should be able to get a bargain. i guess that's how i get my share of the bailout money. :(

By z @ 04/03/09 08:18:38 AMreport abuse

New Cars

Buying a car is risky now because we can not depend on the gas supply. The gas shortage of 2008 left people stranded. The price is not stable. Gas may be $10 a gallon before the new car is even paid for. No thanks. I am waiting for the plug-in electric cars.

By BJ @ 04/03/09 06:06:08 AMreport abuse

Next Disaster?

Great! Now the next disaster will be the cars that people who can't afford them got with the public dowel. Look what the subprime market did with housing? One disaster after the other. If you aren't making a living salary you don't need a new car. My used!

By patdesign @ 04/02/09 08:23:23 PMreport abuse

Sub-prime borrowers being targeted auto loans.

Maybe they should re-do the entire FICO score system and 620 can be the highest score than 720. Also raise the cost of living salaries so peole can afford new cars.

By cndy @ 04/02/09 07:35:10 PMreport abuse

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Apr 02, 2009 -- Sub-prime borrowers being targeted for auto loans

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