Quantum Windbag
Gold Member
- May 9, 2010
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GM is relying on a lot of less than perfect loans to sustain its sales. Am I the only one that remembers what happened the last time the government encouraged people who can't afford something to buy anyway?
GM Ramps Up Risky Subprime Auto Loans To Drive Sales; Taxpayers Still Own 26.5% - Investors.com
President Obama has touted General Motors (GM) as a successful example of his administration's policies. Yet GM's recovery is built, at least in part, on the increasing use of subprime loans. The Obama administration in 2009 bailed out GM to the tune of $50 billion as it went into a managed bankruptcy.
Near the end of 2010, GM acquired a new captive lending arm, subprime specialist AmeriCredit. Renamed GM Financial, it has played a significant role in GM's growth .
The automaker is relying increasingly on subprime loans, 10-Q financial reports shows.
Potential borrowers of car loans are rated on FICO scores that range from 300 to 850. Anything under 660 is generally deemed subprime.
GM Ramps Up Risky Subprime Auto Loans To Drive Sales; Taxpayers Still Own 26.5% - Investors.com