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Strategies & Market Trends : Value Investing
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To: Micah Lance who wrote (57760)8/13/2016 9:18:24 AM
From: robert b furman2 Recommendations

Recommended By
Jurgis Bekepuris
research1234

  Read Replies (2) of 78922
 
I cant speak for Ford but GM has tried to let no more than 5% of a model get put into rental car guaranteed depreciation programs.

That ensures that a flood of used vehicles does not reduce the residuals on that part of the fleet that gets leased.

Oem then have an obligation to buy back the vehicle at the end of the leases term.

That is what had bit them so harshly before.

Sub prime is almost always bought by a finance institution other than the OEM financing arm.

If GM financial refuses the credit (beacon score is too low or advance required too high) - they automatically forward to a subprime lender.There are tiers of subprime with in subprime. ie A buyer has good credit but has negative equity in the trade and requests too large of an advance or a person with several bankruptcies and no money down or half down.

Each lender has their scoring process witha human intervention/review often required.

I do not foresee subprime to ever be the problem that real estate was.

Foreclosure rules slowed the process in real estate.

Repo laws with autos are much faster .

There is excellent liquidity for used vehicles in auto auctions.

Experts have been calling subprime auto loans the next shoe to fall ever since 2008.

I was a dealer buying and selling autos in 2008 and there was a reduction in used values but never an illiquid moment at the auctions.

Sub prime auto loans being hawked as the next shoe to drop are false stories being made by uninformed alarmist authors. imo

Bob
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