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Posted by MoparNorm on Friday, December 07, 2007 at 09:40:19 :

In Reply to: Re: Hmmm, high risk financing in the pirck-up market? posted by David Sherman on Friday, December 07, 2007 at 01:58:45 :

There is no such thing as "sub-prime" auto loans.
The "we finance everyone" loans are at 19%, just like credit cards...
Actually right this moment, Chrysler/Dodge/Jeep are having special 0% loans and 2% loans of regular time intervals, if you qualify.
While the loans are carried by Chrysler Financial, the actual cash comes from 3rd party lenders.
If the 3rd party lenders also carry mortgages and they are struggling, because of foreclosures, then, yes, eventually that source of money for car loans will dry up and effect all of the economy. That is why you see "bailout" being talked about for the sub prime market.
Bailouts are wrong, and screw up the economy in the long run, but they may prevent short term damage to the economy because of the large number of the self gratification generation who lived above their means.

For auto companies, self financing is a win-win, you sell the product and you make back any rebates or discounts, in interest....



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