Don’t fall for subprime car loans!
By: Darrell Castle
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Hello, this is Darrell Castle. I’m an attorney licensed to practice law in the state of Tennessee and on this video today, I’m talking about an article that appeared on the front page of the New York Times last Sunday.
This article was about subprime loans for automobiles. That’s right – automobiles. This time not houses like a few years ago. And this New York Times article talked about how hundreds of thousands of people are getting auto loans when they do not have the credit score to support it, and quite often they don’t have the income to support it either.
These subprime loans being given to people have increased 130% according to the New York Times. And at the same time this 130% increase has occurred, quite often these loans are for two to three times the real value of the car and at interest rates exceeding 23%. This drives the cost of the car – the monthly payment for you the borrower – up beyond the point you can afford and it is inevitable that it will lead to a repossession.
Why would someone make you a loan that leads to inevitable repossession? Well because they don’t care. This is their game – they don’t care about your loan because the dealer simply goes out and repossesses the car and sells it to someone else in the same manner.
The bank doesn’t care because they’ve already bundled your loan with other loans into a deriviativepackage, which is then sold to other banks.
You remember all of that from a few years ago when all of the homes were in foreclosure and nobody knew who owned what. It’s the same way for the auto world today.
Don’t be suckered into these things, folks. They take your car and sell it to someone else, and then package your loan into a derivative. That’s their game. But you don’t have to play that game; you can play a different game. And what would that be?
Well, get out of debt. That’s my advice to you. Don’t be suckered in by the allure of easy credit that you can’t afford. When your car is repossessed, your credit goes back to the bottom and the whole thing starts all over again. Don’t play that game.
Get out of debt. Consider filing for bankruptcy to clear your debts and protect you from the creditors. And at the same time when it is finished, you can take a credit rebuilding course to rebuild your credit and start fresh.