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Subprime Loans Are Back: More Cars for People Who Can’t Afford Them

July 24th, 2012

Subprime car loans

Maybe we didn’t learn our lesson the first time around.

Maybe lending to people who represent a large credit risk is just the American way. Maybe we’ll just keep cycling through economic ups and downs, recessions and recovery, because we can’t seem to understand that building a recovery on shaky credit will never end well.

People need cars, though, and sometimes they just don’t have those perfect 800 credit scores (or even a reasonably healthy 650) to open a credit account and secure a loan for a pricey new or used car. Of course, it would be better if someone just saved up cash, searched the CarGurus used listings and bought the car that was priced right. Instead, they gobble up offers by banks to finance a $20,000 car when buying a $5,000 car for cash would make more financial sense.

A story at The Detroit News had this scary quote:

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