"First, they are planning on providing 5-year, zero interest loans on some of the slowest selling cars from the 2008 and 2009 product lines. Essentially, all the time that sales have been slowing, they kept on producing cars and were increasing inventory to record levels. Now with this new lending facility, they have been given the ability to sell those cars with FREE loans from money provided by you and me. That is what I call a bad investment.
But wait, there is more! Not only are we giving money away in the form of FREE loans, GMAC has decided that lowering the lending standards will be a real benefit to GM's bottom line.
'Credit is the lifeblood of the auto industry, both for consumers at the retail level and dealers at the wholesale level,' says Annette Sykora, NADA chairman and owner of two domestic-brand dealerships near Lubbock, Texas. 'Lowering minimum credit scores from 700 to 621 will expand credit availability to thousands of potential car buyers and further increase consumer confidence at this critical time in the auto industry.'
Wasn't this the same kind of lending practices that got us all into big trouble in the first place?"
© 2005-2008 Stephen Clarke-Willson, Ph.D. - All Rights Reserved.