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General Motors Company Message Board

  • iffydog iffydog Nov 20, 2012 7:51 PM Flag

    GM recovery is built on sub-prime lending


    10-Q financial report shows how GM is to increase sub-prime loans. to increase sales.Total of loans rose from 87% of total loans in Q4 2010 To 93% subprime loans in 2012. From 2009 tp 2012 GM sub-prime loans has risen 180% Prime loans above 660 dropped 42% RE-PO MAN IS COMING. Cashless DUMBER THAN DUMB GM is approving sub-prime loans as low as 300.

    Sentiment: Strong Sell

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    • You should really be careful about quoting statistics you clearly don't understand. Let me give you some background. After emergence from bankruptcy in 2009, GM virtually had no ability to offer sub prime loans as every other car maker does. I recently read that Honda uses about 20% of their financing that is sub prime. To be competitive with their rivals, GM purchased AmeriCredit in October, 2010.

      Although I still couldn't find the source of your data, it doesn't surprise me that sub prime loans might be up 180% from 2009 since they didn't have any ability to offer them then and they do now.

      In the first 9 months of this year, loans from GM Financial to customers over FICO 660 went from $756 million down to $520 million. That represents a 31% drop, closest I can get to your 42%.

      You do understand that GM Financial only represents about 8% of GM total financing, right? In fact they are specialists ONLY in sub prime, I'm surprised they do any normal risk financing at all. That $520 million is only 5% of their total. Virtually all of GM's normal customer financing is done by Ally Bank (of which GM owns less than 10% so you won't find it on any of their consolidated financial statements) and represents the other 92% of customer financing.

      Your comments about GM Finance are immaterial. I hope this helps you understand a bit better.

      If your objective is to mislead and be obnoxious, you may fool some people who don't know any better. But for anyone that matters, you only look foolish.

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