
In a Subprime Bubble for Used Cars, Borrowers Pay Sky-High Rates - timr
http://dealbook.nytimes.com/2014/07/19/in-a-subprime-bubble-for-used-cars-unfit-borrowers-pay-sky-high-rates/?_php=true&_type=blogs&hp&action=click&pgtype=Homepage&version=HpSum&module=first-column-region&region=top-news&WT.nav=top-news&_r=0
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SixSigma
> Rodney Durham stopped working in 1991 > declared bankruptcy and lives on
> Social Security. > [borrowed] $15,197 to buy a used Mitsubishi sedan. >
> topped making his loan payments ... only five months after buying > "I just
> can’t get around without my car," he said.

Far be it from me to mention it, but how did Rodney think it was going to work
?

~~~
pjc50
_“I am not sure how I got the loan,” Mr. Durham, age 60, said._

I don't think either he or the lender had any idea how it was going to work.

Subprime booms are "push" credit: there is so much capital around chasing
decreasing returns, that it's being put into riskier and riskier loans.

~~~
SixSigma
But surely there's a moment when you see

"monthly repayments: $ nnn"

and say to yourself "I can't afford that"

I'd understand it if they kept the monthly fee down to something small but
charged enough interest that he was paying for the rest of his life, which is
how a lot of property loans were structured.

