As Inventor of Subprime Car Loans Exits, Critics Smell a Lemon - Bloomberg
... In the portfolio program, when a cash-strapped customer wants to buy a car, Credit Acceptance will advance the dealer about 40 percent of the total value of the loan. That is typically enough to cover the cost of the car to the dealer plus a small profit. Once that part has been repaid, Credit Acceptance shares any remaining payments with the dealer. The company is shielded from much of the credit risk, because its advance is secured by the car. It can repossess the vehicle while pursuing the defaulting customer in court....
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