Investing General Discussion

Jysin

Jysin

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Jysin

Jysin

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Wtf is used car equity?

That particular demographic certainly has upside down car payments.
 
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Sanrith Descartes

Sanrith Descartes

Its all the Joos' fault. Am I doing this right?
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Jysin said:
Wtf is used car equity?

That particular demographic certainly has upside down car payments.
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Read it. They will even do this on cars that aren't paid off yet.

"lets people with terrible credit scores tap into the equity in their depreciating used cars at a 30% interest rate - even if it's not paid off - in which case the entire auto loan is transferred). "
 
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Fucker

Fucker

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Jysin said:
Wtf is used car equity?

That particular demographic certainly has upside down car payments.
Click to expand...
This is a title loan with the extra baggage of allowing collateral that the borrower does not own. I don't know how they expect to monetize that. It's one thing to do a title loan on a vehicle the borrower owns, but doing a loan on a vehicle owned by another bank is 100% going to end in tears.

Title loans themselves are redneck financial misadventures, and this has several layers of risk piled on top of it.

I guess Cuban has a fetish for clapped out old Nissans, because that's all he is going to end up with out of this.
 
Sanrith Descartes

Sanrith Descartes

Its all the Joos' fault. Am I doing this right?
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Fucker said:
This is a title loan with the extra baggage of allowing collateral that the borrower does not own. I don't know how they expect to monetize that. It's one thing to do a title loan on a vehicle the borrower owns, but doing a loan on a vehicle owned by another bank is 100% going to end in tears.

Title loans themselves are redneck financial misadventures, and this has several layers of risk piled on top of it.

I guess Cuban has a fetish for clapped out old Nissans, because that's all he is going to end up with out of this.
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30% APR is how they monetize it. Just need enough people who pay it to cancel out the ones that don't. Wait till Shaniqua doesn't pay and they take her tricked out Escalade to cover the $5k she borrowed against it.
 
Fucker

Fucker

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Sanrith Descartes said:
30% APR is how they monetize it. Just need enough people who pay it to cancel out the ones that don't. Wait till Shaniqua doesn't pay and they take her tricked out Escalade to cover the $5k she borrowed against it.
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I know how it all works, but it is a bonehead idea for a lot of reasons. They will also be buying notes off of what will primarily be BHPH lots, which are already wildly overpriced. They will be getting collateral that is not worth anything close to what they are loaning on. And then the issue of collecting, repairing, and selling the vehicles they will end up with. I know their goal is to make money off the credit cards, but their customer base doesn't operate that way.

All this risk before they even get to the borrowers themselves, which are mega high risk and have a very high % of skipping out on loans. BHPH lots make their money off of down payments and a few months worth of payments. Their business plan is to repossess and resale those cars.

They are going to lose their asses on this.
 
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Sanrith Descartes

Sanrith Descartes

Its all the Joos' fault. Am I doing this right?
<Gold Donor>
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Fucker said:
I know how it all works, but it is a bonehead idea for a lot of reasons. They will also be buying notes off of what will primarily be BHPH lots, which are already wildly overpriced. They will be getting collateral that is not worth anything close to what they are loaning on. And then the issue of collecting, repairing, and selling the vehicles they will end up with. I know their goal is to make money off the credit cards, but their customer base doesn't operate that way.

All this risk before they even get to the borrowers themselves, which are mega high risk and have a very high % of skipping out on loans. BHPH lots make their money off of down payments and a few months worth of payments. Their business plan is to repossess and resale those cars.

They are going to lose their asses on this.
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Oh I agree on all points. I just find it funny.
 
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