Wednesday, October 15, 2008

We Spend Too Much On Cars Anyway

Shouldn't *strategic support* imply actual lending?

From Bloomberg,

GMAC said yesterday it's granting financing only to buyers with scores of at least 700, who represent about 58 percent of U.S. consumers.

A credit score of 700?

I just ran mine a few months ago on one of those free sites. It came it at a mere 690.

Meanwhile, my landlord owes $4,000,000 on four upside-down homes, has no income, has been audited recently (resulting in a 20k fine), and yet his credit score is something like 730.

I have no debt whatsoever - no student loans, no car payments, no mortgage, and nothing on the credit cards.

But my landlord told me he keeps a $5,000 balance on his American Express card and makes slightly-more-than-minimum monthly payments. He told me this was all that was needed to *manufacture* a healthy credit score.

So today he could get an car loan from GMAC while I couldn't.

If any of y'all can't lease your usual fancy new car, remember you can always plunk down a grand or two for a clunker.

Even though the system of credit scoring is a joke, this *credit tightening* has got to be disaster for the owners of GM car dealerships.

Yeah, GMAC's doing real well these days. Must be that star-studded Bear Stearns team they brought in...


Funny Circus Bears said...

So then why am I perversely drawn to go long GM?

CaptiousNut said...

If oil dumps (some more) you'll get a tradeable short term bounce, for sure.