The United States government is providing $1.5 billion in loans to the financing arm of Chrysler to help it make car loans.What? I understand that the credit markets are tight and that's making it tough for people with marginal credit scores to get car loans but here's the reality: People with marginal credit scores shouldn't be able to get new car loans.
There are plenty of used cars out there, and it's not in the long-term best interests of consumers to allow them to have large monthly payments on new cars that they don't need.
Recently GMAC relaxed its lending standards with the help of Treasury Department funds but as I wrote at the time, the standards were really not that outrageously high before the government aid. Of course lower standards are great for the industry because they'll spur sales, but at what cost to the financial health of working Americans?
Every personal finance expert on the planet will tell you that car loans because you can't afford to pay cash are bad news, and it's disappointing that our elected officials are providing the dry powder to let consumers get themselves in over their heads.
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Reader Comments (Page 1 of 1)
1-16-2009 @ 4:38PM
Miguel said...
Couldn't agree more.
1-16-2009 @ 6:14PM
George said...
I some cases I would have to say this is right,BUT there are some of us out here that do pay there bills and there car loans. I will also say I have put off some of my C cards off , but I pay my Home loan and car loans on time. You have to have both. A place to live and a means to get there
1-16-2009 @ 11:09PM
dtxt4u said...
Chrysler huh . . .is this the same company who could care less about the thousands of cars that have 2.7 engines in them that failed and they refused to even acknowledge this problem exists. . . well maybe i should ask for a bailout for the $5188.00 that I had to finance to get another engine put in my Concorde. . . they didnt care about us, so guess what . . . . .what goes around comes around. . we (consumers) make you, you dont make us . . . When you suffer you seek help, but say screw the lil man. . .How dare the Government not make them accountable for the engine prob, yet make us again accountable for them not caring . . THANKS SAM.
1-17-2009 @ 6:56AM
Marlyss said...
So what you are saying is, people who work but may not have the best credit don't deserve new cars? Or all new cars are priced $40,000. and up? I also believe that most people need loans to buy used cars. Or should they just buy a$1oo car and spend the money that they are saving by not making car payments on constant repair of the junker they bought? Your opinion is a downer for our country trying to get back on its feet.