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Weird, but makes sense.
http://blog.wired.com/cars/2007/08/study-claims-th.html
As the world's stock markets fret and swoon over tightening credit, car buyers might take a pop in the nose from a different source. "Household Credit Usage," a clumsy title for a forthcoming book from Palgrave MacMillan, argues that the interest rates charged for car loans should be adjusted for the car purchased. The book studied some 7,000 loans from a single bank made from 1998 through 2003. It found that Saturn buyers were 22 times more likely to default on their loans than were Toyota buyers. In fact, loans secured for Japanese cars in general were 56 percent less likely to go into default than loans for American cars. Loans for European cars were 50 percent less likely. Brent Ambrose, a professor at Penn State's Smeal College of Business and lead author of the study, argues that loans for American cars should have significantly higher interest rates to compensate for the higher default risk. And American car makers that offer their own financing should raise prices on their automobiles to pay for these risks. Of course, that means that if you pay cash for your Saturn, you'd be underwriting the deadbeats.
Source: BusinessWeek
Read More
http://blog.wired.com/cars/2007/08/study-claims-th.html
As the world's stock markets fret and swoon over tightening credit, car buyers might take a pop in the nose from a different source. "Household Credit Usage," a clumsy title for a forthcoming book from Palgrave MacMillan, argues that the interest rates charged for car loans should be adjusted for the car purchased. The book studied some 7,000 loans from a single bank made from 1998 through 2003. It found that Saturn buyers were 22 times more likely to default on their loans than were Toyota buyers. In fact, loans secured for Japanese cars in general were 56 percent less likely to go into default than loans for American cars. Loans for European cars were 50 percent less likely. Brent Ambrose, a professor at Penn State's Smeal College of Business and lead author of the study, argues that loans for American cars should have significantly higher interest rates to compensate for the higher default risk. And American car makers that offer their own financing should raise prices on their automobiles to pay for these risks. Of course, that means that if you pay cash for your Saturn, you'd be underwriting the deadbeats.
Source: BusinessWeek
Read More
