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Helpful or Hurtful?

By Brian | October 28, 2008 | Share on Facebook

My wife and I leased a car a few months ago.  I just received this e-mail from the dealership:

Dearest Clients, Friends and Family,

The best of times is now! Although many other manufacturers have closed their doors to leasing and tightened up on financing, we at V.I.P Honda are progressing forward with very aggressive financing and leasing opportunities. Whereas many of our competitors require the best of credit scores, 720 or more, for a deal to be considered, we are still able to work on a wide range of credit scores ranging from 580 and up!

We at V.I.P Honda understand, even in our current economic state, that life must still go on. We are not letting the current scenario effect us. Don’t let it effect you. Fantastic Finance and Lease deals are occurring daily. Honda’s reputation for fuel efficiency, reliability and low cost of maintenance will only bring you further savings down the road.

If you do not have the best of credit scores, do not worry! We are here to help you in every way possible. Our experienced Business Management team is here for you to assist you with examining all available options. V.I.P Honda has been in the neighborhood for over 3 successful decades. Use our experience to your advantage. Let us help you drive a new or pre-owned vehicle home today!

If you would like to schedule a consultation appointment, please feel free to reply to this email directly or reach me at 908-753-1500. Either I or one my associates will always be here to answer during business hours. I sincerely hope to hear from you soon!

So, decision time: is this a good thing or a bad thing? If your credit is 580 and these guys lease you a car at 6% interest for three years, what are the chances you won’t be able to pay the bill? Do they care? Should they be offering such a deal? At the very least, should they be bragging about the fact that they’re willing to loan money to people that have had trouble paying back loans in the past?

In the midst of a financial crisis, it’s easy to look back and yell “Greed!” and “Corruption!” But when you see it in action, the line gets more grey…

Your thoughts, everyone?

Topics: Money Talk | 3 Comments »

3 Responses to “Helpful or Hurtful?”

  1. Ilya says at October 29th, 2008 at 7:27 am :
    As you did a good job explaining earlier, Brian, insolvency among real estate borrowers has been largely precipitated by the falling house prices, as mortgages become increasingly larger than the value of the properties. I’m pretty sure that it’s a somewhat different equation when it comes to autos. If every component of the lending chain involved in this “offer” evaluates their risks properly – and I can’t imagine any financial institution today not doing that – then it is quite possible that they feel it warranted to be able to extend credit to people with less than stellar credit history.

    It might play into further credit markets troubles or it might help un-freeze lending. You can never say which on a small local scale. As much as my instinct tells me to call them stupid, I’d rather cheer a sign that someone somewhere can still do business, as opposed to being completely closed off. If anything, it gives me a better chance of finding reasonable credit upon my re-entry into US economy, with my own pretty good credit history.

  2. Brian says at October 30th, 2008 at 2:13 pm :
    That’s a good point, Ilya. Technically, if one got in trouble with a car loan/lease, one could sell the car and typically pay back the loan, so if the collateral supports the loan amount, the risk is much less. Also, losing your car and losing your house, while both disruptive, are not on the same level.

    That said, predatory lending is in the spotlight right now, and when someone brazenly engages in mass advertising for cut-rate loans, that comes a bit close to the line (IMHO)

  3. Rizzo says at October 31st, 2008 at 1:47 pm :
    Hey Brian!

    A few months ago, here…
    http://www.familygreenberg.com/index2.php/2008/07/cool-t-shirts/

    I posted on your blog and offered to send you a coupon code to my new t-shirt website, RizzoTees.com, once it was up and running. My site went live yesterday! Have a look at http://www.RizzoTees.com .

    As promised, if you’re interested in purchasing anything, the coupon code 3JBEE84C will save you 20% off the cost of the shirts. The code expires on 12/31/08. You may share that code with anyone you like, as it will work more than once. If you have any feedback on my site that you’d like to share, I’d love to hear what you think.

    Sorry to spam your car posting here – it appeared to be the best way to contact you.

    Thanks Brian! Happy Halloween!

    Best to you,
    Rizzo

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