Kevin Colby: News, culture, political blog

Now here is a real bright idea!  Subprime borrowers may now be able to get a car loan through GMAC thanks to federal bailout money, according to The Detroit News.   This is exactly what happens when your beloved government doesn’t let these companies file for bankruptcy, but instead handout billions upon billions of your hard earned income to these companies so they can make idiot decisions.

On 24 December 2008, the Federal Reserve accepted GMAC’s application to become a bank holding company in order to gain access to billions of dollars in government aid, a crucial attempt to ensure the survival of the company. GMAC is in discussions with the Federal Reserve on accessing TARP related funding to resume providing auto financing to the American consumer, as reported by the Wall Street Journal.

I guess we haven’t learned our lesson yet.  You don’t give dirtbags any type of loans!  This is like going back to the future with the lowered lending standards that got us in trouble in the first place across so many credit markets.

Applicants with credit scores of less than 620 will now be considered. Of course, if you have terrible problems with credit, it’s probably not a good idea to take on a long auto loan.

It’s clear this is happening right now because car sales were absolutely decimated last month. GM sales were down 45%; Chrysler was down 39%; Toyota was down 39%; and Honda was down 36%. The auto market overall was down an average of 37%.

So the nearly $6 billion made available by the government is being used to make loans to people who may not be able to pay them back — all in an effort to try to move cars that aren’t selling off dealer lots.

This is a really bad freaking idea.  The answer to the lack of demand for these cars is not to go to the subprime market because these people in a very short time will not be able to make the payment and these cars will be coming back through repossession.

Some interesting articles from Clark Howard’s website:

Honda, Chrysler oversupply presents hazard and opportunity

CLARKONOMICS: One common measure of an automaker’s overall health is the days’ worth of supply they like to have on their dealers’ lots.  Read the full story.

Mystery 25-cent charges on credit cards around the nation

RIP-OFF ALERT: Have you seen a suspicious charge for 25 cents on your credit card recently? If so, you’re not alone.  Read the full story.

Health insurers’ customary charges to be revamped

Since the late ’80s/early ’90s, Clark has been receiving calls from people in dispute with their health insurers about “reasonable and customary” charges. This is a tactic used by insurers to shift costs away from themselves and onto consumers.   Read the full story.

Clark Howard says that the new Honda Insight hybrid comes with wallet-friendly price tag:

Honda is preparing to roll out a new version of its Insight hybrid in April 2009 that promises to be a good investment from day one of ownership. No official word yet on the price tag, but the new Insight is expected to sell for somewhere in the range of $17,000-$19,000.

Compare that the average price tag of a new car at $27,000!

Unlike the original Insight, the redesigned model will have 4 doors and plenty of room. Some people are comparing its look to that of a second-generation Toyota Prius. Expect the new Insight to get around 41 mpg.

Will the new Insight help Honda wrestle the hybrid market back from Toyota? We’ll keep you posted…

Some interesting articles from Clark Howard’s website:

Free e-filing for all through the IRS this year

Did you know that you can prepare and e-file your income tax completely for free this year regardless of your income? Last year the IRS had strict limits on who could use free tax prep software.  Read the full story.

Honda, Chrysler oversupply presents hazard and opportunity

CLARKONOMICS: One common measure of an automaker’s overall health is the days’ worth of supply they like to have on their dealers’ lots.  Read the full story.

Clark details his bidding secrets for upcoming Las Vegas trip

Clark and his wife are about to embark on a trip to Las Vegas thanks to some cheap airfare they managed to land. Though they’ll be going on a holiday weekend, they had no trouble finding bookings at hotels.   Read the full story.