Quote:
Originally Posted by Supz
It really doesnt matter. In any state. There is a maximum interest rate you can charge people. Buy here pay here is much more risk then what you are talking about here, and they can only charge STATE MAX %. I was a Finance Manager for a large auto group in South Florida. A few reasons for this are. 30% is still astranomical. It managed the interest rates so people dont get ripped off. In the beginning of financing cars. You can buy the money from the bank at 3% and sell it to the customer at 30%. You cannot do that anymore. Based on the model year of the car you can make anywhere from 3% down on the actual interest. and this is mainly on low risk loans. On higher risk loans the seller only makes 1.5-2% of the actual interest.
30% is a very very high interest rate. Almost loan shark rates. You also have to have it at a point where people are going to purchase things. Charge people 100%. They will stop buying, and no buying means no selling. No selling means no business.
There are many reasons why the government regulates interest rates and why there is a credit system. The mortgage crisis should have taught you more.
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The mortgage crisis taught me that the government regulation caused the whole thing by encouraging (forcing) lenders to make bad paper to morons with racial issues and then raped us ALL to fix it for the big guys. Hell, even the part of the bailout money that was supposed to help individuals still did nothing. My grandmother fought through a "loan modification" for FOUR YEARS and they ended up cutting her rate a quarter of a point. YaY.
To all of the morons who bought in hyper inflated markets and whine that they can't keep their 400k house while making 25k because they used some exotic financing they can't understand and didn't even read and people who bought "investment" property that doesn't cashflow and other morons who borrowed all of their "equity" out and lost their ass--- fuck them. I hate the government but they didn't force these retarded morons to do any of that shit.
Buy here pay here if done right isn't all that risky. You can get a down that is very close to what you have in the vehicle. The state limits interest because people could care less what the price/interest is- they want to know "UH WATZ DA PAYMENTZ" ..... in MO they were charging OVER 100% annual interest and morons were still hearded up in a line to buy
With title loans, 30% annual limit is insane. In most states as far as I know they're charging at least eight times that. We're in agreeance about 30% being a ridiculously high rate on an automobile purchase loan, though. Most beat on pete finance lots I've been on just charge full retail (a huge rape price on older automobiles) and "zero interest".