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Tuesday, May 25, 2010

UPDATE: On automotive credit

Last Wednesday, I shared a story about the possibility that General Motors, for one, is considering getting back into the banking business, in order to facilitate more loans to sub-prime borrowers. This, in the interest of selling more cars than GM could without access to those buyers. (See "A return to sub-prime," from May 19.)

Today, there are conflicting sentiments in a single edition of Automotive Digest. First, there is a "staff meeting video" which suggests, like the story mentioned above, that lenders are making more money available to borrowers with sub-prime credit. Click here to go to the AIN Video featuring Melinda Zabritski from Experian.

Later in the same Automotive Digest, another story comes from the Detroit Free Press, suggesting that car loans will not be easy to come by, according to J.D. Power. Click here to see the story.

Implications: Conflicting stories like this illustrate the unsettled landscape that can be left in the wake of a recession, whether a recovery is underway or not. If you're a consumer and saw both of these stories, which one might you be inclined to agree with?

If you're an auto dealer, do you dare leave that conclusion to chance, or should you be reinforcing that status of credit availability and services you're willing to provide?

Mike Anderson

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