No matter how bad the taste in your mouth is after you say sub-prime lending, America needs to see a higher number of people with risky credit getting second chance loans. No one bumped their head before writing this article. Here is why a surge in sub-prime loans will fuel the economy in the short term.
One, the supply side troubles that many Japanese automakers have been experiencing since the tsunami there has caused a drastic shortage of their models. A large number of buyers are waiting for that shortage to correct itself, which could be close to the end of the year, at the earliest. Two, many people who were laid off during the recent financial crisis have returned to work, but have been through repossessions and bankruptcy. Third, slow sales through the summer could stop or reverse the economic recovery across the nation.
No one is advocating a return to the practices that approved people for home loans that accounted for more than half of their take home pay. Short term bad credit car loans at a slightly higher interest rate will increase profits and keep the economic wheels turning.