They "invest" in check cashing places and car title loan places. Now is a new twist on the loan sharking game called "buy here, pay here" used car lots. These lots supposedly help bad risk borrowers by circumventing the banks, but the banksters are involved up to their eyeballs in these schemes.
The Los Angeles Times had a good three-part series on this newest predatory practice, but true to form, most of the commenters, especially after the third installment, were bitching about how "stupid" the woman mentioned in the story was for getting a Chrysler Sebring or didn't check around for cheaper cars rather than complaining about what the story was REALLY about, and that is the new loan sharking scheme.
Here is how it works, from the article:
In this little-known but fast-growing corner of the auto market, dealers command premium prices for road-worn vehicles and finance the sales at interest rates that can top 30%.
In a kind of financial alchemy, they have found a way to turn clunkers into cash cows and make money off the least creditworthy customers: the millions of Americans who are stuck in low-paying jobs, saddled with debt and unable to qualify for conventional auto loans.
For most of those people, having a car is the only way to stay employed, and they'll accept almost any terms to get one.
Buy Here Pay Here lots sold nearly 2.4 million cars nationwide last year, up from 1.3 million a decade ago, according to CNW Marketing Research.
Link, with sidebar of links from the series and extras:
link
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