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Auto Lending: Last Week Tonight with John Oliver

JamieS

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Oct 12, 2011
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I love John Oliver's show, so I found it especially interesting when I watched him discussing Subprime lending on his show last night. Here is the piece in case you missed it:



The whole thing reminds me of the first time a BHPH dealer explained to me his business model back in my Trader Publishing days and the reaction of Oliver is pretty close to the one I had then. But definitely eyebrow raising to hear the comparison to the mortgage loans of the recent past. I was not a homeowner then as the prices of the houses were insanely over inflated and I decided to rent for a couple years, meaning, I have to somewhat embarrassingly admit here, I did not fully grasp the details of the collapse literally until I watched The Big Short. After watching that movie I was blown away by it all. How do you see this affecting your dealer if at all?
 
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My issue with this particular rant is that it identified problems, but offered zero solutions. Would John Oliver prefer bad credit risk Americans not be allowed to buy a car? His attack on the industry seemed so scattered that it became confusing.

Yes, it sucks that these people need a car and they have terrible credit. My advice would be to stop trying to live above your means; not to blame the industry that was created to solve your problems. (Or, maybe he was attacking the market created to solve the problem of what to do with all these subprime loans. Either way, the only "solution" would be to stop allowing people with bad credit to buy cars.)

Anyone can identify problems; finding solutions and executing requires work... but, identifying problems, and then shouting these problems at America with a British accent somehow provides credibility.

On a final note, the comparison to the housing crisis is actually laughable, because when those assets (the homes) depreciated, they destroyed the value of everyone's home. When/if the bubble on the subprime auto loans bursts, the already-depreciated assets (the cars) will be repossessed by the lenders, and this will have almost zero impact on the value of my vehicles.
 
John Oliver has become more and more slanted as this election season rolls on. I used to love his show.
He panders to the fatalist generation that wants to see the corruption of the system, but he rarely offers solutions.
He's doing his best Stephen Colbert while Colbert's show tanks in the ratings.

I agree with everything @Stauning said.
I've seen numerous pieces by him that are factually inaccurate as well - he just reads the notes his team of writers gives him.
 
What really irked me about this piece is that the bulk of the stories he referenced were from many years ago. For example, the story about the $3k car a lady bought with service contracts and other adds for 9k which payments would total over $13k if she made the minimum payment for the term of the loan was from 2007.
 
In my opinion, the issue is Wall Street. I personally don't have a problem with the segment as it was largely geared toward BHPH, and that is an industry that could use a little conscience. I know, the risk is just so high. However, the majority of the BHPH deals that I see are such that the customer is absolutely set up to fail.

I don't know how accurate the information was or wasn't and don't really care. I thought that there were some good points made.