I am helping someone out who bought a very modest car and the car sales sold it to her with a loan of 24% (which is – I think – outrageous.) 24%!!!!
The person who bought the car is a brand new citizen (just passed the exam two months ago.) In digging deeper (since I am trying to help her out), I found out the car people right away sold the loan to a RECOGNIZABLE BANK — one that has ads running on TV in this area about how great they are. I don’t think they are so great! You would also recognize this bank’s spokesperson (and I think the spokesperson would be scandalized if he knew about this practice.)
I think the bank execs are creeps and I think they are using this car sales place as a front to get these high interest loans. In the original car loan contract with the car sales people, it says that they have the right to sell it to this particular bank — so this bank is up to its eyeballs in this high interest loan. They won’t do it upfront themselves so that they look bad – so they get someone else to do it. The bank probably borrows itself at 2% and then lends it at 24%.
This is not about risk — this is about being predatory. If it is not predatory, it is at least indecent. We currently have the lowest interest rates in decades! I am all for making money but there are limits (decency) in my mind.
I am not finished with this…I am investigating further and if this is really slimy as I suspect, I am going to name names (and if I think it a legal violation), I will refer it to someone in the Maryland state government to investigate.
PS – if you know of a similar situation, let me know…post it here.