With all the losses that GM Ford And Dodge have taken they seem to drop the prices on their vehicles why cant they make it a bit easier for a first time buyer to acquire a truck car or someone with BAD credit or worse no credit score because there millions of people who would like a new relaible vehicle.
2007-05-20 13:24:28 · 9 answers · asked by sebio 1 in Cars & Transportation ➔ Buying & Selling
you would have to ask the finance companies that question not GM, ford or chrysler, would you lend someone money that you knew was not going to pay you back?
2007-05-20 13:29:40 · answer #1 · answered by mister ss 7 · 3⤊ 0⤋
I am currently an accounting student, it is a money thing. I will most definately explain it to you.
Dodge and General Motors are a corporation. Corporations are large businesses. Any type of business is all about providing a product to people and making money.
In the eyes of a business, a person with bad credit, or no credit, is a person who will not make them their money.
Basically, they see these people as unreliable because, Dodge and General Motors will be providing the product, but the chances of them making money will be very low.
You receive bad credit scores by making late payments or by making no payments at all to creditors. Therefore you may not be able to make the payments of a car.
Do not forget, when a transaction is about to take place between a business and another business or even another person/group of people, the business may be able to do background credit checks on the person that the transaction pertains to. This is what the deal is all based on.
Even if a business is losing money, they are better off filing for business bankruptcy rather than selling a product to an individual/business and receiving no cash in return.
They spend money making and distributing the product, but will receive nothing in return.
When a corporation receives no payment or not the full amount of a product provided that is to be paid, the corporation is only eligible to receive a tax credit for the money lost. This would be known as money lost during operations. The corporations will lose more money if they provide a product without compensation, rather than just losing money in general.
Lastly, if they did follow through with such a plan and people did not pay or made late payments, the corporations would most likely be caused to repo the vehicles. This too would in turn,cost the company numerous amounts of money.
That is why Dodge and General Motors choose not to help people out who have bad or no credit score.
As the cliche goes, it's nothing personal, it's just business.
2007-05-20 13:40:57 · answer #2 · answered by βread⊆ℜumbs™ 5 · 1⤊ 1⤋
Well, first of all automakers don't finance car purchases except when they're offering "special incentive" rates, which are only for people with excellent credit anyway.
Secondly, people have bad credit scores for a reason -- they're either late paying back loans, or don't pay them back at all. People with no credit score are a total unknown -- so again, they are risky. If you were in the business of lending money, would YOU lend to these groups? Perhaps, but only at a high interest rate (risk vs. reward), because chances are a good chunk of these people will default.
Thirdly, it is NOT hard to get a car loan. In fact, I think getting credit is entirely too easy in this country. If you really want to buy something, do it the old fashioned way -- save up and buy it in cash.
2007-05-20 17:41:44 · answer #3 · answered by nevergonnaletyoudown 4 · 0⤊ 0⤋
Yeah if your struggling on making money - as a business the last thing you would want to do is open it up to LOSE more money with people that don't make payments. Also the other person is right, it's the finance company not the actual automaker that is most concerned about it - and they are a separate entity and of course they don't want to lose money either. You would be surprised what the numbers come out to be with people with bad credit. It's not fair the ones where it wasn't their fault but thats life :(
2007-05-20 13:34:51 · answer #4 · answered by Lustral 2 · 1⤊ 0⤋
There is usually a good reason why a person has bad credit... they don't pay their bills. Would you loan $500 to a person you didn't know and bad history of paying bills. No I wouldn't think so.
2007-05-20 13:36:43 · answer #5 · answered by Jeremy G 4 · 1⤊ 0⤋
And how would it benefit a company to sell cars to people who aren't going to pay for them?
This is a business, not a charity.
2007-05-20 13:33:28 · answer #6 · answered by peg4cda 5 · 1⤊ 0⤋
Mitsubishi did that some years ago, and it was a lot of trouble. They had to repo thousands of cars.
2007-05-20 13:29:09 · answer #7 · answered by wazup1971 6 · 2⤊ 0⤋
Just because someone wants a car, doesn't mean they deserve it.
2007-05-20 13:33:03 · answer #8 · answered by Eric P 2 · 2⤊ 0⤋
They need reliable payment people.
2007-05-20 13:28:32 · answer #9 · answered by (A) 7 · 1⤊ 0⤋