AutoWeek reports: Bad credit? No Problem. Ugh. We mean, woohoo! Free Fords! Hell, if you can get a Ford Fusion for no-interest loan for 72 months, do it. You'll be sick of it by then, but, hell, the loan was free.
How in the world is this really going to help Ford? Folks who can't qualify for loans in the first place probably aren't going to be able to pay the monthly car payment, either. And we bet they aren't the type of folks who take care of the thing, either.
And who gets screwed when these folks just stop paying? Ford? Ford's shareholders? Dealers? Who?
Mitsubishi went through this a few years with disastrous results. They sold a lot of cars to young kids who could not afford them. It's a desperate, dumb idea.
Posted by: Bill Daly | Sunday, August 27, 2006 at 10:49 AM
Who gets screwed?
1. Ford Motor Credit, either by holding about to be worthless paper OR by selling that paper at a deep discount to banks.
2. Ford car owners through resale value when the repossessed cars hit the market in a few years (hell, maybe months if Mr. Recession pays a visit).
3. Ford Motor since the profit from its credit arm has kept the company "profitable".
4. FoMoCo shareholders. See #3. Dividends won't be any big deal either.
Posted by: Steve | Friday, August 25, 2006 at 12:20 PM