A couple weeks back, news broke that Wells Fargo execs had been accused in a lawsuit of being well aware—since at least 2012—that the bank was improperly charging thousands of customers for auto insurance they didn’t need. We covered the story earlier this month, but after finally getting through the 111-page complaint unsealed by a federal judge, it’s worth peeling off some of the particularly glaring excerpts to underscore, if the claims are true, the bank’s scummy conduct here. A quick recap: In the summer of 2017, Wells came clean—in response to a report from The New York Times—that it had forced around 800,000 people to pay for insurance they didn’t need to go with their car loans. The problems with forcing customers to buy “collateral protection insurance,” or CPI, that they didn’t need were obvious. More than 25,000 people, for example, had their car wrongly repossessed. (CPI covers damage to the insured … [Read more...] about The Scummiest Allegations That Wells Fargo’s Execs Knew Its Auto Insurance Program Was A Mess
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When Don Foss started his career as a car salesman, he recognized early on that most of his prospective customers had shaky credit, leaving them with few options for financing to buy a vehicle. So in 1972, he started subprime auto lending company Credit Acceptance Corporation to fill that void. He knew lending money to buyers with low credit posed an inherent risk, and he knew the business couldn’t solely be focused on closing sales. It had to excel at collecting loan payments too. “I began to realize that, even as I worked as hard as I possibly could at selling cars, we would have to do better on the collections side,” Foss said in 2009, reflecting on how he’d managed to grow and sustain a business that had provided financing to low-credit car buyers for nearly 40 years. It certainly ended well for Foss, who stepped down last year, netting $128 million upon retirement by selling off his company shares. Indeed, over time, the collections side of the business has … [Read more...] about How Credit Acceptance Consumed Detroit With Debt
The Morning Shift All your daily car news in one convenient place. Isn't your time more important? Pickup trucks are shockingly expensive, the Tesla Model 3 is selling well, oil prices are creeping up and more. This is The Morning Shift for Thursday, Oct. 4, 2018. 1st Gear: Luxury Trucking You’re not imagining it. Pickup trucks are steadily getting larger—and more expensive. Because gas is cheap, pickups are in demand, which boosts pickup prices. The whole thing is getting a little out of control. An excellent story in the Detroit Free Press today revealed an alarming climb of pickup truck prices in recent years. From the story: The prices people are paying for pickups have steadily risen over the past decade pushing the trucks further and further out of reach for average consumers. In fact, some full-size pickups can cost more than $100,000. Edmunds’ data shows, through September, the average transaction price for a full-size pickup is $48,377, a 48-percent … [Read more...] about The Prices of Pickup Trucks Are Too Damn High
Richard Parker locked down a job at a Ford plant in the Detroit area, and, like most residents of the region, needed a car to get to work. It was 1991, and at the time he had shaky credit, so it was plenty difficult finding a company willing to lend him money for the purchase. That changed with Credit Acceptance Corporation, one of the largest subprime auto lenders in the U.S. But he never imagined he’d spend the next two decades paying for it. In May of that year, Parker went to a dealership owned by Credit Acceptance’s founder, Don Foss, in Redford, a Detroit suburb that borders the city’s west side. After talking it over, a salesperson at the dealership scratched out an agreement for Parker to purchase a grey 1988 Chevy Blazer for $16,000. Parker put $3,390 down up front; Credit Acceptance agreed to finance a $9,198 loan at 22 percent interest, meaning Parker would have to pay about $3,500 in additional finance charges over the life of the 36-month loan. The … [Read more...] about The Car Loans That Never Die
As Jalopnik’s resident car buying expert and professional car shopper, I get emails. Lots of emails. Sometimes folks get into a tough spot or don’t know what to do, so I’ve decided to pick a few questions and try to help out. Let’s see what we have on deck for this week: I’m shopping for a new Honda Accord Sport 2.0T and I got an offer that was way less than all the other stores. No one was willing to match it and they all claimed this dealer was playing games. It turns out this car has 107 miles on it, but I feel like I got a good deal. Is that too many miles for a brand new car to have? Did I really buy a used car? As you have found out the concept of a “new car” isn’t the same for every vehicle. Some folks insist on having something with as few miles as possible. Though almost every new car has a handful of miles on them from transportation and dealer prep. However, some cars on the lot tend to rack up more miles than others. In … [Read more...] about Can a Dealer Sell a Car as ‘New’ If It Has Over 100 Miles On It?