Subprime Auto Lending Soars As Fed Report Shows Spike In Loans To Underqualified Borrowers

[drray23]

1. the thing is most people need a car to go to work

So, even if they have bad credit scores they need to be able to buy a car. Those companies are not in as bad as spot as the banks who were making mortgage loans to unqualified borrowers. At worst, they repossess the car and lose very little. The problem is more on the customer side where they are gouged with high interest rates.
Now, if I understand correctly what they did here is a bit more worrisome. They packaged these loans into derivative instrument and sold that. This may impede the ability of the investors to recoup the money if the loan goes south.