Bling Bling

From CBS5: Auto Loan Defaults Newest Financial Meltdown.

According to Power Information Network, 1.85 of the 9.6 million customers in 2006 who leased or financed a new car were subprime borrowers or consumers with weak credit.

Vivian Snyder has strong credit and is not classified as subprime, but she is one of many consumers who can't afford the car she leased. Snyder drives a brand new convertible BMW with a MSRP listed at approximately $100,000.

Most consumers can't afford it, and neither can Vivian. That's because the monthly lease payment is $1,300. It eats up half her income which is a $2,500 disability check.

But, it's bling, baby, bling!

She got it at BMW of Fremont without showing a drivers license, pay stub, or any proof of income.

How did this happen? Apparently, her income was inflated by nearly 150%.

Vivian has only a few options. She can plead with the finance company to release her from the lease or have the car repossessed, losing her good credit and a $30,000 down payment which consisted of her entire retirement savings.

She cashed out her "entire" retirement for a depreciating object; a glorified metal cage that gets you from Point A to Point B. Even if the income were not inflated, this is lunacy. The people who can afford a $100K car don't need financing; if you need financing, you can't afford a $100K car.

It's really freakin' extraordinary, isn't it? This is basic decision making. Cashing retirement for bling car = bad.

There is something really really wrong with people, and all that this bubble has done is reveal the rot underneath that was always present.

But, it's all good, baby, it's all good!