Monday, May 19, 2008

"This information is not separately disclosed as it once was. We consider the details about what you are inquiring confidential information."

Scotia bank, which purchased Travelers Leasing Corp. last year and rebranded the auto financing company Scotia Dealer Advantage, is equally mum on such details.

Chief Executive Officer Jim Case of the subsidiary will only say the loans are "designed to help people improve their credit."

Wells Fargo reported in January it charged off $1 billion in auto loans in North America in 2007, compared to $857 million in 2006. But it won't say how many loans were in delinquency.

Canadian statistics on car repossessions are not available, but numbers in the United States show an upward trend line.

Atlanta-based Manheim Consulting, a wholesale car auction operation, predicts a 10 per cent rise in car repossessions in 2008, after growing by 10 per cent last year. The auction house blames overly generous auto loans as a key factor in driving up the numbers.

Monty Loree, the Regina-based founder of the online forum Canadian-money- advisor.ca, says financial literacy is key to solving the sub-prime lending problem. Even though these companies "make it easy to get money," consumers must resist the pull to purchase.

"If you don't have the cash, don't buy it. If people have bad credit, rebuild your credit first, and save up a cash reserve."

It might be sage advice, but there are plenty of customers out there.

When Bouclin sold the minivan back to an Ottawa dealership a few weeks ago, he inquired about the car's fate.

"They turned it around to lease it on a sub-prime basis at 18.5 per cent to some other poor sap and the story goes on."

Source : http://www.canada.com/topics/news