Re:U.S. Subprime Auto Loan Losses Reach Highest Level Since ...
by jgalt212 on Tuesday March 14, 2017 @09:18AM
(#13867239)
Yes, but even at that high default rate you can make the math work. 100-31.45 X 1.15 = 78.83
so if you can sell the $31.45 worth of repo'd cars for more than $21.17 (100-78.83), you have broken even. 21.17/31.45 is 67% recovery rate. high, but doable for sure. even more so when you consider loans with 31% default rate probably have loan rates much higher than 15%
so if you can sell the $31.45 worth of repo'd cars for more than $21.17 (100-78.83), you have broken even. 21.17/31.45 is 67% recovery rate. high, but doable for sure. even more so when you consider loans with 31% default rate probably have loan rates much higher than 15%