The company, for example, expects a 72 percent collection rate on loans made in 2014 — the year
that a used 2009 Volkswagen Tiguan was repossessed from Nina Lysloff of Ypsilanti, Mich.
Ms. Lysloff could have bought a brand-new Volkswagen Tiguan for $22,149, according to Kelley Blue Book.
For millions of Americans like Ms. Harris who have shaky credit
and had to turn to subprime auto loans with high interest rates and hefty fees to buy a car, there is no getting out.
Ms. Harris’s predicament goes a long way toward explaining how lenders, working hand in hand with auto dealers,
have made billions of dollars extending high-interest loans to Americans on the financial margins.
The Car Was Repossessed, but the Debt Remains -
By JESSICA SILVER-GREENBERG and MICHAEL CORKERYJUNE 18, 2017
Her auto lender took her to court and won the right to seize a portion of her income to cover her debt.
Subprime lenders are willing to take a chance on these risky borrowers because when they default, the lenders can repossess their cars
and persuade judges in 46 states to give them the power to seize borrowers’ paychecks to cover the balance of the car loan.
The reason: Unable to recover the balance of the loans by repossessing
and reselling the cars, some subprime lenders are aggressively suing borrowers to collect what remains — even 13 years later.