Author Topic: Does the car you drive predict your likelihood of bankruptcy  (Read 2453 times)

gamassey

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According to Experian's data your car says a lot about your credit score.  Should LC start including the type of car each applicant is driving?

http://www.azcentral.com/story/money/business/consumer/2014/05/01/can-you-tell-a-persons-credit-score-by-the-car-they-drive/8565251/

The article argues that the car you drive may say something about who you are and how you handle money.

5 cars that attract buyers with the highest credit scores
  • Subaru Forester
  • Subaru Outback
  • Acura MDX
  • Acura RDX
  • Lexus RX350

Both of the Subarus price out at the low to mid $20,000s. The Acuras, meanwhile, are entry level luxury cars starting in the $30,000s and up. Not exactly expensive cars. But they all attract buyer who have sky-high credit scores.

So what is it about these 5 cars? They tend to be considered reliable, and none of them are flashy. That means they attract people who want things that are going to work, not things that are going to have a lot of drama during their working lifetime.

On the other side you may have bad credit if you drive these cars...

5 cars that attract buyers with the lowest credit scores
  • Dodge Avenger
  • Kia Forte
  • Chrysler 200
  • Nissan Versa
  • Kia Rio
The Dodge Avenger is not exactly a cheap car. Yet the average buyer has a subprime credit score. As the Arizona Republic writer notes in a mean-spirited kind of way, "Avenger drivers, beware: This car might be saying, 'Bankruptcy filer on board.'

yojoakak

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Re: Does the car you drive predict your likelihood of bankruptcy
« Reply #1 on: June 21, 2014, 10:56:22 AM »
Is this only NEW cars?

faeriering

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Re: Does the car you drive predict your likelihood of bankruptcy
« Reply #2 on: June 21, 2014, 11:11:41 AM »
I like where yojoakak is heading.  In my experience people who are credit worthy drive older reliable cars that they aren't carrying debt on.  In "The Millionaire Next Door", they say that most millionaires in the US don't buy new cars.

http://en.wikipedia.org/wiki/The_Millionaire_Next_Door

Of course people that are millionaires (or are going to be millionaires), likely aren't borrowing money from LC unless they qualify for the lower rates. as there are lots of other ways to get cheep money.

New Jersey Guy

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Re: Does the car you drive predict your likelihood of bankruptcy
« Reply #3 on: June 23, 2014, 12:44:27 AM »
Quote
he Dodge Avenger is not exactly a cheap car. Yet the average buyer has a subprime credit score.

Slightly incorrect.  The Avenger SE has an average sticker price of about $22K.  The Chrysler 200 just a tad above that.  Both the Chrysler 200 and Avenger have had historically high rebates upwards of $4000.  Most subprime buyers have little or no money to put down, and banks won't approve them on say a used car that might be only 1 year old.  They will finance them on a new car, and both the Avenger and 200 are perfect "Payment" cars that make both the bank and buyer happy. 
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