John Oliver on the Cruel Poverty Trap That Is Subprime Auto Lending


Never forget this: Those who pay the highest price for the American system of transportation — one that makes owning a personal car practically a mandate — are the poor. We’ve reported before about how the largely unregulated subprime auto lending market has been expanding in recent years, leading some people to wonder if a breakdown in the auto loan industry could echo the housing bubble.

HBO funnyman John Oliver, along with guest stars Keegan-Michael Key and Bob Balaban, took on the topic in a recent segment we thought was worth sharing.

Here is a shortlist of some of the horrors Oliver describes:

  • Commutes that are virtually impossible by transit,
  • Cars sold for double the Kelly Blue Book value,
  • Interest rates as high as 29 percent,
  • A single Kia tracked by the Los Angeles Times that was sold, repossessed or returned eight times in three years,
  • In-car devices that beep in the event of a missed payment before disabling the vehicle entirely, and
  • Default and repossession rates of 31 percent.

It’s cruel that our society all but requires people purchase an expensive consumer product, trapping them in usurious financing schemes, just to participate in the workforce. But because of our auto-centric land use and transportation policies, that is precisely the quandary too many Americans face.

  • Alicia

    What about buses that don’t stop or don’t show up? Is that a resource issue?

    It can be, depending on the circumstances. To determine that you have to figure out why don’t they show up – is it because the driver is having a smoke break (discipline / morale issue) or is it because they frequently get caught in traffic (public policy issue) or is it because they broke down from mechanical problems?

    Money absolutely has a part to play in the quality of a mass transit service. Money determines how many buses and trains you can buy. Money determines how many drivers you can hire. Money determines how many dispatchers, mechanics, and other support personnel you can afford. Money determines the quality of bus stops (whether or not they afford protection from the elements.) Money has a lot to do with things. Whether the bus driver (in my local system) is irritable or polite, I get where I need to go. That’s not really because of the bus drivers, but rather because the management of the bus system, as well as county officials, are willing to put in the effort to provide decent bus service. Focusing on the lowest tier of employees (the drivers) necessarily means you’re going to miss the forest for the trees.

  • Alicia

    I’ve taken buses all over LA,

    Congratulations. You’re an expert on buses in LA. But do you honestly think that is the same as knowing about “buses in general”?

  • bolwerk

    Of the “1 in 5” you mention, the two that are widespread are Medicaid and SNAP (food stamps). Unless they personally like higher medical bills, I’m not sure why even the most boneheaded neoliberal would complain about the first, and in any case it’s probably mandatory for most people who are eligible. On average SNAP pays out something amounting to a portion of a monthly grocery bill – and probably survives because it’s a backdoor subsidy to big agriculture.

    SSI (“disability”):

    The monthly maximum Federal amounts for 2016 are $733 for an eligible individual and
    $1,100 for an eligible individual with an eligible spouse.

    Basically, the benefit doesn’t even cover rent in a typical large urban area. (That’s the one with participation in the ~8-9 million range.)

    TANF? This year under 3 million users at any given time, and it’s temporary. Hovers nearer to 4 million when you count efforts by states. Needless to say the average benefit is under $1000 in pretty much every state and often much less.

    Either way, not saying various sorts of social safety net programs are unusual, but precious few people get anything approaching a living from them. You can work that out by comparing the benefit amounts to prices. If you don’t like benefits, the realistic alternatives are living wages or widespread destitution. Actually the American government has rather choosing the latter, since we’ve been systematically dismantling the social safety net and I don’t think even full employment has been a policy since the 1970s.

  • farazs

    That is not doubling down, that is walking back! You first made a blanket statement, then you made it specific to LA and then you imposed further conditions to qualify it. There was a fundamental disconnect between what you thought you were saying and what you were saying. That no longer seems to be the case!

  • Joe R.

    For what it’s worth 10 miles is a distance anyone in reasonable physical condition can bike in 30 to 45 minutes, depending upon their level of fitness. That’s about the same amount of time it takes you to drive.

    Also, have you ever considered that bus service might actually be much, much better if more people started giving up their cars? Back before automobiles became popular, public transit (mostly streetcars, interurbans, subways, and railroads) often offered faster trip times than driving today does. These systems were systematically dismantled and underfunded to force people into private automobiles. The reverse could easily happen if we want it to.

    The bus system by you must be pretty lousy for it to take 3.5 hours to travel 10 miles. Then again, it sounds like driving isn’t that great an alternative, either, given your average speed of only 15 mph. And while we’re at it, that ridiculous 7AM start time at work isn’t helping things, either. WTF is up nowadays with employers requiring people to be in at hours like that? That all but guarantees you’re forced to drive except maybe in places like NYC because transit is typically sparse before about 7 AM. It’s also none too helpful if you’re trying to have normal sleep patterns where you actually don’t wake up until after the sun rises.

    We’re really sick in this country with a lot of the brain-dead choices we’ve made, both with regards to transportation and to not striking a reasonable work-life balance. You couldn’t pay me enough money to be at work at 7AM. That’s just a fucking ungodly, ridiculous time to have people start work unless your work force lives on site in company housing.

  • Joe R.

    We don’t have enough jobs for full employment and we likely never will again. That’s a reality politicians don’t like to face. In fact, with the coming automation of lots more things, you’ll have the disappearance of driving jobs, municipal functions like garbage collection, service jobs like cashiers, basically every type of job someone someone without much education might be able to do.

    We’re going to have to make lots of hard choices. Do we limit reproduction only to those likely to produce offspring who might be useful to society? Do we have a system where everyone gets a basic sustenance check from the government, and work is used only to supplement this, not as a means to support oneself? Will the outputs of mechanized means of production be distributed somewhat equitably regardless of who owns these means of production? From where I stand we’re going to be heading more towards what might be considered a “socialist” society out of pure necessity. We may ultimately even end up with a better average standard of living for it once all the grunt work of society is mechanized. Let’s just hope at some time in the future the machines don’t become intelligent enough to rebel!

  • Slexie

    I’ve never walked back anything I’ve said! I’ve always been clear as to where I’m talking about. Bus service will never be as fast or as precise as driving a car. I absolutely know what I’m saying. I’ve got places faster sometimes walking than sitting on a bus in traffic. No one is walking back anything so get that out of your head.

  • Slexie

    SSI is for people who have never worked or who have worked so little that they have not paid into the system enough to earn much of a benefit. Those people will always be poor, and that’s not really disability, that’s a social security supplementation. There are plenty of people who have worked much of their lives and have been laid off in their late 40s or 50s and are not working anymore. Because of the lack of jobs, they are trying to get on disability instead. When I broke my ankle, I was laid up for about 3 and 1/2 months. Although it only would have lasted for one year and it was state disability, I was getting $650 a week in disability payments, non taxed. That’s $2600 a month for being disabled. That’s the max you can get in my state. Now after that if I was still disabled, I could have tried to get on SSD which is based on what you earn. There are many people who have worked and are getting way more from the feds than $733 after exhausting their state disability benefits. Permanent disability is different and in some cases it can be taxed. But lots of people get by with disability as a source of income.

  • Slexie

    I’ve made is absolutely clear I’m talking about LA. I’m sorry you don’t still don’t understand that. However, show me a significant number of people in any state, who would stand at a bus stop instead of driving. You won’t find them. Maybe BRT in Rio, but those people don’t have cars anyway because many of them are too poor. No one is giving up their car to take the bus. Period.

  • Slexie

    I wasn’t addressing you. However, I am a girl and my blood pressure doesn’t explode ever in traffic jams. And no one said anything about “blood pressure problems”. I’m sorry you were confused and didn’t understand that. Let me know if there’s anything else you need explained, because you seem to get confused often.

  • Slexie

    How am I defining anyone’s life? Am I telling anyone how to live their life? Am I telling anyone how their life is? Nope. You’re bored and are bagging on me because you have nothing better to do.

  • Slexie

    I don’t think it’s a lack of demand. Uber would not have succeeded is there wasn’t a need for people to get around without cars. Uber proved people would rather still take a private car than wait for a bus. Bus service in LA has stayed the same since the 80s. Despite the change in population, transit ridership has stayed flat. Getting to work at 7am is great because there is traffic, but it’s not as bad as say 7-10am, that’s the worst. I would rather get to work early and get out early to beat the rush hour.

    I do have a bike and I use it quite often. But I’m not biking in a suit 10 miles to work, can’t do it. If they had a shower at my work I would consider it. But I will say when I lived close enough to bike to work every day, I really loved it! Never had to worry about traffic and felt great all day. Riding home made me destress myself and when I got home I was in a great mood.

  • Slexie

    Most of the people using mass transit do not have cars. Or they have significant parking costs at work and they live close to a transit station. If you chose not to buy a car, then you have no choice. You are taking public transit or Uber. You can’t make a choice on a day to day basis because you don’t have a car. Most people choose to drive rather that wait at a bus stop if they have a car. People commuting to work usually have a set way to get to work. No idea what your argument is about. Is a sailboat ride to work an option for you? What a weird way to make a point.

  • Slexie

    Whatever that means.

  • Slexie

    San Francisco is a tiny area and they have great mass transit. I can’t speak for Seattle. But San Francisco has the BART, I’m pretty sure that’s not a bus.

  • Slexie

    I don’t care WHY they don’t stop. That’s not my issue. All that kid knows is that the driver didn’t stop. You’re making a lot of excuses for bus service that is substandard. No one should have to put up with that. Because if you knew why, what’s the difference? It has nothing to do with the riders. The bus still isn’t getting them to where they need to be. Who gives a s#%t if the driver is irritable? Oh he was taking a smoke break, oh then it’s ok? Nope.

    Bus drivers don’t decide to put a drinking fountain or wi-fi access at a bus stop. What does that have to do with anything? Who cares about that when the bus doesn’t even show up? It’s only going to take one time for someone to be late to work to make them give up on the bus. Riders should not have to analyze or have some focus group to figure out why a bus didn’t show up. That’s beyond ridiculous. All they know is the service is terrible, so they are less likely to use it. Whatever you’re talking about has nothing to do with what I said. Money doesn’t fix bad attitudes or irresponsibility. Either you care or you don’t. Your boss or “management” as you call it, doesn’t control your mood every day. You are still required to do your job to the fullest no matter what mood you’re in. Where are you getting this from? If you’re that unhappy in your job, you still can’t take it out on the riders. I’ll take an irritable driver any day than no driver at all. Who cares what mood the driver is in anyway? That has zero to do with him being on time and stopping the bus when he’s supposed to.

  • Exactly, and many of them also don’t run early/late enough to be useful for people who do have the ability to make the bus a useful part of their commute.

  • People don’t necessarily have to bike the entire distance to work. The great thing about bikes is that they make transfers much easier. A trip that would require riding all the way to the central terminal to transfer can be cut down significantly by biking a leg that then allows one to catch the earlier bus. Of course, a full bike rack does complicate things.

  • Alicia

    They also, you know (or at least you should know) have SFMTA, which runs buses.

  • Alicia

    I wasn’t addressing you.
    Wholly irrelevant on an open forum.

    However, I am a girl and my blood pressure doesn’t explode ever in traffic jams.

    Maybe, maybe not. But as we can see, it explodes whenever you find someone who disagrees with you online.

  • Alicia

    It means you have a noticeable track record of trolling this website, that’s what it means.

  • Alicia

    No idea what your argument is about

    Then read it again. Maybe your reading comprehension will get better the second (or third, or fourth) time around.

  • Slexie

    Why are you bothering me? If you have something to say about the issue, that’s fine. What you think of me as a person really isn’t relevant. If you feel left out, I can’t help you.

  • Slexie

    Why would I read something that is a waste of my time again? If you can’t get your point across the first time, that’s not my problem.

  • Slexie

    It’s not even the bike rack that I’m worried about. The buses here only have a rack that can fit 2 bikes. Most of the time it’s full when it gets to me. If I’m going anywhere, I usually bike the whole way.

  • Slexie

    I’m not a troll and you should learn what a troll is before you use that as an insult. Get back to me when you can define what a troll is. Do you need some thing to do? Are you bored or something?

  • Slexie

    Hey, if your family and friends can’t afford a car like you, they have no choice to get around either. They have to take the bus. I’d love to see the list of all the people you know who had a car and gave it up because they love taking the bus.

  • Alicia

    I’m not a troll and you should learn what a troll is before you use that as an insult.

    “Trolling. Being a prick on the internet because you can.” This decries the majority of your posts here.

    http://www.urbandictionary.com/define.php?term=trolling

    As far as “something to do” goes, I read the Streetsblog websites to keep up with news about city planning and street design, and to look for good ideas to promote in my community. Why are you here, exactly?

  • Slexie

    I’m commenting on the issue, which has nothing to do with trolling. So your definition doesn’t apply to me. You’ve commented on things that didn’t involve you at all, so it looks like you’re the troll. Thanks for pointing that out, now we all know.

  • @farazs – Your English is fine, certainly better than your interlocutor’s reasoning.

  • @Alicia – He/She’s here to dispense her/his deep wisdom about a political party he/she doesn’t like, because that’s ever so relevant to the issue.

  • @Slexie – If you would like to be regarded as something other than a troll, try to refrain from spewing random and irrelevant Fox News talking points on a website that’s focused on transit.

  • Slexie

    I’m not a “he”, I’m a girl. And making a comment that more than one person has commented on shows interest in said comment. Maybe you could make a comment that is interesting too, try it.

  • Slexie

    I don’t watch Fox News, so you’re wrong yet again. What other assumptions are you going to make about me? Looks like you’re the one trolling. Not to mention my comment spawned an entire comment thread, so tell those people the same, ok? And learn what a troll is, you fit that pattern way more than I do. Following my comments and making snarky remarks about me to others is the height of trolling. So step off.

  • Slexie

    See? THAT’S trolling. Your comment isn’t about transit is it? So take your own advice.

  • Slexie

    So now you’re editing your comments? You really are a troll.

  • @Slexie – It’s great that you don’t watch Fox News, but parroting talking points without even knowing where they originated isn’t something to brag about.

  • Slexie

    You’re just mad all your assumptions about me were wrong. You even went back and edited your comments after I called you out. Keep it up, you look really dumb.

  • Joe R.

    I have a few theories on Uber. For starters, in places which have good transit which large numbers of people use, Uber mostly siphoned rides from the existing for hire car services. The total demand for private car services at best increased slightly, and that was only because Uber made them slightly more affordable than alternatives like yellow taxis.

    Second, in general people have little imagination. If they’re driving now, they can’t imagine taking a bus or train but taking a car service isn’t a heavy a lift (no pun intended). This might be why Uber does well in markets like LA. Also, the way LA is presently laid out, it’s really difficult for transit to be feasible for lots of people. You would need large areas of the city to start densifying and also for there to be large concentrations of jobs in a few areas, as opposed to all over the city. In other words, LA would have to change its land use patterns to resemble those of pre-WWII cities. This may happen over the long term, but until it does transit won’t have as a high a mode share as it does in places like NYC.

    This brings us to bikes. You do know e-bikes exist if arriving at work sweaty is problem? E-bikes make bike commutes of 10 miles or more feasible for anyone capable of riding a bike. I understand to some extent the present advantages and need for private transportation of some sort in places like LA. However, if we’re talking about transporting one person with little or no cargo then I fail to see why the default for that transportation has to be a polluting, several ton, ICE-engine powered automobile. Bikes and e-bikes can take an enormous mode share in places like LA right now.

    Incidentally, early start times might be better if you’re driving or biking, but they’re much worse if you’re taking transit. For example, whenever I’ve had jobs where an employer might have asked me to come in at, say, 7AM or earlier, I just couldn’t do it, even in NYC. The subways run infrequently before that. The bus I needed to take to the subway ran at hourly intervals until 6AM. Miss a bus and you’re screwed. Even best case if you caught the right bus, it didn’t mesh all that well with the subway schedules, so you might end up having to leave 5:30 to arrive at 7 whereas the same trip would take 45 minutes or less with an 8AM or later arrival time. Mass transit in general doesn’t work well with odd hours. At least employers in NYC realize this, and seldom ask anyone to be in before, say, 7:30 AM.

  • bolwerk

    I’m not sure what is supposed to be so interesting about permanently disabled people permanently receiving a disability benefit of some sort, though in NYS and I presume other states that seems to largely be a function of employer-funded workers comp (usually an insurance policy costing a few cents per dollar of payroll). Kind of stretches even a broad definition of “public assistance” or “welfare.”

    Do you have some actual statistics showing where the scandal is? Because “lots of people” is a pretty vague quantification. “Lots” more people probably make unfortunate health choices that have greater impacts on public and private health expenditure like being obese or smoking (cf., good ol’ moral hazard).

  • Slexie

    I wrote earlier about having to be at work by 7am and catching the bus to get there at 3:30am. LA is way more spread out than NY, so what works there doesn’t always apply here. Plus, a lot of people here don’t feel safe riding a bike in the streets. There is a lack of bicycle infrastructure and the infrastructure that is in place is woefully unsafe and poorly designed. It’s the main reason most of my friends won’t ride bikes with me.

    I already have a bike and the bike share is something I’d have to take a bus to, and as God is my witness, I will never step foot on a city bus again. I’m not crazy about the prices for bike share either, but that’s just me.

    Transit riding in LA has stayed flat since the 80s. With the rise of Uber, there clearly was a market for it. You can’t tell me every drunk person at the bar was calling a private car service to pick them up, can you? I don’t see people getting ready to go out and hiring a private car service to take them to the bar. Most people wouldn’t dream of taking public transit in LA, I really think that’s why Uber thrived here. It’s cheaper than a car service and a taxi and it’s door to door service. That’s way better than the bus. and you’re never late.

  • Slexie

    Have you heard of a company called PCG? They’re the Public Consulting Group and they offer a service that combs through the list of people in a state who are on welfare. They try to find people who can be shifted to disability to take the burden off the state. Welfare costs the state money, so it’s better for them to put those people on another form of aid. The PCG agents fill out the Social Security disability application over the phone for the welfare recipients they have chosen. When they don’t have the right medical documentation to prove a disability, the agents help them by calling doctors’ offices. PCG sets up doctors’ appointments and calls applicants the day before to remind them of those appointments. For every person that PCG gets switched over to disability, the state pays them something like $2300. So imagine you collect welfare, and suddenly someone calls offering to help get you on disability. That’s not any type of employer funded workers comp.

    I was on disability for 3 months when I broke my ankle. It was paid by the state, not my employer and not the feds. I received $650 a week, tax free. That amount would have been good for a year. After that I don’t know what would be next, but I didn’t need it because I went back to work. Everyone can get social security when they retire, but social security disability can be collected at any age, including children.

    “According to research by Heritage Foundation labor economist James Sherk, about one-third of the drop in labor force participation from 2007 to 2013 is due to 2.1 million more Americans going on SSDI.”

    http://dailysignal.com/2015/04/11/1-in-20-of-working-age-americans-receives-disability-benefits/

    ” . . . disability has also become a de facto welfare program for people without a lot of education or job skills. But it wasn’t supposed to serve this purpose; it’s not a retraining program designed to get people back onto their feet. Once people go onto disability, they almost never go back to work. Fewer than 1 percent of those who were on the federal program for disabled workers at the beginning of 2011 have returned to the workforce since then, one economist told me.”

    The Social Security Disability Insurance Reform Act was passed in 1984 and:

    “instructed the government to place greater weight on applicants’ own assessments of their disability, especially when it came to pain and discomfort; to replace the government’s medical assessments with those of the applicants’ own doctors; and to loosen the screening criteria for mental illness, among other things. The overall effect was to create a giant loophole, by which an applicant’s subjective claim that he was in pain, or mentally incapacitated, would be enough to claim disability.”

    http://www.forbes.com/sites/theapothecary/2013/04/08/how-americans-game-the-200-billion-a-year-disability-industrial-complex/#3e6aa3ad1f54

    You can read the articles I referred to for more information.

  • Also, the way LA is presently laid out, it’s really difficult for transit to be feasible for lots of people. You would need large areas of the city to start densifying and also for there to be large concentrations of jobs in a few areas, as opposed to all over the city.

    The problem isn’t with how LA is laid out, it’s with how the streets are laid out. LA has a lot of streets that are plenty wide enough to support dedicated transit lanes that would greatly improve service, including quite a few which were originally built around streetcar lines. That’s an improvement that could literally be done overnight and without making any other changes whatsoever, would go extremely far in making transit more feasible.

  • Alicia

    Your lack of self-awareness is still on display.

  • Alicia

    ….I’m commenting on the issue,

    You’re doing so in in intensely trollish way. You’re rushing to get angry and rant at people without even taking the time to read and understand their points. You’re definitely a troll.

  • Slexie

    No I’m not. I’ve given plenty of informed answers that have managed to stay on topic. If you don’t like the “way” I did that, too bad. Don’t comment on what I have to say if you don’t like it. And don’t call me a troll when I defend myself against snarky comments from people like you. YOU are the one who won’t leave me alone. Stay on topic or step off, I’m done with you.

  • Slexie

    If you have nothing better to do than make petsonal comments about me, I think you need therapy, since we’re getting personal. Good luck.

  • Slexie

    If you don’t like the WAY I comment, too bad. No one cares what you think about the WAY people comment. You don’t have a say in how or what people think. Who died and made you boss? Oh you’re not the boss. So step off. Your opinion means nothing.

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