Before launching into their main segment about predatory auto lending, host John Oliver and the team at Last Week Tonight began by discussing the 2016 election. Despite having a rough few weeks politically, Hillary Clinton and her potential scandals were "eclipsed by the exploding star that is Donald Trump; the owner of what you describe as resting rich face".
Trump gave a speech earlier last week in which he proposed actual details for an actual tax policy. In fact, he stayed on point throughout the greater part of an hour when giving that speech. Oliver quipped that it must have made his campaign happy to have him on message. Unfortunately, the rest of the week descended into what one has come to expect from Trump's campaign rather quickly.
After mentioning how Trump suggested that "second amendment people" stop Clinton, Oliver highlighted one of Trump's most outrageous statements this campaign (and that's saying something): that President Obama "founded ISIS", with Clinton as co-founder. When confronted, Trump didn't back down, refuting any attempt to help him clarify his statements or present them as metaphors.
That whole mess hadn't even cooled before Trump took things one step further, and made a dangerous suggestion. While at a campaign stop in Pennsylvania he remarked that the election could be rigged, and that Clinton may win only because of cheating. This could cause chaos on election day, given that Trump was already projected to lose Pennsylvania, and that no Republican has won that state in decades. Trump has even set up a "Trump Election Observer" application on his website, which Oliver pointed out and in no way, shape, or form suggested that his viewers fill out the form and take part as Trump Election Observers.
Oliver also took a few moments to call out the American Petroleum Institute for placing an ad bearing a striking resemblance to the intro to Last Week Tonight.
The main segment dealt with predatory auto lending, a practice many dealerships use to take advantage of people with lower incomes who are in need of a vehicle. While there are other ways of commuting, especially to and from work, nearly 86 percent of Americans travel by car, with the other 14 percent relying on public transit. However, in some regions, public transit simply isn't available or turns a shorter commute into one that is impractically long. In turn, this makes it nearly impossible to hold down a job or transport children to school or daycare prior to work.
While there are reputable dealerships who offer car loans, the problem lies in dealerships offering high risk, subprime loans, targeting those with bad credit. Nearly a quarter of all car loans issued are subprime loans. These types of loans are at a ten year high, and typically offered by "buy here pay here" dealers.
These dealers do their own lending, with ads positioning themselves as the same as a bank, removing the need to be approved by a third party. In many cases, they don't even look at the credit report of the buyer either. Oliver pointed out that, in theory, this isn't a bad thing. It helps those who may not be able to afford a loan with a better interest rate get a car, enabling them to keep a job or get themselves and their kids around.
The issue is that these loans often come with extraordinarily high interest rates, forcing buyers to pay a lot more than what the car is actually worth. At dealerships like these, interest rates can go as high as 29%. In one case, a woman would have paid approximately $13,000 for a car only worth $3,000.
The way these loans are structured can often set people up for default, which happens on about 30% of all loans. Payment terms can be exceptionally restrictive, with repossession often happening less than a week of a missed payment. In fact, some dealerships even install a device in the car itself, that will shut the car off when activated.
Subprime auto loans are rising in popularity, creating a surprising amount of competition when it comes to giving loans to people with poor credit. In many cases, dealerships are specifically targeting people who have recently declared bankruptcy. These practices aren't just limited to smaller car dealerships either, with leading lenders like Santander and GM Financial also offering subprime loans.
Oliver highlighted the similarities between subprime auto lending and the mortgage crisis that happened just a short time ago. Many leading financial experts are concerned that this is simply history repeating itself, only with cars instead of homes. If the loan bubble bursts, it won't be as major as the housing crisis was, but there will still be a noticeable effect ripple throughout the market.
The segment ended with a brilliant sketch featuring Keegan-Michael Key, presenting their own version a too-good-to-be-true car loan ad.
You can watch the segment on auto lending below. Last Week Tonight will return next week on HBO.
...the 2016 election, or as you may know it 'Lady Liberty Convenience Store Robbery Gone Wrong Descending Into A Hostage Situation And Now She's Demanding A Chopper' 2016.
...at least he made sure to include Hillary as co-founder. #Feminism #ISISWithHer.
He's like a guy drowning but waving off a life boat, saying 'get out of here, I'm very buoyant. I'm the most buoyant. Everybody talks about my buoyancy. I'm a tremendous floater.
You have so thoroughly copied our credits that by the end of that ad I was honestly worried I was about to watch 29 minutes of a rat-faced Englishmen telling me sad news facts. And who wants that?!
That song is un-trucking believable.
I don't mean to be judgey, but don't approve the clown. He's a clown. Genetically speaking, he's programmed for murder.
That is both inspiration and profoundly upsetting. It's like if the song 'I Believe I Can Fly' merged with the rest of R. Kelly's life...Don't Google that.