Alan Helfman, a car dealer in Houston, served a woman in his showroom last month with a credit score lower than 500 and a desire for a new Dodge Dart for her daily commute. She drove away with a new car. A year ago, with a credit ranking in the bottom eighth percentile, “I would’ve told her don’t even bother coming in,” said Helfman, who owns River Oaks Chrysler Dodge Jeep Ram, where sales rose about 20 percent this year. “But she had a good job, so I told her to bring a phone bill, a light bill, your last couple of paycheck stubs and bring me some down payment.” As the fifth anniversary of the Federal Reserve’s policy of keeping interest rates near zero approaches, the market for subprime borrowing is once again becoming frothy, this time in the car business. As with mortgages in 2006 and 2007, the central bank’s stimulus is making it easier for people with spotty credit to buy cars as yield-starved investors purchase riskier bonds linked to auto loans. While surging light-vehicle sales have been one of the bright spots in the U.S. economy, it’s increasingly being fueled by borrowers with imperfect credit. Such car buyers account for more than 27 percent of loans for new vehicles, the highest proportion since Experian Automotive started tracking the data in 2007. That compares with 25 percent last year and 18 percent in 2009, as lenders pulled back during the recession. Issuance of bonds linked to subprime auto […]

Call it a test case for the 2014 congressional elections. Tomorrow’s contest for Virginia’s next governor is drawing attention as a national harbinger, and it’s giving Republicans plenty to worry about. Polls show Democrat Terry McAuliffe, the former national party chairman and fundraiser, ahead of Republican rival, state Attorney General Ken Cuccinelli. If that’s the outcome of the race, it would make McAuliffe the first candidate of a sitting president’s party in almost four decades to win election in the Old Dominion, a state that voted twice for both former President George W. Bush and President Barack Obama. “As Republicans, we have to ask, is there a business model issue here?” said former Virginia Republican Representative Thomas M. Davis III, director of federal affairs for Deloitte Consulting LP. “We have a Republican who’s opted to go theTea Party route, and it’s absolutely clear it’s a losing strategy — that’s going to be the message of this” election. The contest has taken on national significance in its closing days, with each candidate working to portray his opponent as a poster boy for all that is wrong with his party. McAuliffe, 56, who campaigned with Obama yesterday and appears with Vice President Joe Biden today, is painting Cuccinelli as an ally of the small-government Tea Party movement that orchestrated last month’s 16-day federal government shutdown. “Ken Cuccinelli has spent his career creating gridlock from the political fringe,” McAuliffe said during his appearance with the president in Arlington. “The question in this election is simple: Will the mainstream, bipartisan majority in […]