Last Week Tonight with John Oliver (2014–…): Season 3, Episode 21 - Auto Lending - full transcript

LAST WEEK TONIGHT
WITH JOHN OLIVER

Welcome, welcome, welcome
to "Last Week Tonight" !

I'm John Oliver,
thank you so much for joining us.

And let us begin tonight
with the 2016 election.

Or as you may know it,

The Lady Liberty Convenience Store
Robbery Gone Wrong

Descending Into a Hostage Situation,
Now She's Demanding a Chopper 2016.

The two candidates
have had a busy week.

First Hillary Clinton.
Can we talk about that new hairdo ?

No. No. We never, ever can.

She released her tax returns this week
and had to navigate the fallout from



the release
of State Department emails.

And yet, as it's always the case,

she was eclipsed by the imploding star
that is Donald Trump.

The owner of what you might describe
as resting rich face.

This was the 53rd consecutive win.

He was going to put his campaign
back on track

and on Monday he gave a big speech

to outline actual details
in his tax policy.

I am proposing an across-the-border
income tax reduction,

especially for middle-income Americans.

This will lead to millions
of new and really good paying jobs.

If you're thinking

"That's the most boring
Donald Trump speech I've ever seen",

that might be because he was reading
that script off a teleprompter,



not talking off the top of his head.

It's like watching
a circus seal fold laundry.

That's not the thing you normally do,

but I can't wait until you get back
to doing the fun stuff.

But to be fair,
his campaign must've been pleased

to keep him disciplined and on message
for an entire hour.

Unfortunately, the rest of the week
quickly devolved,

because the very next day
he made a chilling suggestion

that second amendment people
could stop Hillary Clinton.

And before people could even
get over that, he moved on to this.

ISIS is honoring president Obama.

He is the founder of ISIS.
He is the founder of ISIS.

And I would say the co-founder
would be crooked Hillary Clinton.

I tell you what,
I will give Trump this.

At least he made sure
to include Hillary as co-founder,

hashtag "Feminism",
hashtag "ISIS with her."

Now clearly what he just said
is absolutely absurd.

But even when people tried
to help him reframe it,

he doubled down.

Conservative radio host Hugh Hewitt
pressed him on that.

You meant that he created the vacuum,
he lost the peace...

No, I meant he's the founder of ISIS.

But he's not sympathetic to them.
He hates them.

I don't care, he was the founder.

He's so insistent.
He's like a guy drowning,

but waving off a lifeboat saying,

"Get out of her, I'm very buoyant,
I'm the most buoyant."

"Everybody talks about my buoyancy,
I'm a tremendous floater."

Trump was forced to walk
his ISIS remarks back on Friday,

tweeting "Ratings challenged
CNN report so seriously"

"that I call President Obama
and Clinton the founder of ISIS."

And then in all caps,
"THEY DON'T GET SARCASM ?"

And yes, sarcasm is a bullshit excuse,
it's the douchebag's apology.

But at least he diffused the situation,
which is what made so much weirder

when later that same day
he walked his walk back, back.

So I said "the founder of ISIS",
obviously I'm being sarcastic.

Then... But not that sarcastic,
to be honest with you.

What are you doing ?
What are you doing ?

You know that riddle
where there are two people,

one who always lies
and one who always tells the truth ?

Donald Trump is both of those at once.

And he had barely put
that hot mess behind him when,

in Pennsylvania, he started up
a whole new controversy.

The only way we can lose,
in my opinion,

I really mean this, Pennsylvania,
is if cheating goes on.

The only way the can beat it,
in my opinion,

and I mean this one hundred percent,

if in certain sections of the state
they cheat.

Okay, he means it one hundred percent,

so by the time this show airs,
he'll presumably have said

he was kidding, but not,
but yes, but maybe,

but not, but yes, but maybe.

But what is really worth
taking noticed of there

is that he's suggesting

the election may be stolen
by his opponent.

And that's actually dangerous.
He is priming his supporters

to question the result
when he loses Pennsylvania,

as all republican presidential
candidates have since 1988.

And he's not just
talking the talk here,

he's asking his supporters
to walk the walk.

His website now has an application
that you can fill out

to be a Trump election day observer.

In a way, we are all
Trump election day observers.

Because if you look out of your window
in November

and see four horsemen
of the Apocalypse,

you'll know
"Oh shit, they've just called Florida."

But it does seem he actually wants
people to participate.

If you go to his website,
which you absolutely should not,

and try to sign up,
you'll be asked to donate,

which, again,
you absolutely should not do.

Anyone who wants to give their money
to a Manhattan narcissist

whose interest begin and end
with the plight of white people

should keep in mind

that Woody Allen's "Café Society"
is getting decent reviews right now.

Not great, but decent,
it's one of the fine ones.

We wanted to see
what actually signing up involved,

so we signed up without donating and
received an email from the campaign

saying "We are going to do everything
we are legally allowed to do"

"to stop crooked Hillary
from rigging this election."

Which is troubling,
'cause I'm not sure Donald Trump

what he's legally allowed to do.

His own attorney once had to apologize

for saying
"You cannot rape your own spouse."

And honestly, I'm surprised
Trump even had an attorney,

I've always presumed he got legal
advice from a John Grisham paperback

purchased
at a white supremacist yard sale.

Remember, this week was supposed
to be all about his economic plan.

To be fair, he did try to get back onto
a focused economic message on Friday,

it's just by that point,
the prompters were gone

and he was back to doing
what he does best.

I love these boards.
Look, here's a beauty.

I love charts, I love them.

And I always say it's too tough
to put the screen up,

you gotta get guys, it cost
too much money... I don't like it.

This is a cheap version of a screen,
okay, just as good.

But you need good, strong hands.

So look... ready ? Here it is.

That is just... magnificent.

Just a recap: he picks up a chart
and says "Here's a beauty",

he then utters when a straight face
the sentence "I love charts",

before unconvincingly claming

that only someone with big,
strong hands can hold a chart up.

And then he turns the chart
back to him

as he's clearly forgotten
whatever the fuck is printed on it.

Look, I cannot wait
for this campaign to be over,

but part of me
is going to miss him when he's gone.

So let's move on for now
to the Olympics,

the only time trampolining
is considered a sport

rather than the most effective way
of breaking a nine year old's arm.

The Olympics has featured
stirring performances all week,

but perhaps the boldest thing I saw
occurred during a commercial break,

with an ad for API,
the American Petroleum Institute.

They are paying for ads during
the Olympics in certain markets

and there's something
a little familiar about them.

Who opposes harmful fuel mandates ?

Producers and restaurants,
tailors and car owners,

and who will pay more at the pump
and the grocery store ? You.

Tell Congress you agree

to fix the harmful
renewable fuel standard.

If you're still not quite seeing it,
perhaps this will help.

You took our shit, API !
You took our shit !

Everything from the font
to the design style.

You have so thoroughly copied
our credits, by the end of that ad,

I was honestly worried
I was about to watch 29 minutes

of a rat-faced Englishman
telling me sad news facts.

Now, ordinarily I would be furious,
but by the look of API's other ads,

they need all the help they can get.

We opened this place
to serve fresh food.

Sell things
like preserves and local produce

and offer folks
a great place to catch up.

These days,
a lot of that talk is about fracking.

Bull shit ! I will bet
the conversations in that shop are

solely about candle making and the year
you spent in prison for insider trading

'cause you all seem to be characters
in a Martha Stewart fever dream.

But somehow even stupider
than the coffee shop ad

is my favorite API commercial,
featuring Rebecca and Andy.

- Energy, environment...
- Some say it's "either or."

I don't buy it.

- We can produce more energy...
- And protect the environment.

- There's been a lot of progress.
- Put politics aside.

- Work together...
- And there's a lot more we can do.

- I'm Rebecca.
- I'm Andy.

Join us and become an energy voter.

Cool !

There's nothing millennials like more
than bros in hoodies

spitting some real talk
on behalf of the petroleum lobby.

If API is going to steal our branding,

they are leaving us with no choice
but to steal theirs.

So please enjoy
the new opening credits of this show

that we are trying out.

- I'm Rebecca.
- I'm Andy.

- We're young and cool.
- I'm wearing a hoodie.

- Andy is wearing a hoodie.
- I use and enjoy Snapchat.

And I think Instagram
is hashtag on fleek.

And you're about to watch
Last Week Tonight.

- But before you do...
- We just wanted to tell you...

The American Petroleum Institute
is the fucking worst.

- The worst.
- Fuck them !

Hey Rebecca, did you know the API
spent decades and million of dollars

supporting deniers
of man-made climate change ?

I did. Did you know they had
research warning them

about a link between fossil fuels
and climate change as early as 1968 ?

Maybe that's why their logo looks like

is being impaled
by a polar bear's dick.

Anyway,
enjoy the Last Week Tonight show.

- I'm Rebecca.
- I'm Andy.

Go fuck yourself, API !

Moving on... Our main story tonight
concerns cars.

The muse for America's greatest songs,

from the complete works
of Bruce Springsteen

to Tim McGraw's
ode to the American truck.

If you like it out loud
And you're hillbilly proud,

Then you know what I'm talking about,
Let me hear you say, Truck yeah !

Truck yeah !

That song is un-trucking-believable.

Sure, it doesn't make sense that
they're driving around in an empty lot

but it looks like they're having fun,
so gives a flying truck ?

But America's auto-obsession
isn't just a hobby.

86% of American workers
get to work by automobile.

The remaining 14% commute
by public transportation, walking

or in the case of that one weird guy
in your office named Nathaniel,

penny-farthing bicycle.

Get down from there.... Stop it !

And if you don't have a car,

holding down a job
can be a tremendous challenge.

Just watch one woman describe
her commute via public transportation.

I normally get the kids out
on their bus on time,

it's just a matter of whether or not
I make my bus.

This is the first bus,

and then I take two trains
and another bus.

Normally, it takes me roughly
an hour and a half to two hours.

If I were to drive to work, it takes
me maybe ten or fifteen minutes.

Her commute would be ten minutes with
a car. Without one, she is literally

the length of the movie
The Imitation Game away from her job.

Which is to say, two wasted hours
that feel like forever.

But, but cars are obviously expensive.

Which is why many people have
to take out loans to buy them.

Some, from places like this.

Everyone is approved
at Viers Auto Sales

regardless of your credit.

Even if this is my trade in ?

Approved.

- Even if I'm self-employed ?
- Approved.

Even if we have two repossessions,
a foreclosure and a bankruptcy ?

Everyone is approved !

Okay, listen:
I do not mean to be judgey here,

but don't approve the clown.
He's a clown.

Genetically speaking,
he is programmed for murder.

Now, that ad is targeting people
with bad credit,

who are only eligible for what
are called subprime loans.

And nearly a quarter of all car loans

are now of the high-risk,
subprime variety.

So many are being issued they've
recently reached a 10-year high.

And if the phrase,
"a boom in sub-prime loans"

is making your eye twitch with
flashbacks to the mortgage crisis,

just wait, we will get there.

But first, let me take you on a tour
of the subprime auto loan industry.

And we'll start with so-called
"buy here, pay here" dealers,

who do their own lending.
They've been around for years,

and their ads
make it all look very simple.

How can we get you financed
when others can't ?

Two reasons: first, we are the bank.

We don't have to send you
or your deal anywhere.

The second reason
we can get you financed

is because we don't even look
at your credit score.

"Of course ! In fact, we don't even
know what a credit score is !"

"What is a good one ? PG-13 ?
640 on the verbal, 710 on math ?"

"Three under par ?
Is that a good credit score ?"

"We've got no idea
and that's why you should trust us."

And look: theoretically, theoretically
it is a good thing

that car dealers lend money to people
who can't get financing elsewhere.

But in practice, these dealerships
can trap people with few options

into paying
vastly more than a car is worth.

It's just one of the many ways

in which, when you are poor,
everything can be more expensive.

The average interest rate at
a "buy here, pay here" lot is 19%,

with some paying up to 29%.

And that, that interest is on top
of mark-ups and add-ons

that can inflate the price of the car.

So just look at Arlene Jones.

She went into a Chicago dealership,
trusting that they would help her.

When she first got
to the Quick Auto lot,

she told the salesman
she had an upper limit on price.

So I said, I can't afford no car
over two, three thousand dollars.

She says he was very reassuring.

Like, don't worry about it.
He said, you can handle it.

In the end, Arlene borrowed $8,600

at 24.9% interest over three years.

If she had paid off the loan,

she would have spent
more than $13,000

on a car that was only worth
about three thousand.

Holy shit ! That is outrageous.
The only way it's acceptable

to sell someone a $3,000 car
for $13,000

is if you slip a mint condition X-men
issue one in the glove compartment.

But it's no wonder
that "buy here, pay here" loans

had an average default rate last year
of nearly one in three.

With most customers
who default doing so

just seven months after taking out
the loan.

Just think about that.
Seven months is not a lot of time.

If you put a seven-month old baby
in front of the screen right now,

it would not understand anything
I'm saying.

It wouldn't even know
if I was making fun of it.

I'll show you. Go ahead,
get a baby right now

and put it in front of the screen,
here we go.

Hi dummy ! Hey ! You don't know

that I'm mocking you
to your stupid widdle face, do you ?

No you don't ! No you don't !

Who knows about that ! Not you !
You don't mind, you don't mind at all !

See ? Seven months is not long
enough to do anything,

now put the kid to bed,
you're a terrible parent.

But the problem is, the problem is,

even if you're just a few days late
on a payment,

the dealership can repossess your car.

And when they do, sometimes, it is
with little regard for what's inside.

When the mother went to pick up
her three children at a daycare

she left her nine month old in the car,

but when she came out there was
no baby and no car.

I wish when you repo a car you check
the car before you take it.

That's really it...

Just don't,
you know take nobody's baby.

Yes, exactly. Don't take a baby
is a good general rule for everyone.

Whether you are repossessing a car,
choosing a prom date,

or making a selection
in the NFL draft: don't take a baby.

You don't take a baby. I don't care
what they did in the combine.

And, and increasingly,
it is not difficult

for "buy here, pay here" dealerships
to repossess your car.

Because many now install
a special device

which goes off
when your payment is due.

Every five seconds the device is
actually beeping at them,

all the way taking their kids
to school, all the way to work.

It's informing them that they need
to make their payment.

However, if they don't,
then the device, at midnight,

most lenders choose midnight
as their time of shut-off,

the device will not allow that car
to start.

Okay, setting aside the horror
of the fact they can shut your car off,

that beeping sound
is unbelievably annoying.

Anyone with a smoke detector knows:

it only takes about 30 minutes
of incessant beeping

before you've completely lost
your mind.

"I pushed the button,
unscrewed the top,"

"and smashed the whole thing
with the bread maker,"

"so the only reasonable option is now
to set my fucking house on fire."

And once they have repossessed
your car,

these dealers don't have to refund
your down payment.

And they might decide
you still owe them money,

because the car is now worth less
than they sold it to you for.

So you can easily end up with no car
and thousands of dollars in debt.

Meanwhile, the dealer can turn around
and sell your car to someone else.

So the truth is,
they can make money either way.

And the same car can get sold this way
over and over again.

And to prove that, let me take you
on a magical journey.

Because a few years ago,
the LA Times tracked the sales

of one car from a Kansas City
buy-here-pay-here dealer.

It was a 2003 Kia Optima,
much like this one.

It had a bluebook value of $5,350

but in April of 2008, it was sold
for nearly 11,000

or double its blue book value.

The original buyer
complained of mechanical problems

and refused to make payments,
so the car was repossessed

and sold again in August, before being
repossessed again four months later,

and was then re-sold
after just three weeks,

before being repossessed again
from a mother of three

who, without transportation,
lost her job at Wal-Mart.

It was then re-sold again in May 2009,

to an owner who complained
of transmission trouble,

so the dealer took it back,
and re-sold it just four weeks later,

after which it was, you'll never guess,
repossessed again

from an owner who later filed
for bankruptcy,

thanks in part to payments he owed
on this piece of shit demon car.

But wait: we are not done.
It was sold again that December,

and was repossessed
just five months later,

before being re-sold in May.

And it was then, surprise surprise,
repossessed again,

even though the owner,
a mother of four,

claimed she made every payment.
And then it was sold one last time,

before being repossessed
just one month later.

That one car changed hands
eight times in three years,

each time at a price double,
or even triple, its blue book value.

At which point, you almost feel bad
for the car,

which presumably needed
two sessions of therapy a week

just to be able to start
its crappy engine again.

Now, now that, that is where
the LA Times left it,

but we felt so emotionally involved,
we actually tracked that car down,

and discovered that since then,
it has been sold again,

repossessed again,
and then sold yet again,

and when we called the last listed
owner, she said it had been stolen,

and I really hope whoever did that

drove it straight off a fucking cliff.

Although, I'm guessing even then,

some sleazy lobster wound up selling it
to a poor unsuspecting fish.

Now, now after seeing that,

you may be glad to hear that
buy-here-pay-here lending

has lost market share
in recent years.

Unfortunately, that is only because

it seems everyone is getting
into subprime auto lending now.

There is a surprising amount
of competition

to give car loans
to people with poor credit,

so much so, people who've recently
declared bankruptcy

are being actively targeted
through the mail.

Just listen to one bankruptcy lawyer
describe what he's seen.

These are all car loan solicitations.

High interest car loan solicitations
sent to my bankrupt clients,

people who have already
filed bankruptcy.

Here's one that looks like a check,
and it's made out to $21,000.

I guess it's gonna be a used car,
with a signature and everything.

Here's one that looks like
some kind of an official certificate.

They encourage you to apply
for a car loan,

even if you've suffered bankruptcy,
car repossession,

foreclosure, or all of the above.

That is a slightly weird tone of voice
to use there.

He sounds almost excited

about a bankruptcy, a car
repossession "and" a foreclosure.

It's like the doctor saying,

"Wow, you have herpes,
HPV and gonorrhea."

"Most people only get one !
You've got the hat trick !"

And, and this feeding frenzy
over subprime customers

now includes big lenders,
like Santander and GM financial.

They have both expanded
their subprime auto financing,

and there are newer players,
like Skopos and Exeter,

who specialize in subprime lending.

And you might be wondering why
the fuck is everyone in such a hurry

to lend money
to people with bad credit ?

In the mortgage crisis,they were
doing that so that they could

bundle those high-interest loans
together and sell them on Wall Street,

but there is absolutely no way
that that is happening...

That is happening again. That is
exactly what is happening right now.

And people have actually been worried
about this for a while now.

Is there a new bubble that's about
to burst in the auto sector ?

Does this concern you at all though

that it could possibly become
a repeat of the home loan boom ?

Do you see similarities between
the housing crisis

and what's going on now
with used car loans ?

Is there concern now that there's going
to be another subprime crisis,

except it's not going to be mortgages,
it's gonna be car loans ?

Yes, there is concern

that this could be the subprime
mortgage crisis but with cars.

And normally, if you add
the phrase "but with cars"

to any historical event,
it sounds a lot more fun.

Like "the Assassination
of Abraham Lincoln, but with cars."

Sadly, this is the exception
to that rule.

Now, before you panic, experts say
there are important differences here.

Subprime auto loans are a much
smaller part of the overall economy

than subprime mortgages were,
so even if they do go bust,

this wouldn't necessarily be
"The Big Short" all over again,

so much as
the direct-to-video version,

with Brad Garrett
instead of Brad Pitt,

and instead of Ryan Gosling,
an actual gosling named Ryan.

And Wall Street firms insist
that they have learned their lesson,

and have set things up in such a way
that tons of loans can default,

and investors will still be fine.

But there are trouble signs.

For instance, standards for some of
the loans being sold as investments

can be shockingly lax.

We've seen deals come to market
with very low FICO scores

and in some cases with
no credit scores at all for loans.

Some people joke

that you really just need a pulse right
now to get a subprime auto loan so...

That's a good joke.
Solid setup, hard punch line,

potentially devastating effect
on the American economy.

Top-shelf comedy there,
it's the rule of threes is what it is.

And behind closed doors,
some in the lending industry

openly acknowledge
conditions are deteriorating.

In fact, when we sent hidden cameras
to a debt buyers conference in Vegas

a few months ago, we stumbled
on Ken Shilson,

the head of the National Alliance
of Buy Here Pay Here Dealers.

He sees trouble brewing, because
he thinks in attempting to keep pace

with the big players
who've entered the subprime industry,

his own dealers are being forced
to issue longer-term loans

with less money down
at higher cost to clients

who are therefore
at greater risk of default.

And these broader lending trends are
clearly terrible news for borrowers,

but to hear him tell it,
it's a great opportunity

for those who buy bad debts
and collect on them.

These people have negative equity
all the way through

and they're not gonna be able to hold
their life together for seven years.

You know the customer.
You know how to collect.

You've got the legal expertise.
What's holding you back ?

That is both inspirational
and profoundly upsetting.

It's like if the song
"I believe I can fly"

merged with the rest
of R. Kelly's life.

Listen, listen... The news,
the news, don't Google that.

Listen, the news that used-car dealers
are predatory is clearly not new.

But it seems these days,
market pressures are forcing them

to be more aggressive and take
more risks, to the point where

we may be getting close
to an industry that looks like this.

CRAZY JOHNNY'S USED CARS

Well howdy there, folks !

Do you need a car ?
You can't afford a car ?

No problem ! Just come right
on down today to Crazy Johnny's !

But don't take it from me. Take it
from my cousin, crazy Jimmy !

Come on out here, Jimmy !

Hello, crazy Johnny,

I love the smell of deals
in the morning !

I got a question for the people
at home, do you have bad credit ?

We don't care !

- Have you filed for bankruptcy ?
- We don't care !

Is your credit so bad that giving you

a high-interest loan will basically
trap you under a mountain of debt ?

We don't give a fuck !

And if you come in today,

we've got a beautiful offer
for you right now, man.

This here is

a pre-pre-pre pre-pre-pre-owned
2003 Kia Optima !

It's aggressively bland.

Jimmy, Jimmy, you gotta tell
the people what it comes with.

I will it comes fully loaded
with four tires, up to one engine,

and a beeping device which emits
a sound that will haunt your dreams !

- Does it come with anything else ?
- It does man.

If you check the backseat,
this car has a fucking baby in it !

There is an actual baby
in this car right now !

I have serious personal reservations
about the situation this child is in !

Don't focus on that,
look this car is worth $2,000.

But we'll let you have it
for zero down,

and just two hundred a month
for the next seven years !

That's nearly $17,000 !

- No no no no !
- Nearly $17,000 !

Don't do the actual math on that !
Try and think of it at home like this:

act now, and this car will affect
every financial decision

you make
for the best part of the next decade !

And that is a crazy Johnny promise !

And the crazy thing is,
this piece of shit car

is actually an opportunity
for Wall Street, too.

But don't listen to me, listen
to our accountant, crazy Walter !

Come on out here, Walter !

Come on out here Walter !

Well, it's true.

If you set aside the human misery
this loan has the potential to cause,

as part
of an over-collateralized security,

this can be sold as a, as a,
as a high yield investment.

Damn, Walter ! That has disturbing
echoes of the mortgage crisis !

The point is, it is so easy for us
to get you in this car,

why, it is almost criminal !

It truly feels like it should be
a criminal activity !

And yet, somehow it isn't.

That's our show ! Thank you so much
for joining us !

See you next week ! Good night !

LAST WEEK TONIGHT
with JOHN OLIVER