WEST BRIDGEWATER, Mass., and NEW YORK — More commentary from
auto loan executives and industry analysts is combining "fiscal cliff" and "recession"
into the same breath since time is dwindling for federal lawmakers to resolve
tax and spending plan differences.

The president of a Massachusetts-based auto loan operation
said if the U.S. in fact does fall off the "fiscal cliff," the ramifications could
"negatively impact the ability of consumers with bad credit to get auto
financing or refinance and existing car loan."

For 12 years, AutoDrive1 has been helping people throughout
New England with damaged credit histories obtain financing before they even arrive
on the lot. Joe DiBiasio is president of AutoDrive1.

"If the country falls back into a recession, we're likely
going to see a smaller number of subprime auto lenders as we did in this past
downturn," DiBiasio said. "Those that do remain are going to tighten their
belts again, and that will make getting a car loan with bad credit all the more
difficult."

Commentary from Moody's Investors Services showed DiBiasio's
concerns about a recession hitting the U.S. to begin 2013 are not without
merit.

"The primary issue that will affect the credit performance
of most sectors of structured finance is the ability of the government to
resolve the budget crisis and avoid automatic spending cuts and tax increases
(the fiscal cliff), which if unresolved would very likely precipitate a
recession," Moody's analysts wrote in a special commentary titled, "Global
Structured Finance: 2013 Outlook."

When a recession hits, DiBiasio pointed out interest rates
usually fall in order to stimulate the economy. And while low rates may be the
result, he contends lenders of all types are going to be more stringent about underwriting,
leaving buyers with poor credit histories in the lurch again like the industry
witnessed in 2009 and 2010.

The latest data from the Federal Reserve also noted how
credit flow appears to be healthy. The Fed indicated that the latest information
available from October showed consumer credit increased at a seasonally
adjusted annual rate of 6.25 percent while revolving credit increased at an annual
rate of 4.75 percent and nonrevolving credit increased at an annual rate of 7
percent.

"People who have damaged credit who were thinking of getting
auto financing or refinancing their current vehicle after the new year may not
want to wait because by then it just might be too late," DiBiasio said.

And if lawmakers manage to reach agreements before a fiscal
cliff fall is sustained, Moody's is upbeat about next year. Absent the fiscal
cliff, analysts said the U.S. economy in 2013 will continue its slow recovery

"Our projection for GDP growth in 2013, which is 1.5 percent
to 2.5 percent absent the fiscal cliff, is sufficient to support stable
performance in many structured finance sectors," Moody's wrote.

Walter Kielholz, an analyst with Credit Suisse didn't
hesitate when asked about whether lawmakers will rectify the fiscal cliff.

Kielholz said in a recent commentary, "It must be solved. I
think the parties will now sit together and try to come up with a solution to
avoid going fully over the cliff. Whether they can agree on all the points
depends very much on how the various branches of government will now work
together on the issue."


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