Differences in between securitization and selling used cars

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"Loans are just like used cars. If you see an ad in the paper for a used car, you have to wonder, why is the owner selling it? Maybe there is something wrong with the care that is hard to see. As a result, when you approach the seller, you will want to offer a very low price to make up for any defects. Instead, you could buy the used car from a dealer. The dealer offers a warranty on the car to protect its reputation. It is safer to buy from the dealer. In this regard, selling a used care through a dealer rather than directly is just like selling loans through securitization rather than one by one." Do you agree, disagree, or agree in part with this statement? What similarities and differences do you see between securitization and selling used cars?

Reference no: EM13815157

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