Americans And Car Loans

[jyl]

Americans are getting in trouble with car loans . . . predictable, after a couple years of ultra-low rates, auto loans stretching out to 7 years, and shortages of both new and recent-model used cars.

https://www.bloomberg.com/news/articles/2023-03-01/car-debt-is-piling-up-as-more-americans-owe-thousands-more-than-vehicles-worth

Here's what puzzles me: "Today, about two out of 13 people are making monthly car payments of $1,000 or more. For many, there’s no choice: They have few or no public transportation options and need a car to get to work, bring children to school and buy groceries."

Wait, there's "no choice" but to buy a new or new-ish car for payments of $1,000/mo? Ten seconds on the online used car listing site of your choice turns up dozens of 2000s vintage cars for <$5,000. Is it so unbearable to drive a $4,995 2005 Toyota Corolla with 150K miles?

[GH85Carrera]

I used to work with a guy that would get a new car every three years, long before his car was paid for. The ONLY thing he cared about was the monthly car payment. He was terrified of the prospect of having to pay for a car repair.

He just could not fathom my paid for cars and fixing the cars myself, or paying for a mechanic to do the stuff I can't.

I have not had a car payment since 1996 when I paid off my 911.

Yea, I know I am weird. Since 1974 I have owned jut three cars. I still own two of them. I do not count the cars my wife had or has even though my name is on the title. Those are her cars.

[LWJ]

My son said at dinner one time "Dad, we aren't like most Americans. We don't use language that they do."

I asked him what he meant.

He said "Car payment."

I laughed. Yes. I have a 20+ year old toyota. My wife has a 10-15 year old Subaru. I have been shopping for a "new" truck. All seem to be over 15 years old.

Cash is king, baby.

I would absolutely freak if I had a car payment over $1000. And I earn more than most Americans.

Live within your means. Weird. It seems that this message has not been communicated very well.

[KNS]

Originally Posted by jyl

Wait, there's "no choice" but to buy a new or new-ish car for payments of $1,000/mo? Ten seconds on the online used car listing site of your choice turns up dozens of 2000s vintage cars for <$5,000. Is it so unbearable to drive a $4,995 2005 Toyota Corolla with 150K miles?

Puzzling to me as well and I wouldn't buy new if I could find nicely used.

However, I used to work with a gal who was single and did a lot of driving for work, sometimes across the state on lonely stretches of road at very early hours (this was Arizona where cell coverage can be lacking in some areas). She bought a new car every four years or so. She said as a single woman travelling alone she simply did not want to risk a breakdown or being at the mercy of a stranger. I get that.

Other folks, though, just don't have common sense.

[wilnj]

Remember this is an enthusiast-centric forum. Most people have no clue about the basics of maintenance. Yes, that’s on them but modern cars are much too complex for shade tree mechanics.

Even older cars, 20-30 year old cars are complex pieces of equipment. Couple that with the frustrations that come with working on cars that are a collection of sub assemblies, repairs get expensive, quick.

One of the actuators on my Jeep failed. Fairly common failure because of plastic gears. The actuator is about 3 inches off the side of that car, behind a speaker grill that doesn’t come out.

You have to remove the passenger seat and work on your back to change a $30 part. The dealer will charge about $900 for the repair. My solution was to unplug it and go without the recirculating feature of the HVAC system.


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[masraum]

I've/We've never bought a new vehicle. The latest, bought for the missus, was the newest that we've ever purchased. The previous, my boxster, was the most expensive that we've ever purchased (and at the time was our only vehicle). I think the payment on both was ~$400/mo, and to us, that felt pretty extravagant. I don't think we've ever had 2 car payments at the same time.

[stevej37]

Been driving for 54 years and about twenty cars.
Never had a car loan payment.

[masraum]

Originally Posted by KNS

Puzzling to me as well and I wouldn't buy new if I could find nicely used.

However, I used to work with a gal who was single and did a lot of driving for work, sometimes across the state on lonely stretches of road at very early hours (this was Arizona where cell coverage can be lacking in some areas). She bought a new car every four years or so. She said as a single woman travelling alone she simply did not want to risk a breakdown or being at the mercy of a stranger. I get that.

Other folks, though, just don't have common sense.

Yep, in certain circumstances, I guess it makes sense. Even then, it's usually possible to buy a barely used car for less money than a used car. But if you were putting 40k+ miles per year on a car, then it might make sense. And certainly, certain folks or situations (like the lady in the story above) will be exceptions. There's always exceptions.

[matthewb0051]

Originally Posted by GH85Carrera

I used to work with a guy that would get a new car every three years, long before his car was paid for. The ONLY thing he cared about was the monthly car payment. He was terrified of the prospect of having to pay for a car repair.

He just could not fathom my paid for cars and fixing the cars myself, or paying for a mechanic to do the stuff I can't.

.

My sister-in-law is the exact same. I've known her to trade in a vehicle simply because it needed a brake job. And her comment is the same: my payment only went up XX dollars.

She was on my 89yo FIL (her father) recently to get a new pick-up since his was getting old. He has a 2013 F150 that is in great shape but in her mind it's old and therefore needs gone.

My wife calls here the most pretentious poor person that she knows.

[jyl]

I can see always rolling into a new car if you can write it off as a business expense or have some special need (drive long distances, disabled, etc) or have enough money that the cost doesn't matter. I think most people are not that "special".

[masraum]

Originally Posted by jyl

I can see always rolling into a new car if you can write it off as a business expense or have some special need (drive long distances, disabled, etc) or have enough money that the cost doesn't matter. I think most people are not that "special".

Yep, those fit into the exceptions category.

[LWJ]

On the DIY / maintenance piece, I feel sorry for the large majority that is "wrench handicapped."

I was extraordinarily proud of my wife when she fixed some stuff lately. One was a Sony 300 disc CD player. It needed a new belt for $.80 or similar. Youtube held her hand. VERY impressive. That spurred another fix. Don't remember what. But, fixing crap is empowering. She got a kick from it. And we save $$$. A win!

[stevej37]

^^^ I'm sure Youtube has saved me mucho dollars over the years....and it gives me a lot of satisfaction when the job is finished.

[rfuerst911sc]

Mine and the Mrs. fleet of vehicles are 1999/2001/2002 and 2010 . All run fine and obviously paid for . I refuse to make a mortgage payment for an automobile . Being retired we don't need the latest and greatest. Just reliable .

[Tobra]

Same deal with credit cards

I have screwed over more than one car dealer who thought they were going to make their money on the ridiculous financing they thought I needed to use on a note I was going to pay off within a week or two.

[Seahawk]

Originally Posted by jyl

I can see always rolling into a new car if you can write it off as a business expense...

I buy new trucks because of farm use and tax write-offs...I depreciate them on a schedule based on where we are with the farm tax posture and then I pay off the loan, which is also deductible.

I keep the 1/2 tons a minimum of ten years. My 2014 Tundra will hopefully take me to the end of the farm ownership, we'll see. It stays parked a good deal of the time these days. So much the better.

When we sold my wife's 4Runner we bought used and then ran for 15 years and over 300k miles, we got a near zero interest loan on a 2020 4Runner that I just finished paying off. There was no reason to pay it off early with investment funds that were making a minimum of 5x the loans interest rate.

I hate interest payments unless they pencil out. The "monthly payment" metric is anathema to me.

[Tobra]

I like the no interest come on they do sometimes.

We bought an SUV that had this no payments or interest for 18 months deal. Took my downpayment, put it in a CD, then paid the note way down right before the interest started to accrue

[scott540]

Had this talk with a girl I know.
They just bought a new grand wagoner.
I asked what happened to the Yukon, it was nice. "Well it was a 2017 and just passed 100000 miles so it was starting to need stuff".
These are the same kind of people that give me crap because we drive expensive cars.
A 2012 range rover and a 2014 cls63. Yeah, we buy them 5 or 6 years old for cash and if we have to put maybe a couple grand into them every year. Still better that 1200 a month for 7 years.

[flatbutt]

We had neighbors back in the day that bought a new car so frequently we quipped that they traded it in as soon as the ash tray was full. They countered that it was to maintain the equity in the new car.

Remember the phrase "I'm house poor"?

[stevej37]

There are also people that buy new cars that have the money to do so without a worry.
Why buy used when you can get new?

I'm not speaking for myself....I am half Dutch.