Americans And Car Loans

[stevej37]

When video cassette recorders first came out for sale, I had a friend who rented one with no intentions of buying it. If I remember right the monthly payment was $65 from a Rent-to-Own store.

He rented it for a few years at that rate.

[john70t]

Originally Posted by GH85Carrera

He said he would not sell it outright, only sell it on his loans. He had a device to remotely kill the starter and locate it. He said he has sold that truck several times, the owner misses a payment and he repossess it.

This reference was posted on another website but every SE Michigander remembers the jingle "Mel Farr, superstar, for a far better deal"

https://www.crainsdetroit.com/article/19991115/SUB/911150887/mel-farr-sued-over-car-disabling-device
November 15, 1999 12:00 PM
A separate complaint accusing Farr of fraud and violating the Michigan Consumer Protection Act was filed on Nov. 10 also in Wayne County Circuit Court. A Farr representative had no comment.

The 14-franchise group installs the electronic device, called ``On-time,'' on every vehicle financed through its Triple M Finance Co., a sub-prime finance company.

Last summer, former Detroit Lions star Mel Farr Sr., the owner of the nation's largest black-owned business, drew negative media attention after two customers filed lawsuits alleging that the electronic devices shut off their engines while they were in traffic. Also, Farr was criticized for charging customers interest rates of more than 20 percent.

[flatbutt]

I had to borrow in order to buy my '06 Taco as I was at the end of my kids college tenure. When I finished paying off that loan, I continued paying myself the same amount every month. When that truck finally rolled over and died, I had accumulated enough to buy the '20 with cash.

[RANDY P]

Originally Posted by john70t

I did the math on this one, at $289/mo, 29.99% interest @ 7 years she paid $10,350 for the car.

If for some reason the rate was lower that means she paid even more than $10.35K

Absolute insanity, and she deserves what she gets.

rjp

[GH85Carrera]

Back in 1995 when I bought my 85 911 for 20K I had my money earning good money, and my credit union gave me a very low cost loan. They said the 20K was loan value for the car. At the time, I had zero debt, our house was paid for, and I did not owe anyone anything, and I figured a toy was a good thing to buy.

I paid off the loan in 12 months, and left my money invested. I have driven that same 911 to 41 states and Canada. I have done well over 100 autocrosses in it, been on Laguna Seca at max speed, Roebling Road, Charlotte superspeedway, Halett, and Eagles canyon in Texas. I won first place in the 2021 Guthrie car show in the category. I have endless house of fun in the car, and still feel a tug of love every time I look at it in the garage, and even more when I fire it up and drive. I have personally put over 110,000 miles on it.

[Bill Douglas]

When I was a 15 year old school boy I bought a brand new Honda 125 on credit. What possessed me to do that I don't know.

But it put me off buying things on credit for life!

Other than buying houses I think I've paid cash for everything since.

[hcoles]

At some point we went from can-I-afford-this to I-deserve-this. I exist therefore I deserve to drive a nice car.

[VenezianBlau 87]

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.

Two of my best buddies do the same thing with high end pickups (this is Georgia). It's all about the payments. Great guys but I couldn't sleep at night living like that. Not about fear of car repairs as they are better than me at complex repairs.

[GH85Carrera]

Originally Posted by Bill Douglas

When I was a 15 year old school boy I bought a brand new Honda 125 on credit. What possessed me to do that I don't know.

But it put me off buying things on credit for life!

Other than buying houses I think I've paid cash for everything since.

The very day I turned 16, I got my driver's license and a real W2 job shortly after. I paid my dad back for the $600.00 interest free loan he provided for me to pay for my car. When I had that paid for, I wanted to establish some real credit.

Dad co-signed a loan at a bank for me to buy a $1,000 stereo system. 4 Advent speakers, Dual 1218 turntable, and JVC quadraphonic amp that was huge, and other bits. I paid that off in 12 months.

A year later I bought a brand new 1973 Super bug. $2,700 and I paid that off in 12 months. I traded that in for my 1974 914 2.0 that I custom ordered to fit what I wanted. That took 2 years to pay off. It was the last new car I have ever bought for me. We did buy my wife a 2017 Macan but no loan, and it is her car, even though my name is on the title.

My business does have a loan on our company airplane. The loan is way less than the equity we have in the airplane. It is just a work truck, and gets us to the projects to make money. It is not used for fun, it only gets started when we have a client paying the cost of running it. It is a business asset.

[Arizona_928]

Originally Posted by RANDY P

I did the math on this one, at $289/mo, 29.99% interest @ 7 years she paid $10,350 for the car.

If for some reason the rate was lower that means she paid even more than $10.35K

Absolute insanity, and she deserves what she gets.

rjp

Predatory car loans are sleazy.
But we all believe in capitalism.

[MMARSH]

Serious Question. Obviously the woman above with the ridiculous car loan, doesn't make alot of money and has horrible credit.

But what exactly is living beyond your means....if you bring home 15K after taxes, have a 6 month emergency fund sitting in the bank and continue to add to it every month. Who cares if you have a $1500 car payment....they aren't living hand to mouth.

[VenezianBlau 87]

We all have different levels of risk/reward conditions with which we're comfortable. I wanted to retire early and that controlled my decisions most of my career. And my Dad was super-thrifty. Hard to shake that pattern of behavior when it's not necessary though.

[Alan A]

Originally Posted by Arizona_928

Predatory car loans are sleazy.
But we all believe in capitalism.

They build in repo costs.

[wdfifteen]

I had two uncles, one on my mother's side and my dad's brother who both bought a new Oldsmobile every two years. One of them could afford it, the other made car payments his whole life.
I haven't made payments on a car loan since the early '80s, but once I started my business my vehicles were essentially free, so that doesn't count.

[MMARSH]

Originally Posted by wdfifteen

I had two uncles, one on my mother's side and my dad's brother who both bought a new Oldsmobile every two years. One of them could afford it, the other made car payments his whole life.
I haven't made payments on a car loan since the early '80s, but once I started my business my vehicles were essentially free, so that doesn't count.

Thats my Question....So your saying if you make car payments, you can't afford it? What if your discretionary or play cash after your obligations, savings, future retirement ect is the amount of a car payment every month....friend of mine makes a lot of money, he and his wife lease a new M series BMW every 3 years. Those lease payments are nothing to him. They both just like having new cars every few years ....he also has a truck that has 185K on it for towing his track bikes and trailer.

[rfuerst911sc]

There is nothing wrong with a monthly payment as long as you stay within a budget . Over extending is when people can get into trouble . Many folks are hard working but even coming up with 5k to pay cash for a vehicle is in the hard pile . But they need reliable transportation to earn the $$$ to keep a budget .

But in that scenario it would be crazy to go buy a 50k car on a loan . At least in my opinion . But everyone has the right to do what they feel is needed for their situation . There is no fit all answer .

[Seahawk]

Originally Posted by MMARSH

Thats my Question....So your saying if you make car payments, you can't afford it? What if your discretionary or play cash after your obligations, savings, future retirement ect is the amount of a car payment every month....friend of mine makes a lot of money, he and his wife lease a new M series BMW every 3 years. Those lease payments are nothing to him. They both just like having new cars every few years ....he also has a truck that has 185K on it for towing his track bikes and trailer.

I have no issues with car loans/leases in the least, especially if the people getting the loans are fiscally aware and driving a new car makes them happy. Life is way to short to not fund those things that are of value in your life.

No finger pointing on my end: I have horses FTOG, the single dumbest fiscal choice on the planet earth. Owning horses makes a car payment look like couch money.

[Dantilla]

One of the best things my Dad did for me was refuse to co-sign a loan on a car, and explain why.
I was pretty young & stupid to consider it.

Thanks, Dad.

After I bought my first car, with cash, he was proud of me. Bought me a set of four new tires for my birthday.

Thanks, Dad.

[red 928]

Originally Posted by 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?

Oh yeah?
well lets see you try to get a tesla S
for under a grand a month.
Besides, spending a grand is better
than spending $200 on gasoline!

the TV commercials told me so.

[red 928]

Originally Posted by GH85Carrera

Wow, so for the next 7 years she will "get" to pay $24,276 for that POS car. No way it will last that long.

How about the really smart people who take
out a home equity loan to buy a car?
That way they can make payments on the car for 30 years.
Even LONGER if they continue to refinance and draw out equity.
If they play their cards right, a car loan could last a lifetime
and they could end up paying for a dozen cars at the same time!