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A $45,000 Loan for a $27,000 Ride: More Borrowers Are Going Underwater on Car Loans As cars become more expensive, buyers are getting hampered by burdensome loans

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In two years, the [Moron Consumer] signed up for four auto loans, each time trading in the previous car and rolling the unpaid balance into the next loan.

The article could have ended here. As @MarvBear would have told that consumer ... "Drive slow, Pay fast"

Edited by IndyPoolPlayer

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What never ceases to amaze me is the number of people so desperate for their 15 minutes of fame (which actually becomes permanent once on the interwebs) that they will admit to being chronically stupid and incapable of doing simple math.  There is precisely zero reason for the prudent purchaser to be upside down on a vehicle at ANY point of the loan, and this holds true no matter whether it was a $3,995 Yugo or a $100K+ luxobarge. 

 

Rolling balances over is the height of stupidity in the new-car realm.  The failure to pay more than the minimum each month ranks pretty close at putting someone in the infinitely stupid category since the inability to do so means they bought too much car. 

 

Simply reaching 100K miles does NOT mean one has to have a new car.  Properly cared for, they will go MUCH longer than that.  Even two of my vehicles from a manufacturer not noted for longevity are well north of 165K miles, with the XK8 pushing 200K miles.  Admittedly, they were both of a vintage where one no longer needs to pay homage to Lucas, the Prince of Darkness, before starting them.  

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My first experience with a dealership finance manager involved a nice man explaining that I could only have the 1.99% rate that I was quoted by the salesman if I purchased the aftermarket warranty for an additional $2K otherwise 2.99%.  But "not to worry" because he could do me a favor and keep the payment low by extending the loan a few months.  I didn't want the warranty but I did want the 1.99% rate.   During that exchange,  Mr. Nice Guy pretended to give in only to print the docs including cost of the warranty hoping I wouldn't re-read the new docs.  After I pointed out the docs were wrong, his tone became aggressive and he told me that I was "lucky" to get the 2.99% with a bk on my credit.   I eventually left with 2.5% dealer financing that was price matched/reduced to 2.25% by my credit union preapproval and no warranty. 

 

I knew there would be a sleaze level involved with dealer financing but I didn't realize how much haggling would be involved in getting rid of an option I didn't ask for in the first place and duking it out over the interest rate.  I still ended up getting screwed out of an extra $100 or so interest with the higher APR and I like to think I'm literate when it comes to financing.    I can see how someone who is less firm on their non negotiables or doesn't understand all the numbers to begin with could end up in a world of financial hurt.  

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The premise of the headline is flawed.

 

You can still get cheap cars.  More and more people just won't settle for one.

 

I love the brain donors in the article who are curtailing other expenses in order to make their $900/month car payment.  

 

This is more than the lease payment on my 750i, which I did with $0 capital cost reduction (no down payment).

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13 hours ago, cv91915 said:

The premise of the headline is flawed.

 

You can still get cheap cars.  More and more people just won't settle for one.

The issue is exacerbated by the fact that too many people treat vehicles like a fashion accessory as opposed to a tool.  If someone NEEDS a vehicle, then there is no reason to always have to have the latest and greatest thing since sliced bread, complete with all the electronic crap that costs a fortune to repair once out of warran...oh wait, they never get outside of the warranty because they insist on always having something new. 

 

I've got multiple vehicles but also have the means to afford the habit.  But they are not acquired through the buy and trade process...they tend to be a buy and drive until the wheels fall off process and they are kept in good shape.  I had someone last night comment on one of the '03s simply because there are not that many of them being driven on a regular basis and fewer yet that still look like they just came off of the showroom floor.  Add in that the X-Type was not a high-end Jaguar and it becomes more of a comment on the condition of the vehicle.  Those are actually the people who could do well if they didn't insist on buying new...the X of that vintage can be bought in good shape all day long for less than $3500, but because of the leaper on the hood, a lot of people think it was multiples of that amount.  And, since it was built when Ford had a controlling interest, parts are reasonable in cost and availability.  Same thing holds true with the S-Type, which was basically a platform share with the Lincoln LS. 

 

Out of everything I own, only one has a note but it has never been upside down, not even on the day I drove it off of the lot.  And, by keeping the older vehicles, my costs down the road are substantially reduced since the superfluous crap going bad is less than with the new models (from ANY manufacturer)... 

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2 hours ago, centex said:

The issue is exacerbated by the fact that too many people treat vehicles like a fashion accessory as opposed to a tool.  If someone NEEDS a vehicle, then there is no reason to always have to have the latest and greatest thing since sliced bread, complete with all the electronic crap that costs a fortune to repair once out of warran...oh wait, they never get outside of the warranty because they insist on always having something new. 

 

I've got multiple vehicles but also have the means to afford the habit.  But they are not acquired through the buy and trade process...they tend to be a buy and drive until the wheels fall off process and they are kept in good shape.  I had someone last night comment on one of the '03s simply because there are not that many of them being driven on a regular basis and fewer yet that still look like they just came off of the showroom floor.  Add in that the X-Type was not a high-end Jaguar and it becomes more of a comment on the condition of the vehicle.  Those are actually the people who could do well if they didn't insist on buying new...the X of that vintage can be bought in good shape all day long for less than $3500, but because of the leaper on the hood, a lot of people think it was multiples of that amount.  And, since it was built when Ford had a controlling interest, parts are reasonable in cost and availability.  Same thing holds true with the S-Type, which was basically a platform share with the Lincoln LS. 

 

Out of everything I own, only one has a note but it has never been upside down, not even on the day I drove it off of the lot.  And, by keeping the older vehicles, my costs down the road are substantially reduced since the superfluous crap going bad is less than with the new models (from ANY manufacturer)... 

I'm honestly surprised that an X-Type of that vintage is still on the road. I had the car it was based on in high school. It was a babied, one-owner example that I got from a great aunt who was too old to drive. When I got it, it barely had 60K on the clock. That was, without a doubt, the biggest hunk of junk I ever had. When it ran, it was a fantastic car. It handled so well, it had features that were unheard of in a $20K car at the time, and the 2.5L V6 was a hoot to play with....but the electrical, transmission, and just general quality issues (mine had the B-Pillar trim of the correct car on one side, and the trim of the Ford model with different interior lines on the other side) was just too much. No more European Fords after that. I guess it also didn't help that, at the time, The Mother had an S-Type that was also a steaming pile of hooey. 

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2 hours ago, Bad Doctor Frost said:

I'm honestly surprised that an X-Type of that vintage is still on the road. I had the car it was based on in high school. It was a babied, one-owner example that I got from a great aunt who was too old to drive. When I got it, it barely had 60K on the clock. That was, without a doubt, the biggest hunk of junk I ever had. When it ran, it was a fantastic car. It handled so well, it had features that were unheard of in a $20K car at the time, and the 2.5L V6 was a hoot to play with....but the electrical, transmission, and just general quality issues (mine had the B-Pillar trim of the correct car on one side, and the trim of the Ford model with different interior lines on the other side) was just too much. No more European Fords after that. I guess it also didn't help that, at the time, The Mother had an S-Type that was also a steaming pile of hooey. 

I'm at about 165K miles on it...original owner was the elected District Attorney.  I got it with just under 100K miles.  Clutch can be a bit vague, but at least it HAS a third pedal, which is actually how I was drawn to it in the first place.  I put a new headliner in it when I first got it but no other issues of significance since then that don't fall into the normal maintenance sort of category...

 

I also had an '04.5 with a manual that the ex took when we split up...I preferred the '03 to the '04.5 even though the better price had been had on the 'newer' model (which still had the original window sticker in the glove compartment). 

 

Biggest thing I like is the handling in rain...as AWD goes, it is a competent vehicle.  In dry weather, it rides smooth, even at speeds that are a bit north of the posted speed limits... 

 

I've looked at getting more of them when a three-pedal variant shows up on the market, but they tend to be too beat up to justify the purchase even knowing I can get them for next to nothing.  I need a no-rust, no-dent type of exterior to justify leaving the State to make the purchase.  I do what I can to fill my role as a member of The Manual Gearbox Preservation Society ;)

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23 minutes ago, centex said:

I'm at about 165K miles on it...original owner was the elected District Attorney.  I got it with just under 100K miles.  Clutch can be a bit vague, but at least it HAS a third pedal, which is actually how I was drawn to it in the first place.  I put a new headliner in it when I first got it but no other issues of significance since then that don't fall into the normal maintenance sort of category...

 

I also had an '04.5 with a manual that the ex took when we split up...I preferred the '03 to the '04.5 even though the better price had been had on the 'newer' model (which still had the original window sticker in the glove compartment). 

 

Biggest thing I like is the handling in rain...as AWD goes, it is a competent vehicle.  In dry weather, it rides smooth, even at speeds that are a bit north of the posted speed limits... 

 

I've looked at getting more of them when a three-pedal variant shows up on the market, but they tend to be too beat up to justify the purchase even knowing I can get them for next to nothing.  I need a no-rust, no-dent type of exterior to justify leaving the State to make the purchase.  I do what I can to fill my role as a member of The Manual Gearbox Preservation Society ;)

Manual with the 2.5. Now that's a rare breed. Sport Package? 

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16 minutes ago, Bad Doctor Frost said:

 

Manual with the 2.5. Now that's a rare breed. Sport Package? 

Neither of them were Sport.  I looked at a Sport in Austin but the sunroof assembly was all jacked up as were the retractable headlamp washers.  I think it may have been a 3.0l though. 

 

Other advantage to the manual is I usually get to park where I want since so many of the lot jockeys don't know what the third pedal is for, much less know that the collar lifts to get the X into reverse LOL!

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