patrick.net

I think it's a combination of inflation and average buyers having less money.

Why else would people choose to pay interest to someone?

72 months is crazy, for a car.

joshuatrio says

72 months is crazy, for a car.

From the article

Long-term loans make costlier cars seem more affordable, but leave buyers with higher overall costs for the car and more time owing more than it is worth.

Underwater on a car, too?

In some cases, it's the manufacturers' way of passing along the cheap money they received from the FED. 0~1% financing has become the norm. I'd rather pay cash and get a lump sum discount equivalent to the interest discount over 5yrs, but that is not an option, so financing may be the only way to get a slice of that discount.

APOCALYPSEFUCKisShostikovitch says

If you have to borrow money to buy a car, take the bus.

You can go to any police auction and drive away that you can keep going for a few months at least for a couple of hundred bucks and the cost of gas.

Best car I ever had cost me well less than $1000 - had a GM 350 with Posi-Traction and less than 50K on it.

Fucking thing roared and cruised easily around 100 MPH with no stress. Fucking car.

Lost I know I'll find it again when the time is right. It was, by every measure, the Apocalypsmobile.

You're right. Reliable, simple and lots of cheap parts lying around. Some still have the bumper bars. Useful for mowing down the zombies. Also if you get one with an interior partition and no rear passenger door release, you can throw hog tied investment bankers in the bank and taunt them about the skull raping they're about to receive.

With low interest rates it doesn't really matter what the repayment term is.

2% on a $20,000 loan is $33 a month in interest starting out.

Taking the bus is such a shitty experience in most areas (adding an hour or two to the trip) that the $30 is more than worth it.

Another reason I want to move back to Tokyo. So nice not having to deal with car BS at all.

joshuatrio says

72 months is crazy, for a car.

Paying so much for a car that has no real value that matches the sticker on the window, is crazy. Especially when you have to stretch it out 72 months to pay for it.

But if you have good credit, and you could afford to buy that car anyway cash or not. Then 72 months with 0 interest is pretty sweet. At least the only money you're out, is only what you paid into it.

What's sad though, is people making under 40K buying cars that cost over their yearly salary.

at the end of 2011 when I bought my Mazda CX-9 I got 62 months, at 0%. I loved that car, it was like a sofa on wheels. But the gas needle moved like an animated gif.

I paid on it for about two years, at the time last year around August, I decided to trade it in, I was burning over $70 a week in gas. And I needed a new second car for my wife.

I traded it in to lease Mazda3 and Mazda CX-5 no money down, and no other fees. Both together were about as much as a monthly payment I was paying on the CX-9. I walked away from the CX-9 not owing anything. I thought all things being equal, I would be ahead of the game, even losing the two years I already paid, but I don't have to pay 3 more years. Also I listened to everyone harking about how great leasing cars are.

Well let me tell you, and you heard it here first, if you've never leased a car.

It's a rip off, the insurance company stuck us on each car, double what I was paying for the CX-9. They claim, people don't care of lease cars. That's not the insurance companies problem, what do they care if someone never changes the Oil? The car isn't being insured for mechanical stuff.

I was paying $2,249 every 6 months. Until Allstate called us last week and offered us 6 months for $629.

I guess it's true what they say... You don't chose Allstate, they chose you. My wife, told me they have always been over a 1,000 bucks more expensive than any insurance company.

So now my monthly nut is almost back to where it was with just one car. I'm no longer commuting and have been working from home after about two weeks after I traded the car in for the two. Which the whole impetus was because of gas and the wife needed a car.

Now that I'm home again, she could use any car she wants at anytime.

Now in about two years, we wont have any car, and will have to return the leases.

I think I'll save up and pay cash for some decent used cars, under $5K if there's STILL such an animal.

I'm so done with paying near 1K a month between car notes, and insurance that is free to charge at will what ever they feel for what ever reasons.

The insurance company before Allstate we had Progressive, and they put our daughter on the insurance because she has a license. We were paying $3500 every 6 months because of her. So I went out and bought her a cheap used car, figuring the insurance on it would be a hell of lot cheaper than a brand new car. But because I was a cosigner, and we were paying on a loan for the car. They insured her at the highest rate of the most expensive vehicle. So between paying $320 a month for her car and about $500 additional insurance, that was another $800 a month. So basically I tried to get a cheaper car to lower our nut, but it doubled it. So I paid it off last month just to get rid of those payments, so my daughter could then just get the cheapest liability, and our insurance company would then insure us with out gouging us because of our lineage.

CaptainShuddup says

Then 72 months with 0 interest is pretty sweet. At least the only money you're out, is only what you paid into it.

What's sad though, is people making under 40K buying cars that cost over their yearly salary.

Agreed (x2), and unfortunately, often (but not always) the cars being offered at 0% are not going to be in very good shape in 72 months!

My own smog generator with a hefty loan rather than smelling like bus farts?

What would Al Gore do?

Order a dozen.

It was almost stupid not to take as long as loan as they will give you with some of the unsolicited offers I've received. Interest rates were between 0 and 1.49% until recently, now it's between 0 and 1.99%.

I strongly prefer to pay cash, but with rates that low, why not? Why should I burn my cash that is doing better than that?

CaptainShuddup says

It's a rip off, the insurance company stuck us on each car

Why didn't you switch insurance companies on your own? Seems like there's more to this story than you're telling, because I've never seen a different insurance rate for owned vs. financed vs. leased.

It's really hard to know what was going on here without a breakdown of liability vs. collision vs. comprehensive and any other insurance you had.

The rest of your story seems like incompetence vs. the insurance company gouging you. Why would you buy another car to save on insurance?

CaptainShuddup says

It's a rip off, the insurance company stuck us on each car, double what I was
paying

That's something new car buyers almost NEVER factor in when deciding to buy new. It is necessary to carry full coverage insurance on a financed car. Also, folks think that maintenance is FREEEEE, well the dealer bundles into the price three oil changes, 2 light bulbs, and maybe a set of brake pads AND THAT'S IT on your "free" maintenance. A car like this will have serious sludging problems before 100,000 miles, yet with proper care have a life expectancy of 250-300,000+ miles.

The newer cars get, the more complicated they become. 10 years ago, clients would pay four hefty figures to go through and recondition a 1984 car with potential to drive another 100-200,000 miles. Now, people that scoffed at paying $600 to repair such a car during the RE bubble (I can get a NEW car for ONLY $300/month!) are finding that their uber-computerized 2006 needs $600-1500 repairs every few months; they are getting cheap oil changes, blowing up engines, and selling the car broken at a loss, on 8 year old European luxury marques!

However, if people bought cars rationally and logically, the new car market would collapse. New cars depreciate like an ice sculpture when driven off the lot; the longer the term, the more upside-down they'll perpetually be.

corntrollio says

It was almost stupid not to take as long as loan as they will give you with some of the unsolicited offers I've received. Interest rates were between 0 and 1.49% until recently, now it's between 0 and 1.99%.

I strongly prefer to pay cash, but with rates that low, why not? Why should I burn my cash that is doing better than that?

I don't understand this.
I have cash getting paid 0%.

I also have an old car and won't change it.
But if I had to change it, I would pay cash.
And if I wanted a car, and didn't have cash, I would save first.

corntrollio says

CaptainShuddup says

It's a rip off, the insurance company stuck us on each car

Why didn't you switch insurance companies on your own? Seems like there's more to this story than you're telling, because I've never seen a different insurance rate for owned vs. financed vs. leased.

Geiko wanted 200 more and Allstate wanted over a grand.

AllState recognized that my daughter got her own liability after I paid her used car off. So they called me and offered us 620 for 6 months, Geiko and Flo still wanted those higher premiums, because they saw we were good for it for the 6 months we paid over $600 a month.

APOCALYPSEFUCKisShostikovitch says

When I buy cars, used or new, I just pay cash, and buy in Feb when everyone is looking for money.

Don't know if I would buy in February. Usually buying any time near tax returns is a losing proposition, especially for used cars. That's when car dealers are trying to make money off of stupid people who have big checks in their pocket.

Heraclitusstudent says

I have cash getting paid 0%.

You should learn how to get more than 0%. It's quite easy to do.

CaptainShuddup says

I think I'll save up and pay cash for some decent used cars, under $5K if there's STILL such an animal.

Vintage Ford Escorts are way cheaper than that! Unless it drops a valve seat, you can run it for as long as you want for cheap.

corntrollio says

Usually buying any time near tax returns is a losing proposition, especially for used cars. That's when car dealers are trying to make money off of stupid people who have big checks in their pocket.

I used to work in the sub-prime auto loan division at a big big bank. I can confirm that tax return time is a crappy time to buy a car.

zzyzzx says

the sub-prime auto loan division

hahaha

This is all just more of people mistaking wants and needs, correct?

Japanese imports are tanks at this point...theyll run for damn near ever.

So just thinking...family of four...maybe a Toyota Camry? I know when I was growning up we had a Ford sedan and a Dodge smaller station wagon. I know its fashionable for families to drive unwieldy SUV's but truth be told, no one *needs* a card like that.

So I looked up KBB....a used 2010 Toyota Camry with 50,000 miles on it...that should theoretically go 300,000 miles and last through jr's college years...is all of 12-13K.

So there ya have it. A family car that will last forever and costs 1/4 of the US per capita income. If pops needs a commuter vehicle, theres a plethora of fine import subcompacts that get 35-45 mpg and cost a handful of thousands of dollars, will run forever, and cost minimal to maintain.

So yeah, I think idiots(and truly they are idiots) are the ones getting 6 and 7 and 8 year loans. If you need a big boy car, I have no issue with someone taking a 3 year loan at sub 3% interest rates. But if you gotta push it out to 6-8 years, I think you are not the big boy your car might indicate you are.

Wants.

Needs.