Cloud's car stuff

Cloud · 10-17-2010, 01:18 PM

I'm pretty amazed at the crap things people are doing with their car loans in general. I'm guilty of this also--in 2001 I bought a new car with my crappy credit and got a subprime 18% loan. With interest, I ended up paying twice the amount of the car. Now I know better.

Even on forums where people are supposedly trying to improve their financial situations, I see people buying too much car (if credit is bad, why are people buying $40K cars?); putting down the absolutely minimum down payment, thus putting themselves underwater immediately, having to buy gap insurance, leasing a car which never lets them have no monthly payments, trading in cars with underwater loans, thereby still paying interest on a car they don't even own. getting ridiculously long loan terms (why would you want to be making payments for six years, for crying out loud?) and focusing too much on monthly payments and not total amount owed. (But I got a sweet ride! and my payments are lower!).

I know I'm lucky in that I've managed to save a decent down payment., my car is not dying (even though it's 9 years old), and that I've managed to improve my credit scores and financial situation enough that I can probably get a decent loan, but I'm still left shaking my head at some of the things people will do to get wheels.

tw · 10-17-2010, 01:48 PM

Quote:

Originally Posted by Cloud

but I'm still left shaking my head at some of the things people will do to get wheels.

I have said this often. If one needs a loan to buy a car, he probably has no business buying that car. I will never understand why people borrow money to buy a car they have no business owning.

xoxoxoBruce · 10-17-2010, 02:44 PM

Because they need the car to get to work and earn the money to pay for the car, which beats sitting at home with no job and no money. Buying a new car is the way to get on the road with minimum cash, especially if you are mechanically challenged.

tw · 10-17-2010, 09:14 PM

Quote:

Originally Posted by xoxoxoBruce

Because they need the car to get to work and earn the money to pay for the car,

Yes, a home equity loan also makes no sense for same reasons. Rare exceptions may exist due to abnormal events. But we are not discussing the abnormal. We are discussing a majority who foolishly and repeatedly buy cars with loans.

Why would the exception need a car loan? To never waste money on car loans in the future. To get out of debt and never need a car loan in the future. An exception.

One can buy a Honda or Toyota for $4000. Why apply for a car loan for a $25,000 car (or a $41,000 Chevy Volt) when the owner can only afford $4000? Because he wants to pay more money for every future car?

Consumer Reports is full of inexpensive seven year old cars that are reliable.

Borrowing money to buy something that does not depreciate makes sense (ie a house). Borrowing money to create an income source makes sense (ie a business). Borrowing money to only remain in debt on something that loses value quickly makes little sense.

Why do so many have balances on credit cards? Same 'need'. Makes so sense. But then many (is it a majority?) also do that mistake.

Ironically (and this never made sense to me), many know this is illogical. And still do it. Why borrow money to almost double the cost of a product?

10-17-2010, 01:18 PM	#1
Cloud ... Join Date: Feb 2007 Posts: 8,360	I'm pretty amazed at the crap things people are doing with their car loans in general. I'm guilty of this also--in 2001 I bought a new car with my crappy credit and got a subprime 18% loan. With interest, I ended up paying twice the amount of the car. Now I know better. Even on forums where people are supposedly trying to improve their financial situations, I see people buying too much car (if credit is bad, why are people buying $40K cars?); putting down the absolutely minimum down payment, thus putting themselves underwater immediately, having to buy gap insurance, leasing a car which never lets them have no monthly payments, trading in cars with underwater loans, thereby still paying interest on a car they don't even own. getting ridiculously long loan terms (why would you want to be making payments for six years, for crying out loud?) and focusing too much on monthly payments and not total amount owed. (But I got a sweet ride! and my payments are lower!). I know I'm lucky in that I've managed to save a decent down payment., my car is not dying (even though it's 9 years old), and that I've managed to improve my credit scores and financial situation enough that I can probably get a decent loan, but I'm still left shaking my head at some of the things people will do to get wheels. __________________ "Guard your honor. Let your reputation fall where it will. And outlive the bastards!"

10-17-2010, 02:44 PM	#3
xoxoxoBruce The future is unwritten Join Date: Oct 2002 Posts: 71,105	Because they need the car to get to work and earn the money to pay for the car, which beats sitting at home with no job and no money. Buying a new car is the way to get on the road with minimum cash, especially if you are mechanically challenged. __________________ The descent of man ~ Nixon, Friedman, Reagan, Trump.

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