- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Article: "Record number of car buyers 'upside down' on trade-ins"
Posted on 11/28/16 at 7:57 am
Posted on 11/28/16 at 7:57 am
LINK
quote:
The wave of easy credit and longer auto loans has left a record percentage of consumers trading in vehicles that are worth less than what they owe on their loans.
In auto finance parlance, these folks are underwater, or upside down. They already are affecting the market as automakers boost incentives and subprime lenders monitor their delinquency rates more closely.
So far this year, a record 32%, or nearly one-third, of all vehicles offered for trade-ins at U.S. dealerships are in this category, according to research by Edmunds.com. When these people go to buy a new vehicle they must add the difference between their loan balance and the vehicle's value to the price of the one they want to buy.
quote:
The average new car loan is for 68 months, according to Experian Automotive, which tracks the auto finance market. But subprime borrowers, generally those with FICO credit scores in the low 600s or lower, are borrowing over an average of 72 months, or six years.
While those loans reduce monthly payments, they also mean that the buyer's equity, or the portion of the loan principal paid off,grows more slowly than the vehicle depreciates.
quote:
This is happening as the average selling price of a new vehicle is near a historic high of about $34,000. Some of that increase is driven by consumers' preference for larger, fully equipped pickups, SUVs and crossovers.
quote:
Moreover, leasing, which has reached record levels of more than 30% of all vehicle sales, has grown more popular for several years.
Already, especially in segments such as subcompact, compact and midsize cars, used car values are falling as a wave of 3-year-old models are returned by lessees. This increased supply is pushing down the price dealers are willing to pay for them at auctions.
Posted on 11/28/16 at 7:58 am to GetCocky11
John Olivier did a fantastic piece on this
Posted on 11/28/16 at 7:59 am to GetCocky11
Of course there are.
This is what happens when you buy cars you can't afford with no money down and 9 years to pay for them with double digit interest rates.
Vehicles are worst investment a human can make.
This is what happens when you buy cars you can't afford with no money down and 9 years to pay for them with double digit interest rates.
Vehicles are worst investment a human can make.
This post was edited on 11/28/16 at 8:00 am
Posted on 11/28/16 at 8:01 am to TIGRLEE
quote:
Vehicles are worst investment a human can make.
Indeed.
And I couldn't imagine paying one off for 6 years.
Posted on 11/28/16 at 8:01 am to GetCocky11
I was offered a 40k loan and 7 years to pay it off by my credit union. My career is going to trend up, but I only make like 55k a year, that's insanity to me.
Posted on 11/28/16 at 8:01 am to GetCocky11
Never buy a vehicle that you can't pay for with cash.
Posted on 11/28/16 at 8:02 am to Mir
quote:
Never buy a vehicle that you can't pay for with cash.
Posted on 11/28/16 at 8:03 am to TIGRLEE
quote:
Vehicles are worst investment a human can make.
absolutely.
You should almost never buy a vehicle that you can't afford to pay off immediately with cash. Its a depreciating asset.
If you can get 0% finance and have cash making money in a liquid investment, sure.
But that is not what is happening.
Posted on 11/28/16 at 8:03 am to TIGRLEE
I never understand this. I always wondered how those thousandaires drove around in 80K vehicles. I always buy my vehicles one year used. Let someone else eat all that depreciation.
Posted on 11/28/16 at 8:03 am to GetCocky11
quote:this proves my theory...this country is slowly being overrun by dumbasses.
Moreover, leasing, which has reached record levels of more than 30% of all vehicle sales, has grown more popular for several years
Posted on 11/28/16 at 8:04 am to Mir
quote:
Never buy a vehicle that you can't pay for with cash.
Lulz. Maybe 50 years ago this was good advice, but you have fun with a 2k car and all the bills that go with it.
As long as you negotiate a good price that you can afford, there is nothing wrong with 1 to 2 percent interest for 3 or 4 years. Don't go full idiot on the other side.
This post was edited on 11/28/16 at 8:08 am
Posted on 11/28/16 at 8:07 am to bigrob385series
quote:
quote:
Moreover, leasing, which has reached record levels of more than 30% of all vehicle sales, has grown more popular for several yearsquote:
this proves my theory...this country is slowly being overrun by dumbasses.
As with most things, there are cases where leasing makes sense.
However, if you're leasing just to get into the nicest possible vehicle that you wouldn't be able to afford otherwise...then that is not smart.
Posted on 11/28/16 at 8:08 am to GetCocky11
The most striking thing about this isn't the loans. It's the fact that the average price of vehicles starts at 34,000 dollars. That's ridiculous and I bet is almost double what it was just 15 years ago.
Posted on 11/28/16 at 8:09 am to TIGRLEE
quote:Why would anyone buy a car as an investment?
Vehicles are worst investment a human can make
I buy them because I like where they take me and how. So what if it's a 5 or 6 year payoff?
They are an expense of living. Just like your depreciating smart phone. Or those homeowners who find their house vastly depreciated after the market changed but stil make the payment because they gotta live somewhere.
I'd finance one for 10 years if I wanted it.
Posted on 11/28/16 at 8:09 am to BigPerm30
quote:
Let someone else eat all that depreciation.
Not to mention what a $500 a month note does to the buying power of a middle class household.
Posted on 11/28/16 at 8:10 am to GetCocky11
Protip: don't buy new cars.
Posted on 11/28/16 at 8:11 am to theunknownknight
Thank you unknownknight for underlying the biggest problem.
Average MSRP is 34k and I bet half you frickers dont have 34k in liquid cash just sitting around somewhere.
This goes hand in hand with wage stagnation, shite job growth, and foreign visas killing white collar jobs.
Average MSRP is 34k and I bet half you frickers dont have 34k in liquid cash just sitting around somewhere.
This goes hand in hand with wage stagnation, shite job growth, and foreign visas killing white collar jobs.
Posted on 11/28/16 at 8:11 am to BigPerm30
Used vehicles don't depreciate for the car dealer (like they used to). Just the one trading in.
User cars have become a huge rip off.
User cars have become a huge rip off.
Posted on 11/28/16 at 8:13 am to HempHead
Meh. I recently got a new car because I wanted zero chance of flood damage. I picked up a vehicle I can easily put 140k miles or so on for 23k. I'll have that thing paid off before all the warranties expire, and continue making payments to myself for a couple of years after so I can be ready for when it bites the dust.
In my opinion, as long as you aren't going insane price-wise, new cars can be a good way to go.
In my opinion, as long as you aren't going insane price-wise, new cars can be a good way to go.
Popular
Back to top
Follow TigerDroppings for LSU Football News