re: Americans owe more than ever on their underwater car loans

The stealerships make their money by extending people usurious loans. They make this both from bullshite charges baked into the bill of sale and they also get kickbacks from the lenders. The bigger the loan (and the higher the interest rate) the more they make. Stealerships and the people who operate them are a kind of criminal if you ask me for unethically preying on the good hardworking Americans who are their customers.

I blame it on people buying cars that should be out of their budget, but they get 96 month financing to make the monthly payment work.

Sales and finance guys at the dealership got you into the payment you wanted with minimal down payment. But now you're upside down from the get go because that little down payment may not have even covered the sales tax, much less a few grand worth of depreciation as soon as you drove off the lot. And with the loan stretched out over 8 years, you never catch up enough to get positive equity because you're not paying off principal balance quick enough to catch up to the depreciation.

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The stealerships make their money by extending people usurious loans. They make this both from bullshite charges baked into the bill of sale and they also get kickbacks from the lenders. The bigger the loan (and the higher the interest rate) the more they make. Stealerships and the people who operate them are a kind of criminal if you ask me for unethically preying on the good hardworking Americans who are their customers.

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1. Get your own financing lined up through your bank or credit union before you even step foot in the dealership. Unless there's a manufacturer promo financing at a below market interest rate.

2. Once you've agreed on the vehicle price, tell them you don't want their extended warranty or another other BS add-on that wasn't explicitly listed on the vehicle sticker. Agreed upon vehicle price, TT&L, and thats it or you walk out.

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And with the loan stretched out over 8 years, you never catch up enough to get positive equity because you're not paying off principal balance quick enough to catch up to the depreciation.

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I mean, you eventually catch up in year 6 or 7, but yea if you're buying new every 3 or 4 years you are cooked.

Their mistake is trying to sell it or trade it in.

Just ride it out and pay for it. You aren't actually underwater unless you try to get rid of it. (from a functional standpoint)

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My daily driver still has a cassette player in it.

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I've been wondering for a long time how people are affording what they're driving. I guess the answer is they're mostly not. It seems like 75% of people in my zip code have at least 1 (if not 2) < 3 year old luxury trucks or SUVs in the driveway. Life is expensive enough with our 10+ year old vehicles, I can't imagine adding basically two additional mortgage payments on top of it.

You'd think so. But the insurance premium on my 8 year old F-150 is damn near the exact same as what the premium is on our 24 Expedition. It's frickin ridiculous. That's with two clean driving records and Goosehead comparative insurance rates.

Still driving my 2013! Was paid off in 2015.

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Lots of people out their that can only really afford a Camry but have a 80k car.

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Well you can probably get an $80k camy these days

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Think they top out about 36K, most under 30K new.