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re: 40% of Cars financed since 2022 are underwater
Posted on 11/18/24 at 12:55 pm to John Barron
Posted on 11/18/24 at 12:55 pm to John Barron
quote:
The economy is a house of cards
Its just waiting to collapse, Will not take much.
1
Posted on 11/18/24 at 12:55 pm to ksayetiger
quote:
Good lord!! I knew it was high but 2/5? Damn
Not as much money involved, but those are higher red ink rates than the mortgage crash of 2007-8.
Posted on 11/18/24 at 12:55 pm to Bard
quote:
he told me he could sell his generic SUV crossover for twice what he paid for it if he needed to.
quote:
callingbullshit.meme: That was likely true a couple of years ago, but that ship has long sailed.
twice the amount he paid is absolutely an exaggeration.
depends on the SUV it may be worth at least a little more.
I know a couple people who recently traded vehicles 2-3 years old and got what they originally paid as trade in.
Posted on 11/18/24 at 12:56 pm to John Barron
quote:
financed since 2022
This isn’t really surprising. Years 1 & 2 your payments to principal don’t normally keep up with the interest rate and depreciation. It’s been like that for over a decade.
It’s the reason everyone that finances should get GAP.
The issue is that just the last few years the interest rate for the loans has risen. To keep the notes down they are extending it out multiple years. So where someone used to get a 4 year loan, now it’s 8.
This post was edited on 11/18/24 at 1:07 pm
Posted on 11/18/24 at 12:57 pm to John Barron
When I bought my Ridgeline last February a guy in the sales stall next to me agreed to pay $1200 a month for 84 months for a Pilot Elite with gold HPD package. I asked my sales guy why it was a much. He said he was upside down in his trade by $20K. I was perplexed on how he could get financing. He said anyone with a pulse can get car financing today.
Posted on 11/18/24 at 12:57 pm to Bard
quote:
With discussions of 9 and 10 year loans. Along with that there has also been discussion of 50-year home loans.
The American consumer is gleefully allowing themselves to become a new form of permanently indentured servant to multiple owners.
I got a 5 year loan and paid it off early. I'm glad I did it before the pandemic (not that I knew one was coming), but I would have paid double the interest rate if I got the same car today compared to when I got it in early 2020. Also, I probably wouldn't have the same choice I did back than, as inventory is way down compared to pre pandemic.
edit: I don't think I was ever underwater, it did help that I put a downpayment on it and bought used.
This post was edited on 11/18/24 at 1:00 pm
Posted on 11/18/24 at 12:57 pm to OU Guy
quote:
What do you think the percentage is of owners underwater as soon as they leave the dealer lot? Probably 98% at least
If no down payment is made, yes. I have no clue, historically, what percentage of people put significant down payments down on new cars, nor do I know what the average amount of the down payment would be.
If 40% of people "underwater" is atypical, I'm guessing it's because a lot more people are putting no money down.
Posted on 11/18/24 at 12:57 pm to OU Guy
quote:
What do you think the percentage is of owners underwater as soon as they leave the dealer lot? Probably 98% at least
You're looking at this assuming the debt from the car they financed is the only debt. About a quarter of trade ins have negative equity.
People are financing vehicles falling fast in value at artificially-inflated prices AND refinancing old debt at higher rates over a longer period of time.
This is not sustainable and it doesn't take into account potential negative externalities like a car wreck (underinsurance and lack of GAP) or an economic downturn.
I made a thread on this recently.
Posted on 11/18/24 at 12:58 pm to TJack
quote:
100% of King Ranch owners purchased in 2022 are underwater.
Yeah. I'm a complete idiot about cars, but I feel like a genius because I bought a lot less vehicle than I could afford in 2021 - and a Toyota 4Runner at that. It costs a little more than half what my colleagues paid for their Teslas, BMWs, Tahoes, F-150s, and Yukons.
If I keep this thing from being wrecked or flooded, I should not need to replace it for at least 8 years. From a reliability standpoint, it's nearly bulletproof. I find the basic, nearly tractor-like feel to that ancient design charming. It has an old naturally aspirated V6 that's been in production for 20 years. The transfer case is manual and very basic - it even vibrates a little sometimes because it's that old school setup. The automatic transmission has been in production for over two decades. There's very little modern tech in that car.
And it's a dreary grey/silver color so it's perfect for my personality.
This post was edited on 11/18/24 at 1:00 pm
Posted on 11/18/24 at 12:58 pm to THRILLHO
quote:
If 40% of people "underwater" is atypical, I'm guessing it's because a lot more people are putting no money down.
And thinking they can afford as much car as they can get a loan on.
Posted on 11/18/24 at 12:59 pm to RogerTheShrubber
quote:
Its just waiting to collapse, Will not take much.
and somehow the MSM and the Dems will blame Trump.
Posted on 11/18/24 at 1:00 pm to John Barron
So, if I wanta buy a 22 used car I can't get a good deal because the lots don't have repos?
Posted on 11/18/24 at 1:01 pm to John Barron
This makes me happy that my wife and I's cars are paid for and done.
Now we don't have anything fancy and I'd like a bigger truck but, na, I'm good till this shite settles down more.
Now we don't have anything fancy and I'd like a bigger truck but, na, I'm good till this shite settles down more.
Posted on 11/18/24 at 1:01 pm to catholictigerfan
quote:
and somehow the MSM and the Dems will blame Trump.
I think weve known whoever got elected in 2024 would end up being the villain.
However this is an issue that Obama, Trump and Biden signed off on.
Posted on 11/18/24 at 1:01 pm to Zach
quote:
So, if I wanta buy a 22 used car I can't get a good deal because the lots don't have repos?
Yes, similar to the housing market doing whatever it can to prop up home values.
Posted on 11/18/24 at 1:03 pm to member12
quote:
And it's a dreary grey/silver color so it's perfect for my personality.
I have no desire for anything flashy or expensive.
I've always been a very practical person.
Posted on 11/18/24 at 1:06 pm to waiting4saturday
quote:
you mean to tell me all those people who bought cars for above MSRP are underwater?
Not all of them. Circumstances forced me to buy a car when they were all selling above MSRP but I paid cash like I always do...just had to pay more cash than normal.
Posted on 11/18/24 at 1:07 pm to BhamTigah
quote:
but I paid cash like I always do..
I put 10k down on the car I bought this summer. Having a huge car note is a big no for me.
This post was edited on 11/18/24 at 1:08 pm
Posted on 11/18/24 at 1:08 pm to John Barron
Never finance a car. Always pay cash for the newest one you can afford. You'll never build much if you don't.
Posted on 11/18/24 at 1:09 pm to East Coast Band
quote:
20+ years ago , no one financed a car more than 4 years, maybe 5 at the most. Now, you've got 8 year loans. And vehicles still depreciate like they always have.
Exactly. I’m always staggered at the number of $80k+ Yukons and Silverados are on the road.
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