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Also this is a (granted extreme) example of why ever being upside down on your car loan is being bad with money. Someone asked about that a couple pages back. It would literally cost this guy cash he doesn't have to rid himself of either car because he's upside down on both of them. He's between a rock and a hard place because he can't afford to sell it and pay off the difference on the loan, and he can't afford to keep making payments on it. At least if he weren't upside down he could sell it for near-zero gain/loss and get rid of the payment burden. This guy is a classic case of thinking in terms of monthly payments, and not total cost of things. Yeah sure, he could "afford" the payments on his cushy 160k contract but he didn't actually have $40,000 (x2) to buy two brand new cars with. Once the income stream dried up all of a sudden he's super hosed. It's one thing (and often prudent) to take out a low interest (another gently caress up of his, 19% APR loving LOL) loan for a large purchase like a car, assuming you actually have money in the bank to cover it in a worst case scenario like this. If being able to continue to make payments depends entirely on a continued income stream then you cannot afford it. Guinness fucked around with this message at 19:53 on Aug 7, 2014 |
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Aug 7, 2014 19:47
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Yeah, I had a mental hang-up about spending my savings on a car I needed, so I had payments. I understand that this is more a mental thing they any money thing, but it's hard to shake for me personally.
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Aug 7, 2014 20:03
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How do people buy 2 $40k cars in 6 months? Not mentally, because cars are cool and having a expensive car is even cooler. I mean how do you get approved for those loans with 12k of debt, no savings, no assets and a single income source?
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Aug 7, 2014 20:15
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The Door Frame posted:How do people buy 2 $40k cars in 6 months? Not mentally, because cars are cool and having a expensive car is even cooler. I mean how do you get approved for those loans with 12k of debt, no savings, no assets and a single income source? 19% APR.
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Aug 7, 2014 20:19
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It's easy to get car loans with poo poo credit if you don't mind getting reamed by a 19% APR. If you make payments the financier gets paid LOL-amounts of interest, and if you don't pay they just repo your car and sell it again.
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Aug 7, 2014 20:20
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FrozenVent posted:19% APR.  I don't think this is funny anymore, guys.
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Aug 7, 2014 20:28
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Unless you're actually low income poverty level it's pretty inexcusable to not have six months of living expenses in savings.
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Aug 7, 2014 20:31
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19% sounds like a 2 year car loan for a more "responsible" lender, but if my math is correct, it's about 6 years if he's paying $920 a month on a $40,000 loan and almost 8 years on the other loan. I guess he can use that last 8 grand to file for bankruptcy
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Aug 7, 2014 20:42
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Maybe he should have leased the car.
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Aug 7, 2014 20:44
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The Door Frame posted:19% sounds like a 2 year car loan for a more "responsible" lender 19% is a horrendously lovely rate no matter the term. Even a 2-yr note should be less than 5% on a new car with even halfway decent credit.
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Aug 7, 2014 20:51
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Guinness posted:19% is a horrendously lovely rate no matter the term. Even a 2-yr note should be less than 5% on a new car with even halfway decent credit. drat you're right, the highest I could find was 5.5% How is that even legal?
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Aug 7, 2014 20:58
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The highest I was offered when I shopped for cars two years ago was 6%, I actually walked out of the dealership because gently caress that noise, the guys across the street had >2%. Ended up getting something like 1.9%, which isn't awesome, but heh. Coulda gotten 0% if I'd paid over two years.
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Aug 7, 2014 21:01
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19% APR is terrible. It's only not terrible if you're in the late 1970s with a 2 year loan and your savings account is earning 13% interest. Plus, where does he live with $1700 rent that also requires two cars? That's the kind of rent you'd see in a big city with public transportation, unless those two are renting a five bedroom house in Dallas or something. And I like one of those comments. "What are you driving? You can lease three Jaguars for $1500/mo"
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Aug 7, 2014 21:07
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Bugamol posted:I feel like people clinging to their car debt is a constantly reoccurring theme in these types of stories. WE HAD TO BUY A $40,000 CAR YOU DON'T GET IT. I DON'T WORK ON CARS. In this case it sounds like 2 $40,000 cars. The problem is that they aren't just clinging to their car debt, their car debt is clinging to them. Getting out of an upside down car loan requires cash that broke people don't have... As far as cost, I'm betting the 19% APR car was "only" $25k new.
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Aug 7, 2014 21:09
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Guinness posted:All ya'll with hundreds of hours of banked vacation/sick time need to take some time off. Working that much with no break ain't good for you. Seriously, take 2+ weeks and do something fun and totally disconnect. It's good for your body, mind, and soul. We can't use sick for that. I am sitting on over 100 hours of vacation, but actually using has always been an issue for me.
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Aug 7, 2014 21:29
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code:
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Aug 7, 2014 21:42
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Zhentar posted:The problem is that they aren't just clinging to their car debt, their car debt is clinging to them. Getting out of an upside down car loan requires cash that broke people don't have... The logic behind not being able to get out of a lovely car loan is sound and I don't disagree. What usually seems to follow this trend is that people perceive that when they "need a car" they "have" to buy something for $20,000-$30,000. Even if you want a new car there are plenty of great options in the $15,000-$20,000 range. When we bought our car the credit union we go through offered 9.5% interest and we just said no thanks. Ended up getting .9% through the dealer. At the time I didn't even have great credit (mid 600's).
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Aug 7, 2014 21:46
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Rick Rickshaw posted:fake edit: Also, yes....where do you live/work where you get paid out for sick time? New York. It's a company thing, not a state thing. CitizenKain posted:Any long term illness I would go on short term disability if I'm going to be gone for 2 or more weeks. They'd drain the sick time until then however. Except if I go on short term disability, I only get 60% of my pay. I wish my time would accumulate endlessly. My father's did, when he had to have minor surgery he had just short of a year's worth of sick days saved up (over 30 years in the company), so he took three months off to recover for the hell of it. I'd rather keep some sick time in the bank as a just in case fund, and I don't really get much to start with. Only my vacation rolls over, and even then I can only roll over 150%. I rarely get sick, so as the end of the year approaches my sick time becomes my "I don't feel like working today" time because my time away from work is worth more to me than the money.
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Aug 7, 2014 22:07
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Zhentar posted:As far as cost, I'm betting the 19% APR car was "only" $25k new. Oh drat. That's probably right.
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Aug 7, 2014 22:32
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Bugamol posted:What usually seems to follow this trend is that people perceive that when they "need a car" they "have" to buy something for $20,000-$30,000. Can't argue that. "Oh, I gave away my car. Better buy a brand new $25k car, why not with rates as low as 19%!"  (Also, he mentions that was two years ago... so there wasn't even the $4k/week job to make that seem like a good idea. Nor did he try to get out of it or pay ahead at all once he was making that much...)
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Aug 7, 2014 23:12
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The Door Frame posted:drat you're right, the highest I could find was 5.5% I would say they were about dead on when assessing his risk profile.
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Aug 7, 2014 23:55
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The Door Frame posted:drat you're right, the highest I could find was 5.5% But people are weird about cars.
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Aug 7, 2014 23:58
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There was a previous reddit thread that got posted where someone commented that they "felt bad for the car salesman because they spent all day showing them cars" and that's why they took an 18% loan. Good car salesman are good at what they do. Talk to you about monthly payments and not about purchase price or even what the car is worth. Get you to focus on $600 a month for this great car! And not a $25,000 loan at 19%. Also most people have a pretty horrid understanding of personal finances. One of my buddies went to buy a new car and had 7 hard inquiries on their account before they "found" a bank that would accept them, and they were talking as if the car salesman did them a favor.
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Aug 8, 2014 00:12
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Vacation/Sick leave chat: I was a teacher for a few years. In Texas, you get five days of vacation per year from the state as part of teacher's compensation. This time accumulates if not used and follows you if you change school districts. It is only paid out at retirement, and even then it's at a fraction of a daily rate. $75/day or something, but if you've banked enough it's a nice little bonus at the end. Although teachers get lots of vacation days for school holidays, it can actually be pretty tough to take a regular old vacation day from your bank; generally healthy people can leave with a good stash. Most districts give you an additional five days per year (for the traditional total of 10 days per year total). District policies vary on whether the days accumulate and whether you can cash them out. A coworker's husband began the retirement process from Houston ISD. He had accumulated some hilariously large amount of banked "District" days - 160 or more. HISD doesn't pay out those days. He went up the chain in HR/compensation about this, asking why they wouldn't pay even a fraction of the days. Nothing. No way, no how. So he just told them that he'd continue to work for the next year, but that he'd take vacation every day. "You'd be greatly impacting a classroom full of students!" "I agree. It's probably easier to just pay me a fraction of the value now rather than the full value plus the cost of a substitute." "District policy is that you can't have more than six days simultaneously without superintendent approval." "Cool, I'll come in every seventh day, so I guess I'll be doing this for a year and change. Looks like we're still going to have the problem with paying me and a substitute." The contract allowed the district to assign him to any responsibility in the school. They made him a janitor - at the highest pay rate in the entire district - for a year and a half. He showed up every seventh day, screwed around doing the bare minimum, then took another six off. He left a year and a half after he had intended to retire with another $100K or so gross instead of $12K to $15K for the payout. On the macro scale, of course, it makes sense. Paying one guy $100K beats paying every district employee $6K at retirement. Still, it was absolutely hilarious to hear him tell the story of how they finally arrived at this "solution."
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Aug 8, 2014 00:26
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That warms my heart to hear. Tell your coworker's husband that J. Random Internet Guy wants to give him a high-five. 
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Aug 8, 2014 01:15
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Bugamol posted:One of my buddies went to buy a new car and had 7 hard inquiries on their account before they "found" a bank that would accept them, and they were talking as if the car salesman did them a favor. When I worked at a finance office for vehicle leasing, we had one really aggressive boiler room dealership that would just blunt force their way through every problem. One time, the website they submitted credit applications through had a glitch and even though we did a successful credit pull for the customer it wouldn't show up on their end for some reason. So they call us and they're freaked out, thinking they're going to lose a sale. I follow up with tech and it turns out they sat there and submitted a hard credit pull 27 times before they called me. By typing in their information each time. So I let the dealership know tech is working on it and that they need to stop pulling their credit by resubmitting the application repeatedly. Five minutes go by, I'm on the phone with our tech people again, and they've pulled it an additional 5 times and are continuing to pull it as I'm on the phone. I had to call them and say if they pulled the customer's credit one more time I was going to flat out kill the deal before they stopped, not like the customer with the mid 400 credit score would notice. I think it was mentioned way earlier in this thread, but never give your ID or anything like that to a car salesperson. They will, without your permission, run your credit against their best lenders, then run it down to the poo poo tier companies (like the one I worked at) until they can give you the great news that you're approved. And they will try to make that sale no matter how bad your credit is. I have had ridiculous arguments with salespeople about why nobody in their right mind would lend to their customer. The worst one I can remember was a two hour series of phone calls about a couple with a 90% pre-tax debt to income ratio with their monthly payment, a series of repossessions on their credit line, and state liens against both of them.
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Aug 8, 2014 02:37
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moana posted:The last few posts have me thinking that this is actually good, not bad, what do I do now? Find a young one with potential. Invest.
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Aug 8, 2014 03:20
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HonorableTB posted:And I thought my $308/month car payment was as bad as it could get I thought my payments on two cars 274/350 was bad. Then I remembered I got both at 0% APR. lostleaf posted:If you're financing at 0%, you're almost definitely financing directly from the manufacturer. The dealer isn't losing any money from this. I financed both through Ford Motor Credit. DEMAG fucked around with this message at 15:35 on Aug 11, 2014 |
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Aug 8, 2014 13:56
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DEMAG posted:I thought my payments on two cars 274/350 was bad. Then I remembered I got both at 0% APR. So did I. And my 19 year old self was delusional to think they didn't build the cost of financing into the price of the car. No one hands out money for free, even if you're paying them back. Surely to god if you walked in with cash you'd pay a few grand less than if you finance @ 0 APR.
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Aug 8, 2014 18:40
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Rick Rickshaw posted:So did I. And my 19 year old self was delusional to think they didn't build the cost of financing into the price of the car. No one hands out money for free, even if you're paying them back. If you're financing at 0%, you're almost definitely financing directly from the manufacturer. The dealer isn't losing any money from this. Always always always negotiate the total price of the car before you agree to financing. Otherwise, the dealers will play games to decrease your monthly cost while actually raising the total price of your car.
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Aug 8, 2014 18:54
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lostleaf posted:If you're financing at 0%, you're almost definitely financing directly from the manufacturer. The dealer isn't losing any money from this. My loan holder was Scotiabank. Is that the right term? "Loan holder"? Issuer? Anyway, it was through a bank. I just figure the dealer builds the cost of the financing into the price of the car, a fact I was oblivious to at the time, and then they pay Scotiabank for taking the "0%" loan.
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Aug 8, 2014 18:56
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There is something called "dealer reserve" where the dealer will pay an upfront cost (basicaly points) to reduce the interest rate from an institution to offer you a lower rate. This is why some will offer financing OR cash back...it works out about the same.
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Aug 8, 2014 19:11
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When I bought my Toyota, they offered a 3k discount for cash purchases, if I recall correctly.
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Aug 8, 2014 19:23
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Buying a car with outside financing is the same as cash to the dealer. You basically write them a check backed by your lender for the purchase amount. Using the dealer financing they might give you a better deal on the purchase price because they get kickbacks from the loan origination. Everything is negotiable, but always negotiate on final purchase price before talking payment plans. And never negotiate on monthly payments.
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Aug 8, 2014 19:26
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RommelMcDonald posted:I think it was mentioned way earlier in this thread, but never give your ID or anything like that to a car salesperson. They will, without your permission, run your credit against their best lenders, then run it down to the poo poo tier companies (like the one I worked at) until they can give you the great news that you're approved.  Happened at one dealership. Another dealership asked for my credit card, to show that I was serious. I told him if sitting here talking about a car price isn't serious, I'll leave right now. So he offered me a Yaris with 140,000km for $13,800 and that's the lowest price he could offer me. I left. Private sale is so much easier. Just takes awhile to find someone who gives you trustworthy vibes.
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Aug 8, 2014 22:58
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Harry posted:I would say they were about dead on when assessing his risk profile. I can't really disagree reflex posted:Private sale is so much easier. Just takes awhile to find someone who gives you trustworthy vibes. How can you not trust that a 1995 honda civic is is perfect condition, serious offers only? I love trawling Craigslist for cheap cars, but half of them don't even know enough to hide the blocks that keep their amazing condition car from rolling down the driveway
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Aug 8, 2014 23:37
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RommelMcDonald posted:never give your ID or anything like that to a car salesperson. They will, without your permission, run your credit How do you do test drives then? They always seem to want a copy of my DL. When I was car shopping about two years ago, I did a free trial on one of those credit monitoring companies to watch out for any hard pulls. I drove a shitload of cars and got no pulls. I don't see why a huge dealership would open themselves up to the liability. Or is that more applicable to those buy here pay here lots?
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Aug 9, 2014 02:12
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The Door Frame posted:How can you not trust that a 1995 honda civic is is perfect condition, serious offers only? I love trawling Craigslist for cheap cars, but half of them don't even know enough to hide the blocks that keep their amazing condition car from rolling down the driveway Cars were made between 1995 and this year. Some of them can be a really good value. 
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Aug 9, 2014 02:51
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Yeah, buy-here-pay-here or small used vehicle dealerships. I used to get, "The dealer told me to sign a blank piece of paper" enough to believe it. I know for a fact one dealership was forging contract signatures so that the customer could just fax/scan everything they needed and then pick up the vehicle without spending any time at the dealership mulling it over. It was ridiculous how many of his clients admitted, during the verification call to review the terms, they had never signed a contract, only to call me back 10 minutes later and say, "Oh yeah, that thing, I totally did sign it, I was just signing so much stuff I forgot man!"
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Aug 9, 2014 02:58
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This dealership talk feels insanely predatory. I'm currently an intern at a car dealership, in Poland. The prices are very clearly marked. No one ever talks in monthly payment terms, it's all full price. When a client asks, they get told the full price. On the other hand, cars in America are incredibly cheap. If I were to buy a new car in America for 40k with a 10% APR three year note, I would still probably come out way ahead. I'll take free and decent healthcare over it any day, but man, as a car enthusiast, looking at American prices makes me burn with envy.
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Aug 9, 2014 22:33
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