Car Loans

[PricklyPete]

Sigh....

http://www.autoblog.com/2015/06/09/car-loans-longer-than-ever/

Just waiting for when 10 year loans become the norm.

 

[smackababy]

Eh, that makes sense though. The higher the loan amount, the easier it is repay the longer the loan. Banks don't particularly mind, because they are making more money from interest.

 

[deadlyapp]

When I bought my truck new I was given the option of a 5 year or 6 year loan, each having the same APR (1.9%). For me, the miniscule amount of extra interest I'd pay (if I let the loan run it's entire course) was much less important than reducing my monthly payment by almost 20%. And it's not that I needed the money, but I sure as heck knew I can do better than a 2% return over 5 years.

 

[BurnItDwn]

Cars generally last longer than they did in the past...

In the 80s, it was rare for most cars to see much more then about 100,000 miles.

Now, most are driven almost 200,000 miles before being junked/scrapped.

 

[cbrsurfr]

How else can one afford a 50K+ truck or SUV? No one wants an 800/month car payment. New car prices have gotten out of hand.

 

[JSt0rm]

How else can one afford a 50K+ truck or SUV? No one wants an 800/month car payment. New car prices have gotten out of hand.

but as others have said financing is cheap. You can do more with your money not putting it into a car.

 

[GagHalfrunt]

Cars generally last longer than they did in the past...

In the 80s, it was rare for most cars to see much more then about 100,000 miles.

Now, most are driven almost 200,000 miles before being junked/scrapped.

That's not the point. If you need to take out a loan that long to be able to afford the payments it means that you're buying a car that's too expensive.

 

[TwiceOver]

How else can one afford a 50K+ truck or SUV? No one wants an 800/month car payment. New car prices have gotten out of hand.

Yeah I was walking through the mall the other day and they had a small 2-door Jeep that was (in all) smaller than my 4-door yaris. $37,000. Yowzers. 2.5x what I paid for my car.

 

[Kwatt]

Not as many are going for sub-prime home loans. So, another way to create more debt was needed. Sub-prime auto loans and collage loans are the replacement.

The economy only grows if debt grows.


.

 

[JSt0rm]

Yeah I was walking through the mall the other day and they had a small 2-door Jeep that was (in all) smaller than my 4-door yaris. $37,000. Yowzers. 2.5x what I paid for my car.

Yeah but you are driving a yaris

 

[yinan]

I would consider a 10 year loan on a Tesla

 

[TwiceOver]

Yeah but you are driving a yaris

I hear ya. Works great. 8 years not a single problem. 35mpg city, 43 highway. It's economical since I'm not a "car guy" and don't give a shit what other people think about what I drive.

Unlike my BIL who buys a new mustang every few years and pays $750/mo for that privilege.

 

[JDawg1536]

That's not the point. If you need to take out a loan that long to be able to afford the payments it means that you're buying a car that's too expensive.

Maybe, but why wouldn't I want to extend the payments? If I could finance at 1% for a year or 1% for 100 years, why wouldn't I take the latter?

 

[Safeway]

I buy some vehicles, but lease my primary vehicles. I just turned in my prior 2-year lease picked up another one. They tried to get me to buy it instead, calculating the payments over 7 years. They said that a 7-year term is pretty standard now. Even over 7 years, the payment was over $1,500/month. The lease is substantially less than that.

 

[jlee]

Used cars FTW....I can't imagine paying what a new car costs these days.

 

[SSSnail]

Then you visit some other countries where they have ridiculous taxes and fees on cars that you're paying around $150K USD for a Volkswagen with a 10 years loan, then you appreciate this. Maybe not.

 

[BoomerD]

I was looking at a new F350 a couple of months ago... Truck prices have gone UP!
(not the same truck, but similar)
http://www.parrford.com/bremerton-n...ID_~Model_F-350~ModelActual_~ExteriorColor_/1

 

[nageov3t]

Used cars FTW....I can't imagine paying what a new car costs these days.

idk, when I was in the market last summer, the price difference between used with low milage versus brand new off the lot was pretty small (maybe, $2-3k on an MSRP of $27k, not taking into account the extra standard features that the 2014 had versus the 2013 model and promotional financing that was only available for new cars)

obviously I could have bought a Toyota Camry with 100k miles using the spare change in my couch, but that would have defeated the purpose of replacing my old unreliable car.

 

[JSt0rm]

I hear ya. Works great. 8 years not a single problem. 35mpg city, 43 highway. It's economical since I'm not a "car guy" and don't give a shit what other people think about what I drive.

Unlike my BIL who buys a new mustang every few years and pays $750/mo for that privilege.

There is a magical place in between those 2 options.

 

[BurnItDwn]

That's not the point. If you need to take out a loan that long to be able to afford the payments it means that you're buying a car that's too expensive.

I agree. I'm simply saying that the reason banks are more willing and able to give longer term loans for vehicles now vs in the past is that vehicles last longer, and depreciate more slowly in the past.

People overextend themselves and buy too mush shit. Many dont learn until they get into trouble, many never learn.

 

[dave_the_nerd]

59 month loan on my Focus. Paid off next month.

Feels good, man.

 

[Brian Stirling]

You can take the longer loan then pay it off faster. Having the longer loan gives you the option to pay less per month if money is tight but you can still make larger payments to payoff the loan in less time.

A typical 30 year mortgage can be paid off in 22 years with one extra payment per year.


Brian

 

[yinan]

You can take the longer loan then pay it off faster. Having the longer loan gives you the option to pay less per month if money is tight but you can still make larger payments to payoff the loan in less time.

A typical 30 year mortgage can be paid off in 22 years with one extra payment per year.


Brian

That's what I did with my car. 2012 Mustang, 5 year loan that is currently paid off. I now have to prevent myself from getting one of the awesome new ones, or wait a bit and get a 3 series Tesla where I will be at the showroom screaming "TAKE MY MONEY"

 

[TwiceOver]

There is a magical place in between those 2 options.

Well nobody said you weren't observant. Like I said, for my needs...

 

[Jumpem]

I buy some vehicles, but lease my primary vehicles. I just turned in my prior 2-year lease picked up another one. They tried to get me to buy it instead, calculating the payments over 7 years. They said that a 7-year term is pretty standard now. Even over 7 years, the payment was over $1,500/month. The lease is substantially less than that.

This. I much prefer leasing as the payment for the same vehicle is much lower. There is also no need to worry about trade in values.