A divorce and a new family will set you back too.
$45k loan for a $27k car!
- Thread starter Mad_Hatter
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Originally Posted by Mad_Hatter
If you can't pay off a car in 5yrs or less, then buy a cheaper car more in line with your income and debt...
Many of us would consider that sort of logic just as foolish as the story in the original post. There are two types of people-those who understand interest and collect it, and those who don't understand interest and pay it.
If you can't pay off a car in 5yrs or less, then buy a cheaper car more in line with your income and debt...
Many of us would consider that sort of logic just as foolish as the story in the original post. There are two types of people-those who understand interest and collect it, and those who don't understand interest and pay it.
I think part of the problem is a couple things.
Keeping up with the jones,have a newer car,nicer lawn mower,nicer back yard etc all incurring debt.
Constant ads for new cars gets the itch going more debt.
Buying bigger and more expensive homes to show the world you have made it.
My wife and I have a modest income and live below it.
Yes there are two car payments and a small amount of credit card debt but still below our income.
The only reason we have late model cars with a payment is because we are both seniors and need reliable transportation.
We have been down the road of older cars that have left us stranded,cant do that anymore.
And we have a small savings account,imagine that .
We never feel the need to constantly have bigger and better things.
Keeping up with the jones,have a newer car,nicer lawn mower,nicer back yard etc all incurring debt.
Constant ads for new cars gets the itch going more debt.
Buying bigger and more expensive homes to show the world you have made it.
My wife and I have a modest income and live below it.
Yes there are two car payments and a small amount of credit card debt but still below our income.
The only reason we have late model cars with a payment is because we are both seniors and need reliable transportation.
We have been down the road of older cars that have left us stranded,cant do that anymore.
And we have a small savings account,imagine that .
We never feel the need to constantly have bigger and better things.
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I haven't bought a car since 1975 that I didn't pay cash for.
Business investment is down, despite a massive tax break given to corporations. Corporate borrowing is at all time highs because of low interest rates. Unemployment is low, which typically causes pressure in the form of inflation. A rise in inflation is combated by the fed raising interest rates, but that inflation never happened. The fed is actively lowering rates.
Low unemployment, no increase in inflation, decrease in interest rates (and pressure to reduce them even further from the president), cheaper money, more borrowing, more debt...
So what is keeping the economy humming? Consumer spending. Through all this, businesses pulling back, increased tariffs putting cost pressure on goods, massive debt loads, a number of economic indicators pointing the wrong way, people have confidence and keep spending money.
While everyone here shakes their head and wags their finger, if people were to get wise to their spending and bring it down to a reasonable level, start saving and stop spending, pay down that debt, the economy would quickly retract.
Recession can be a self-fulfilling prophecy. This is why politicians, especially those riding on a strong economy as their crowning achievement, get really antsy when the r-word starts getting thrown around by economists in the news. If consumers were to believe these indicators pointing to a recession, they'd pull back on the reins and stop rolling tens of thousands in negative equity into their next car. That belief and the subsequent reduction in spending would absolutely push the economy toward that dreaded r-word.
So, I guess the moral is: Wag your finger at these people, but also shake their hand and thank them for taking one for the team, because they're the real reason your 401k is doing so well.
Low unemployment, no increase in inflation, decrease in interest rates (and pressure to reduce them even further from the president), cheaper money, more borrowing, more debt...
So what is keeping the economy humming? Consumer spending. Through all this, businesses pulling back, increased tariffs putting cost pressure on goods, massive debt loads, a number of economic indicators pointing the wrong way, people have confidence and keep spending money.
While everyone here shakes their head and wags their finger, if people were to get wise to their spending and bring it down to a reasonable level, start saving and stop spending, pay down that debt, the economy would quickly retract.
Recession can be a self-fulfilling prophecy. This is why politicians, especially those riding on a strong economy as their crowning achievement, get really antsy when the r-word starts getting thrown around by economists in the news. If consumers were to believe these indicators pointing to a recession, they'd pull back on the reins and stop rolling tens of thousands in negative equity into their next car. That belief and the subsequent reduction in spending would absolutely push the economy toward that dreaded r-word.
So, I guess the moral is: Wag your finger at these people, but also shake their hand and thank them for taking one for the team, because they're the real reason your 401k is doing so well.
Originally Posted by Slick17601
I don't like the fact that the article plays him up as a victim. No one held a gun to his head.
Being a 'victim' is the best strategy in modern America....right now it looks like all the 'victims' of college loan debt may
fare better than those who paid their way.
Schools used to teach 'home economics'.....now they teach 'social justice'....it's all part of 'dumbing down' (by design)....
I don't like the fact that the article plays him up as a victim. No one held a gun to his head.
Being a 'victim' is the best strategy in modern America....right now it looks like all the 'victims' of college loan debt may
fare better than those who paid their way.
Schools used to teach 'home economics'.....now they teach 'social justice'....it's all part of 'dumbing down' (by design)....
When my kids were growing up i always told them there is no free lunch and credit is the debil. now that they are in their 20's i have found all that talk seemed to have worked. they pay for what they can in cash and pay off their cards every month. i taught them what interest is and how to be frugal and try to get the best deal .
last week my daughter tells me her friend bought a brand new Mercedes GLS . i thought WTH that girl is looking for a job and has no income. so i asked my daughter a few questions about it. seems her friend put down $15k on a $60k car. payment is close to $800 a month for 5 years. her parents co signed it . she will be upside down in a year or so on that car. i jut can't figure out how she was able to buy it with no income .
in my opinion credit is too easy to get these days. whne i was younger getting credit was difficult. i don't blame the banks or so called " predatory " lenders. its the people that borrow and spend money without thinking . no one has a gun to their head when they want to buy a new $1k phone or something else
last week my daughter tells me her friend bought a brand new Mercedes GLS . i thought WTH that girl is looking for a job and has no income. so i asked my daughter a few questions about it. seems her friend put down $15k on a $60k car. payment is close to $800 a month for 5 years. her parents co signed it . she will be upside down in a year or so on that car. i jut can't figure out how she was able to buy it with no income .
in my opinion credit is too easy to get these days. whne i was younger getting credit was difficult. i don't blame the banks or so called " predatory " lenders. its the people that borrow and spend money without thinking . no one has a gun to their head when they want to buy a new $1k phone or something else
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Sorry, its either or -- no common sense or no contentment. Too many people are obsessed with material possession today then there health/happiness/security tomorrow. I pay cash for my vehicles also -- the only payment I want is my mortgage and I am making an extra payment every year since ownership to pay it off.
Originally Posted by Mad_Hatter
This is bonkers..In one example 2 young ppl rolled in nearly $15k in negative equity!
Link to WSJ article
Article says he is 40, not what I'd call, "young ppl." And as long as the borrower makes the monthly payment, what's the big problem. He's an electrician and they make good money. While not the smartest financial decision, if he can afford it, who cares?
This is bonkers..In one example 2 young ppl rolled in nearly $15k in negative equity!
Link to WSJ article
Article says he is 40, not what I'd call, "young ppl." And as long as the borrower makes the monthly payment, what's the big problem. He's an electrician and they make good money. While not the smartest financial decision, if he can afford it, who cares?
Originally Posted by MoneyJohn
Nobody is supposed to learn the lesson if there are no rules.
What happened in 2008 was for all to see. If you see someone stick their finger in a light socket, how dumb do you have to be to do the same thing? This stuff isn't rocket science. It's common sense.
Nobody is supposed to learn the lesson if there are no rules.
What happened in 2008 was for all to see. If you see someone stick their finger in a light socket, how dumb do you have to be to do the same thing? This stuff isn't rocket science. It's common sense.
This isn't necessarily case of stupidity (although is some instances, yes it is) as much as someone wanting more than they can afford. I've never, ever had a car loan. My parents were frugal and taught me that loans are for purchasing homes.....everything else should be with cash. And that is why my fleet averages about 10 years old. The guy in the article has no business getting 4 cars over a couple years. Each time costs money. Just plain stupid on his part.
I wonder on these "subprime" loans, what is the interest rate they are paying? Paying interest is for losers.....as in money pouring out of your wallet every day you owe. Just say no.
I wonder on these "subprime" loans, what is the interest rate they are paying? Paying interest is for losers.....as in money pouring out of your wallet every day you owe. Just say no.
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Originally Posted by MoneyJohn
This is a good documentary, worth watching Panic: The Untold Story of the 2008 Financial Crisis At the end of the documentary, the only thing that REALLY struck me, they wanted to conclude that all these companies were saved to save the global economy. I don't know how much truth is there. Some companies should be allowed to fail, esp in the financial industry. Yes, people will lose jobs and sure some of them were involved in some shape or form in these sleazy practices and all CEOs involved should be brought to justice. Wishful thinking, I guess.
Wealth transfer, plain and simple. Fiat currency itself became less valuable and assets went up in price. That's when the housing market in Toronto and Vancouver started taking off.
Socializing costs + privatizing profits = wealth transfers
This is a good documentary, worth watching Panic: The Untold Story of the 2008 Financial Crisis At the end of the documentary, the only thing that REALLY struck me, they wanted to conclude that all these companies were saved to save the global economy. I don't know how much truth is there. Some companies should be allowed to fail, esp in the financial industry. Yes, people will lose jobs and sure some of them were involved in some shape or form in these sleazy practices and all CEOs involved should be brought to justice. Wishful thinking, I guess.
Wealth transfer, plain and simple. Fiat currency itself became less valuable and assets went up in price. That's when the housing market in Toronto and Vancouver started taking off.
Socializing costs + privatizing profits = wealth transfers
Originally Posted by WhyMe
When my kids were growing up i always told them there is no free lunch and credit is the debil. now that they are in their 20's i have found all that talk seemed to have worked. they pay for what they can in cash and pay off their cards every month. i taught them what interest is and how to be frugal and try to get the best deal .
last week my daughter tells me her friend bought a brand new Mercedes GLS . i thought WTH that girl is looking for a job and has no income. so i asked my daughter a few questions about it. seems her friend put down $15k on a $60k car. payment is close to $800 a month for 5 years. her parents co signed it . she will be upside down in a year or so on that car. i jut can't figure out how she was able to buy it with no income .
in my opinion credit is too easy to get these days. whne i was younger getting credit was difficult. i don't blame the banks or so called " predatory " lenders. its the people that borrow and spend money without thinking . no one has a gun to their head when they want to buy a new $1k phone or something else
Daughter's friend didn't buy that car, her paremts did when they cosigned the loan. Biggest problem is-there's apparently too much excess "digital" cash around, chasing profits these days (again), that tends to cause unbacked asset bubbles. Hopefully they're smaller than the housing market bubble of the mid '00s was, home prices were appreciating by a ridiculous 15% or more annually, and mortgage companies were FIGHTING over who got to fund the home "ATM"!
When my kids were growing up i always told them there is no free lunch and credit is the debil. now that they are in their 20's i have found all that talk seemed to have worked. they pay for what they can in cash and pay off their cards every month. i taught them what interest is and how to be frugal and try to get the best deal .
last week my daughter tells me her friend bought a brand new Mercedes GLS . i thought WTH that girl is looking for a job and has no income. so i asked my daughter a few questions about it. seems her friend put down $15k on a $60k car. payment is close to $800 a month for 5 years. her parents co signed it . she will be upside down in a year or so on that car. i jut can't figure out how she was able to buy it with no income .
in my opinion credit is too easy to get these days. whne i was younger getting credit was difficult. i don't blame the banks or so called " predatory " lenders. its the people that borrow and spend money without thinking . no one has a gun to their head when they want to buy a new $1k phone or something else
Daughter's friend didn't buy that car, her paremts did when they cosigned the loan. Biggest problem is-there's apparently too much excess "digital" cash around, chasing profits these days (again), that tends to cause unbacked asset bubbles. Hopefully they're smaller than the housing market bubble of the mid '00s was, home prices were appreciating by a ridiculous 15% or more annually, and mortgage companies were FIGHTING over who got to fund the home "ATM"!
Next bubble will be very bad.
Lots of people over leverage themselves to their eyeballs and think they are living the American Dream.
Young folks today just know how to sign on the dotted line and worry about the bills later.
Lots of people over leverage themselves to their eyeballs and think they are living the American Dream.
Young folks today just know how to sign on the dotted line and worry about the bills later.
Originally Posted by marine65
I think part of the problem is a couple things.
Keeping up with the jones,have a newer car,nicer lawn mower,nicer back yard etc all incurring debt.
Constant ads for new cars gets the itch going more debt.
Buying bigger and more expensive homes to show the world you have made it.
My wife and I have a modest income and live below it.
Yes there are two car payments and a small amount of credit card debt but still below our income.
The only reason we have late model cars with a payment is because we are both seniors and need reliable transportation.
We have been down the road of older cars that have left us stranded,cant do that anymore.
And we have a small savings account,imagine that .
We never feel the need to constantly have bigger and better things.
You've summed it up nicely. People are keeping up with the Joneses. They want to look good and think that the nice new car gives them status. They look down at people that have older cars.
They don't think with common sense. It's all about the instant gratification. Finance companies are making their money on it.
I don't think this issue is as large as the housing crisis in 2008. What's the true percentage of people on negative equity on these car loans?
I think part of the problem is a couple things.
Keeping up with the jones,have a newer car,nicer lawn mower,nicer back yard etc all incurring debt.
Constant ads for new cars gets the itch going more debt.
Buying bigger and more expensive homes to show the world you have made it.
My wife and I have a modest income and live below it.
Yes there are two car payments and a small amount of credit card debt but still below our income.
The only reason we have late model cars with a payment is because we are both seniors and need reliable transportation.
We have been down the road of older cars that have left us stranded,cant do that anymore.
And we have a small savings account,imagine that .
We never feel the need to constantly have bigger and better things.
You've summed it up nicely. People are keeping up with the Joneses. They want to look good and think that the nice new car gives them status. They look down at people that have older cars.
They don't think with common sense. It's all about the instant gratification. Finance companies are making their money on it.
I don't think this issue is as large as the housing crisis in 2008. What's the true percentage of people on negative equity on these car loans?
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Just plain stupid. Think those big spenders will have a comfortable retirement?
Originally Posted by WhyMe
whats one of the things a car salesman ask you? " how much a monthly payment can you afford" ? some people just don't care how much the car cost as long as they can make the monthly payment.
I've been asked that question. I'm a loudmouth and generally make a scene. "What kind of idiot do you take me for?"
whats one of the things a car salesman ask you? " how much a monthly payment can you afford" ? some people just don't care how much the car cost as long as they can make the monthly payment.
I've been asked that question. I'm a loudmouth and generally make a scene. "What kind of idiot do you take me for?"
Originally Posted by Mr Nice
Young folks today just know how to sign on the dotted line and worry about the bills later.
HAHA, guy is 40. If that is young, I'm guessin you're around....
But I get your point. The thing is, you get people getting out of high school going into some trades that pay a lot very quickly, and they have no idea how to manage money. Read in the paper about some 22 yo crane operator making $80K. Bet he's not tooling around in a 10 year old Corolla.
Young folks today just know how to sign on the dotted line and worry about the bills later.
HAHA, guy is 40. If that is young, I'm guessin you're around....
Originally Posted by NormanBuntz
Just plain stupid. Think those big spenders will have a comfortable retirement?
No, but they look stylish heading to the dollar store in those Fancy rides.
Just plain stupid. Think those big spenders will have a comfortable retirement?
No, but they look stylish heading to the dollar store in those Fancy rides.
And not a week after getting it home, they finance a set of new rims.
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