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$1000 vehicle payments at record high

Discussion in 'Fred's House of Pancakes' started by farmecologist, Jan 8, 2023.

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  1. farmecologist

    farmecologist Senior Member

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    I'm sure some of you have seen the headlines that $1000 car payments are at a record high. Here is one example :

    Record Share of Car Buyers Now Make $1,000 Monthly Payments | Money

    Honestly...what the heck?! o_O Personally, sorry...no thanks, a car payment anywhere near that ain't happening. I'll be watching the repo and used markets keenly in the next few months.
     
  2. Mendel Leisk

    Mendel Leisk Senior Member

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    Never bought a car on time.
     
  3. Montgomery

    Montgomery Senior Member

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    I can't say what Mendel stated, but I purchased based on a budget I could afford. Both monthly and owning the idea that I will be paying above the price due to interest. So I knew that if I by a car for 15k, total price might be 18k. Did my homework.
     
  4. Georgina Rudkus

    Georgina Rudkus Senior Member

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    I bought a few cars on credit in the way back past, but always paid them off in less than two years.

    The last vehicles in the past 10 years or more, I bought for cash. My dad taught me. that when you bought a car, it's time to save for the next one.

    Less than $1k is what I always paid for a mortgage on a house. Fortunately, I don't rent or have one of those either.
     
  5. farmecologist

    farmecologist Senior Member

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    I'd like to think folks are smart enough to buy a vehicle and then pay it off sooner with a high car payment...but sadly, that probably isn't the case.

    I've also heard of very long auto loan payoff periods becoming popular lately. Like 8+ year loans...complete with a large payment due to compounding interest. Just nope right there. If anything in the economy breaks ( and it already is ), I think we might actually see decent prices in the used vehicle market...but we'll see.
     
  6. farmecologist

    farmecologist Senior Member

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    It would be interesting to see the breakdown of trucks vs. autos in stats like this. I'd be willing to bet that trucks have a higher percentage of very high payments and very long loan terms...
     
  7. Georgina Rudkus

    Georgina Rudkus Senior Member

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    My greatest fear is being "old and poor." and eeking out on Social Security alone when I am retired.

    Those doing so are the same ones who enjoyed life and spent on credit to the max throughout their lives, while bragging and denigrating those who drive "beater" cars and lived in less ostentatious houses throughout their lives.

    I just cannot feel sorry for them.
     
    #8 Georgina Rudkus, Jan 8, 2023
    Last edited: Jan 8, 2023
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  8. farmecologist

    farmecologist Senior Member

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    Absolutely...The "keeping up with the Joneses" types drive me nuts. Stealth wealth is the way to go. (y)
     
  9. fuzzy1

    fuzzy1 Senior Member

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    I haven't this century, just cash on the barrelhead.

    The previous century, with fewer resources, I did buy at 50% down, 50% over 2 years, then started rebuilding the replacement car fund. On the last one, a snafu during a credit union IT 'upgrade' prompted me to pay it off early, and I've never bought on time since.

    For the longest time, I never even looked up my "credit score"(s), because it wasn't needed for anything. "FICO score" was still a secret the last time I had a loan. But it came out during the first Prius purchase, and again after an insurance fine print notice that due to credit scoring, I wasn't getting the best possible rate. After numerous inquiries, it finally came out that that notice went to everyone, and a 850 FICO was one of several requirements to avoid it. (According to the spokes-droid, no-one met all conditions.) Mine seemed to be bouncing off a cap of 830. Sis later commented that theirs also had the same cap, until they chose to use a 0% vehicle financing deal when no cash discount was available. Bingo, that broke their 830 cap. (We both had already paid off our mortgages, so were no longer getting any possible scoring benefit from regular mortgage payments.)
     
    #10 fuzzy1, Jan 8, 2023
    Last edited: Jan 8, 2023
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  10. bisco

    bisco cookie crumbler

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    this has been inevitable for the last 15 years. i'm old enough to know the cycle.

    housing collapse will be next, and all the scams will surface like last time
     
  11. Mendel Leisk

    Mendel Leisk Senior Member

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    Credit card companies tongue-in-cheek refer to clients who pay the statement balance in full every month, as deadbeats. :)
     
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  12. bisco

    bisco cookie crumbler

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    sign me up :cool: and, i get cash back on top of it (y)
     
  13. fuzzy1

    fuzzy1 Senior Member

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    Fortunately for the credit card companies, interest and fees from the other customers more than make up for the 'deadbeats'.
     
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  14. bisco

    bisco cookie crumbler

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    and they get paid by vendors.

    the real deadbeats will show up in bankruptcy court, and cc companies will be crying and whining after giving them the rope to hang themselves
     
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  15. Leadfoot J. McCoalroller

    Leadfoot J. McCoalroller Senior Member

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    Oh it's gonna get really wild. I was reading a bit recently where the big banks have decided to eliminate one of the traditional safety checks on auto loans: checking to see if you already have one.

    Here's the setup: you bought a car recently, and it cost you a fortune because *gestures at all of 2020-2022*. Now say something about the car isn't right, so you want to get a different car. But you can't.

    You can't trade it in because the value has fallen and you are now upside-down on that loan. You can't get the car you want, the dealer doesn't get to deal anything and the banker doesn't write a new loan. Lose-lose-lose, right?

    Okay, but what if the bank doesn't bother to ask about any existing auto loan? This way they can't use that to deny you credit, right? So this is just a wink-wink nudge-nudge deal that lets somebody take out a new loan on another car with both parties fully expecting that the buyer will be defaulting on the original loan to pay the new one.

    That's how hungry they are to write auto loans in a time when inventory has constrained the volume of sales (and therefore loan originations)

    This way, the banks and dealers can continue to profit on people who couldn't otherwise switch cars.

    So... it's going to be pretty weird with people buying cars with the clear-eyed expectation of defaulting on the previous one and turning it in or seeing it repossessed.
     
  16. fuzzy1

    fuzzy1 Senior Member

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    "The unemployment rate is approximately 8.4% and there are about 13.6 million Americans out of work. "

    Strike that stale item, it is datelined more than two years ago. Unemployment is now at its lowest in more than a half century, at 3.5%, with just 5.7 million out of work.

    The other two linked articles are still fresh.

    ... while privately laughing while raking in lots more in fees from those managing to stay out of bankruptcy court, than is being lost to bankruptcy.
     
  17. Mendel Leisk

    Mendel Leisk Senior Member

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    Canada recently cleared the way for merchants to start charging a premium on purchases bought using a credit card (to recoup what the credit card company is dinging the merchant). Seems like they're not all going to jump at once though; predictions are one-in-four/five merchants are going to do that, due to concerns of driving away business. That might change though.
     
  18. bisco

    bisco cookie crumbler

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    that's pretty good, almost like getting a discount for cash. we don't seem to like cash down here.

    i've offered cash for a few shekels off for years, but fewer and fewer acceptances as time has gone by
     
  19. hill

    hill High Fiber Member

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    Having voluntarily paid off a loan in less than a year way back in the mid 1970's ($3,100.00) - when the U.S. dollar still had value - the first thought that came to mind was that a thousand bucks now in 2023 is likely WAY less purchasing power than the very steep 1974 payment - when bringing down $3.95/hour at least meant something of a survivable income. Yea, more than anything, this is indicative of our ever worsening, worth WAY less & less dollar. Oh the irony ... now 2 years retired, financial gymnastics are to creatively reduce uncle sams' theft via Fiat/deflated dollars.
    .