03-03-2016, 03:49 PM | #1 |
Solving problems
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Avg new vehicle loan is $30k and payment is $500!
... on a 67 month loan. Damn! I see a bubble.
http://www.businessinsider.com/r-ave...xperian-2016-3 The average amount of a new-vehicle loan in the United States rose by $1,170 in the fourth quarter from a year earlier to a record high $29,551, and the average monthly payment was nearly $500, Experian Automotive said on Thursday. |
03-03-2016, 03:56 PM | #2 |
lawn boy
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A new car price bubble?
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03-03-2016, 04:55 PM | #3 |
Crotchety
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I don't know where I stand on a "bubble" for car loans. I feel like I read about this every few months for the last couple years. I get what the authors say, but it just doesn't seem like the mortgage/housing meltdown. It's similar but different
I definitely don't agree with the increased lengths of car loans, but I think cars are generally more reliable and most people tend to keep their cars for a long time. I never want a 7 year car loan, but I understand it a little more if you plan to keep a car 10+ years. I have tried all I can to pay for a car in cash or keep the loan length as short as possible, but I need a car for the wife now/within the next 6 months and something more practical/comfortable for myself in the next 18 months. I'm sure a loan will be involved on at least one of them, but I don't really want to see us doing anything beyond 4 years. For the average person, does it make sense to buy a new car with all cash anymore? I'm asking this as an honest question... I realize not many people can go in with cash and buy a car. Looking back on my last purchase, I did a substantial amount down, but the interest rates were so low that I'm not really sure it made sense to put down as much as I did. |
03-03-2016, 05:30 PM | #4 |
older fart than ZBB
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predatory practices are returning, and not just in the new/used car loan area.
Crazy 0 down mortgages are making a comeback too
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03-03-2016, 05:50 PM | #5 |
lawn boy
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What's the worse case for a car bubble, you have to ride the bus? That is nothing at all like the housing thing, is that really what you meant?
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03-04-2016, 07:32 AM | #6 |
No more BMWs
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A bubble would imply there is increasing potential for or indication of people not paying their loans. Do car loans offer the same teaser rates to people with poor credit, like the mortgage industry had in the mid-2000s? Every car loan I've had in the past ten plus years has been fixed 0.99 or 1.99%.
To Chris' question, I'd much rather take a $40k loan on a car for three years at that low rate than paying cash. The cash will end up going towards my mortgage which is at 3% or into our investment accounts that make 10-15% or more. |
03-04-2016, 08:12 AM | #7 | |
dogged
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03-04-2016, 08:40 AM | #8 | |
swinging for the fences
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03-04-2016, 08:56 AM | #9 | |
dogged
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03-04-2016, 09:04 AM | #10 |
Solving problems
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I have had no problems financing at cheap rates when I could have bought in cash.
But for a good number (probably majority), those growing loan amounts and lengths have more to do with continuously rolling over negative equity into a new purchase and extending the terms to try to hold the monthly payment. Eventually that will be unsustainable. Just my thought. |
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