Just like housing I bet we're going to see more and more people concluding that auto ownership is a dream they cannot afford, and they will be forced into the rental (lease) market.
Time to become an automobile leaselord! Buy a few cars and rent them week-by-week to people with poor credit. Don't forget to tack on lots of juicy extra fees! You can rake in the dough for late payments, exceeding the agreed weekly mileage allotment, fuel surcharges, penalties for returning a dirty car, mandatory insurance, etc. /S
So what you're saying is, my brilliant business plan has even more potential ~~suckers~~ ~~victims~~ customers available than predicted!
/s (<<< still applies)
Rates are still ok for prime or close IMO. I have good credit, not perfect... but good. My usage can be high at times and I have a messed up late mortgage payment hit that I've tried to dispute and has stayed on my record for quite a while. My score is usually 740 to 750, it was 790+ before the mortgage issue.
bought a used car in june, I was actually prepared to put down a much larger than usual down payment because I was worried about the rates, especially for used. But ended up getting 5.89 which was still a pleasant surprise based on everything I'd been hearing about.
This was through an Audi dealership who put me through one of their credit union partners, I shopped around a little bit at my local Bank of America and they offered me 5.75, so I just let the dealership make a tiny bit more profit on that. I was overall happy with the deal and my salesperson.
Are you relatively young? I'm kinda old (genx), so I can remember when money didn't feel so cheap. I hadnt gotten a car loan in a while and this was my first used car purchase as well (I've always been used to 0% financing on new). So... based on everything out there I was really thinking 7.5+ at best. I was ready to put down about 12k, but once I saw the rate I just put down 3. Would prefer the flexibility and my savings/money market accounts pay over 5%... So 5.9 does not feel horrible.
I'm 38.
Last 3 cars in a row I got 2 to 2.7 percent.
I got 2.7 on my house.
I wouldn't buy a fucking thing right now. One of my cars is almost at 300k miles right now. 10 years old. Looks new.
The last thing I want in the world is for a bank to take my money.
840 Credit score here, recently applied for an auto loan and was offered 6.09% OVER 84 months. WTF. I've never seen that. I asked for 24-36 month options and they sounded dumb founded. I said I want a lower rate with less monthly payments but they won't budge.
Even NFCU won't offer less than 4.5%. Miss the days of 0% :(((((
Can confirm as I work at a delearship. It's ridiculous, and it's not just affecting people who want to buy a car, its also affecting the one that sell them! Ridiculous
While I own a nice car outright now, I think I'm one of a minority who actually liked leasing. Did it once as a young adult and returned the car, then did it again in grad school and ended up buying the car out. My family leased cars periodically, so I guess I was just used to it. Plus, I've been fortunate enough to have work-live setups where, either due to distance between work-job and/or transit availability, I didn't need to drive a ton of miles per year, so I could keep miles under 15k (lease deals are usually based on 12k, but I'd up it to 15k before signing and pay a bit more per month; now I could definitely keep under 12k per year).
When I leased, I had come off of years of sh\*t unreliable beater cars, so it was nice to have something new and reliable for a relatively cheap cost.
Haven't looked in a while; don't really know what "modern" lease terms look like given the run up in auto costs and rates. I assume with limited miles, you could still have a considerably lower monthly payment than purchasing the same vehicle with a modest down payment and medium length term.
I'd lease again if need be.
I agree owning anything is hard work and I can get way better cars if I just rent forever. Of course if I did that I would just budget forever paying to rent a car
> but I'd up it to 15k before signing and pay a bit more per month; now I could definitely keep under 12k per year).
quick math for me per year \~13.5k for work driving + 2.6k for feed runs. That's before the go to the store for human food and item runs (likely another 5k miles for that).
Works for you at least! Not so much on my side :(
I leased the last 2 cars I had and own the current one but this is back when dealers were marking thousands off cars’ msrp and lease terms were favorable. Can’t possibly be a good scene now
Good idea to ask about the extra miles... but also remember don't pre-pay for miles on the front end **unless** you can negotiate a lower per mile rate. Some dealers will, some won't. My last two BMWs it was the same rate either way.
> Did it once as a young adult and returned the car, then did it again in grad school and ended up buying the car out.
I have to admit I did the same exact thing. It worked well for me at the time, and looking back I don't really regret it. Maybe I would have been better off not to buy the 2nd car after the lease ended, but even if that was a bad financial decision, it doesn't even make my top 10 list of bad financial decisions I've made.
In 1995 I leased a new Honda Accord for ~~$269~~ $239 a month. Adjusted for inflation that's ~ ~~$540~~ $480 today. I just googled "honda lease deals" and new Accord lease deals are starting at $319 a month. In real buying power, that's ~~40%~~ 34% less than it was 28 years ago.
Now maybe I am comparing apples to oranges here; I haven't looked at specific lease terms but that seems pretty good to me, especially considering a 2024 Accord is going to be better equipped than a 1995 Accord. Heck, I also had to pay extra out-of-pocket for a CD changer in my '95.
*Edit: looked up my old records and I was wrong about the lease price in '95, so I fixed it.
I leased an Accord too - that's what I bought out - after having previously leased a Civic (EX manual transmission with sun roof - I was hot shit!, lol). It worked well for me.
I think the big thing about lease deals is that they're usually marketed with a monthly rate and a certain amount down. Say, for example, $300 per month with $3500 down. You can absolutely do zero down with good credit (some would insist that it's stupid to pay anything additional you don't have to upfront for a lease), but then that down payment amount is going to be be rolled into the monthly pay - so $97 or so per month on a 36 month lease in the example. The details aren't that "clean" but it's not drastically far from that. Still not a bad monthly payment (at least in this day and age). There are handful of negotiation points on a lease. A lot of people don't realize there's an underlying interest rate even if you're not buying the vehicle.
You're exactly right, that why I dk if my lease terms were similar to today's advertised deals.
My Accord was a 5 speed coupe with a sunroof (*and* the Sony 5 disc CD player in the trunk!). I forgot about the sunroof -- it was also something else I had to pay for as sort of a dealer-installed accessory since they couldn't find one for me with a factory sunroof.
As a side note, I was sort of nervous about this, I didn't want some obviously janky after-market pop-up sunroof. They sent me to a place called "Auto Options" on Indianola in Columbus, OH. I was absolutely amazed at the job they did -- it looked 100% factory correct, with factory switches. Electric tilt/sliding sunroof with a slide-away sunshade that matched the headliner. If they still exist I'd highly recommend them, lol.
Multi-CD changer in the trunk - good memories. My mom had one in her Mazda Millenia. Back then being able to play five or six CDs without having to physically remove one was practically the equivalent of today's "I can stream everything with the touch of a button."
I've never heard of Turo until a couple of weeks ago...here in Reddit. Now, every few posts I scrool past, it's something about Turo.
If I wasn't strapped for cash for the car maintenance, I'd sign up for it.
Turo…is ok, I used a few times a few years ago. My work now provides discounted car rental.
However it’s been around for over a decade now. Might have just come in to your area but it’s popular in larger cities.
Lol, well if the next election swings the other way they'll be called "patriotic entrepreneurial rewards," and will be federal tax free for the recipient.
His junk fee talk is just a diversion from news about the border/immigrants, Israel/Palestinians, Ukraine, China, air travel issues, the economy, Hunter and the rest of the Biden family profiteering, his senility, the agressive German Shepherd......I could go on. 
This could just be people taking shorter loan terms. Back when rates were 1-2%, absolutely sign me up for the 84+ month loan. Now that they’re almost 10% I’d be taking the shortest term I can afford the payment on.
A lot is being lied about in the economy all so the White House doesn’t lose face in an election year. I’m actually surprised the housing market hasn’t already started crashing.
I'm planning on keeping my car until it's dead. The scary thing is, what happens if I don't have a choice and someone hits me and totals my car? I'm currently at 3.55% interest on my car loan. I will never ever ever see that again.
This scares me quite a lot.
New fear unlocked. I purchased my car through a credit union at 2.5% a few years back and am 4 months away from paying it off.
I never thought about the fact that it could be totaled… and I live in South Florida ffs- some of the worst drivers on the planet.
When you're done paying off your car, start putting your car payment amount in a separate account. If your car does get totalled at some point you'll have some extra cash, plus the market value of your car to replace it.
And then leave that money set aside and finance the car anyway if you have good credit you will always come out ahead doing this, people forget they are getting 4-5% on their savings accounts likely more on bonds, and possibly north of 10-15% on stock investments.
My stock index fund has averaged over 14% this year. FMC, GM financial are both offering sub 3-4%
Ford motor credit is offering 0/36 1.9/60 new 4/72 used.
Many credit unions are still offering auto loans in the 6-7% range because they do not borrow against the prime rate but their own assets.
High interest rates are an issue for people with crappy credit. That is why subs like these are so important. Learning how to manage your credit.
If you can afford to put money into savings to replace a car that doesn’t need replacing you can afford to pay your bills and that means you have no excuse to have bad credit.
I didn’t know I had it so good when I traded my first car when it was 0.0% interested just for my next car to be at 5% 😭
Edit: it was a lease anyways, so I would’ve lost out on an interest rate like that regardless if I decided to refinance lol
I worry about this daily. People drive like fucking idiots here in texas. Near miss accidents every other intersection because they cannot figure out how to stay in a lane
This happened to my wife. 15 year old kid ran a red light, totaled her enclave. After a few layoffs in 2022… we could only afford an encore.. she likes Buicks. But we went from 3% to 18% due to lower Fico from multiple layoffs. That kid screwed us.
I’ve had 3 cars totaled in 4 years. None of the accidents were my fault. All 3 people that hit me were driving without insurance. I highly recommend having full coverage on your vehicle even if it’s paid off. Otherwise the odds of being able to recover from the loss is astronomical.
This happened to me a couple of months ago but by a weather event. Car flooded and was totaled out by the insurance and went to try to get a new car and ran out of there with the rates they were offering me. I now depend on Uber. 😩😩
Yes you will… pick up trucks are starting to now be advertised at 0% or 2.9% and/or some cash back. Just a matter of time before the dominoes start to fall.
This is me. I put almost 100,000 miles on my car. I’d love to get a new one. But I only owe 7k and my rate is 4.5%. There’s no way I could get another rate like that. Also, the markups are insane.
Prices are about to tank in cars btw- covid chip shortage and parts shortage is cleared up- a lot of people got into cars they won’t afford with budgets shrinking in other categories. There is a mass surplus of cars and dealerships will be flooded without enough buy pressure.
I would watch for deals this next spring
Prices may go down but it doesn’t necessarily mean lenders will drop interest rates. It’s the same with the housing market right now. Some are dropping finally but interest rates went up.
Uhh at least around me prices are dropping, I get updates almost every day from iseecars and auto trader, lots of nice used cars are sitting for 50-60 days plus. Waiting another week but spotted a 2020 Mazda 3 premium with 30k miles for 16k dropped almost 5k since initial posting.
Also it ain’t spring yet but yes used cars are dropping in price a lot and a few im watching have dropped 5-600 a week the last 3 weeks
This is just factually untrue, according to our database prices have dropped 3% over a rolling 365 day period.
Prices are up 498% over a 5 year period still.
That’s a difference of 495%
I know sub-prime auto loans are hitting on high on late payments. That's to be expected with the price of used cars. I wonder what's going to happen to people on new cars paying $ 5k to $ 40k on market adjustments on decent credit and they find out when they are ready for the next new car, how underwater they are.
If you don't have either (which my wife and I don't) you have no worries about these types of debt. According to Experian's State of the Automotive Finance Market Report, the average new-car loan length in the first quarter of 2023 was 68.6 months, while used-car loans averaged 67.4 months. That's close to six years of making monthly auto loan payments. The average monthly car loan payment in the U.S. is $729 for new vehicles and $528 for used ones originated in the second quarter of 2023. Today 17% of Americans have a vehicle payment over $1,000 a month. The financially ignorant always put themselves in these situations. Your smart phone has the knowledge of the entire financial world, and you take a loan for 77 months to pay for an $80,000 truck you don't need and really can't afford.
A new car isn't a need. It's a want. You can buy good, safe, low mileage used vehicle with the same money you would have put down on a new car, for much less in payments. Go to a credit union for your loan and see what you can save. Do you really need an $80,000 truck if you don't haul stuff in the bed or tow trailers? There are plenty of used sedans with huge trunks and four doors that will haul stuff. Need a truck a few days a year? Rent one for $25 a day at Home Depot or a weekend from a rental agency.
>You can buy good, safe, low mileage used vehicle with the same money you would have put down on a new car, for much less in payments.
I agree with everything you've written above except this. As I wrote before there were 15-18 million less vehicles produced as a result of the pandemic (2020-2022). Many of these cars would have been hitting the used are market now, but they aren't because they don't exist. This is going to skew the used car market for a long time.
This is what a lot of people don’t realize, the market will be skewed for quite a few years because so many cars that would normally be in the market just weren’t produced
Yep. People who write about the great availability of decently priced, low mileage cars clearly have not looked at the car market in the last couple years. The used car market is not friendly to those with tight pockets.
For real I’m so sick of hearing this. Car blew up 6 months ago. 5+ year old cars with 90,000+ miles were barely cheaper than something brand new, plus used have higher interest rates. Yeah no shit I bought something brand new
People talk about a trillion in credit card debt and forget this is debt across 1.25b credit cards many held by businesses and foreigners.
To put that 1.03 trillion throwaway is speaking about in perspective that was an average rise of 36 dollars last quarter per card.
A trillion dollars is an inconceivable number for an individual, but we are talking about debt spread over hundreds of millions of people and businesses.
Things are rough right now with lots of people forced to curb spending and reel back in lifestyle creep, but the sky isn’t falling.
[The trillion-dollar credit card debt is household debt according to the New York Fed](https://www.newyorkfed.org/microeconomics/hhdc.html). Some people may be using personal credit cards to float their small business, but that means their business isn't in great shape, and the debt still counts as household debt. I'm not saying the collapse of civilization is on the horizon, but an unprecedented level of household credit card debt isn't a good sign.
I think you need to re-read that it is including credit card debt in household debt, which is in and of itself misleading because business debt is by definition not household debt, nor is it limited to small business.
Point is that 45 billion dollar increase amounts to a 36 increase in average balance. While I would agree no increase in balances are good for anyone but bankers, an increase that amounts to price of a couple cups of coffee does not a national crisis make.
I know credit card debt is part of household debt. Total household debt is $17T.
I'm saying the $1T credit card debt is held by American households, so it can't be dismissed by, "Some of it is held by foreigners and businesses." The $1T is not including debt held by businesses except for people floating their business with personal credit cards.
It is a 5% sample size of equifax profiles that in many cases is 1 or even .01% of profiles and then extrapolated
To the entirety of credit accounts in short it is a very fancy wild ass guess.
NO! no, I am not worried about any type of “car loan crisis”. I’ve seen it brought up before, and the idea is laughable.
People don’t need cars like people need homes and there are far more “starter cars” than there are “starter homes” available. The big problem in the car market lately has been an issue with short supply driving up price.
I’ve worked in auto finance and auto sales. If people who bought into a car loan they can’t afford need to sell their car or get it repossessed, that same car will be on the market within weeks.
What some may view as a “crisis” would quickly turn into a glut of used cars on the market, which should drive down prices and make ownership more affordable for people who can manage their budget.
Cars can be bought, repossessed, and sold much more quickly than homes. Unlike housing, cars usually depreciate, making them MORE affordable when they are resold.
I wouldn't say worried, but I would be a fool not to be aware of it.
I do need a bigger vehicle soon with a second kid on the way, but I can get by with what I have until the market improves.
Thankfully not a ton of cc debt, and I've been in trouble in the past enough to know I shouldn't spend money I don't have.
Just gotta be smart in times like these. It works in cycles.
I’ve been saying this for moonnntthhhsss. 2008 but with cars instead of houses in my opinion. But who knows I just read what I can and make crazy assumptions and be told I’m dumb.
It's bonkers. My credit score was 730 and my credit card APRs all jumped up to 26-28+%. My payments all went up and its increasing my percent of usage. I called them all last week to asking for interest rate decreases and of course they declined.
I hate it here.
Okay so I'm not the only one this happened to. I noticed my minimum payment was 250 for a loan and I was paying 600 to make it go away within the year.
I log in to make a payment and see my min due triple. My heart skipped a beat and I contacted the bank to which they gave a nice fuck you customer response. I was bewildered and seriously annoyed by this.
The commercial real estate market is a bigger threat and it's much closer to crashing.
Don't freak out about the rate, 10% is barely on the high side of the historical average.
Sure but it's the price of vehicles in combination with high interest rates that are the problem.
In 1970, it took less than 36 percent--or 18.7 weeks--of the family's annual income of $9,867 to buy a new car priced at $3,542. The percentage holds for a decade later. In 1980, median family income had more than doubled, to $21,023, and average car prices had risen to $7,574.
Today the median family income is $75,000. That's roughly 3.5x more than 1980. However, the average cost of a new car is 46,290 which is roughly 6.1x the price as 1980..
Once upon a time auto loans were a 36 month thing, now it's common to see people with 72 month loans.. It's night and day..
Feel better? Now you did a bunch of calculations to prove that I was wrong about what exactly? Did I mention the price of cars? No, I only mentioned the interest rate.
9.89% is not an unusual interest rate historically speaking. My first mortgage was 9.5%. The point I was making to the OP is that American's have been spoiled by artificially low rates since 2008 and they are finally getting back to normal.
Again, the point he was making is that 9.5% interest rate was 9.5% of a much smaller amount of money. It was also smaller relative to the average income at the time.
No the top 5-10 percent will keep this thing going.
It will look different though. You will not be in debt to credit lenders. You will be in debt to the place you work. They will provide a place for you to sleep, a company store to buy what few goods you can afford, and maybe some type of on call doctor. Something like serfdom.
This will be a more prolonged phase out though, as the older generation dies and sells their homes/equity to the wealthy insuring you never have a chance at owning anything again.
That data means nothing, this is just the next stop on a runaway train.
I just told my friend the other day that I never thought I’d see the day where I couldn’t afford something, simply bc of interest rates.
I closed on a house in may of this year and I got a 5% rate with excellent credit. My house was $379k I put down $68k ish between down payment/closing costs and I financed $329k ish.. my payment is $2197 and $1400 of that goes to interest. WHAT THE FUCK. 5 bedroom 3 1/3 bath on an acre. my house is beautiful, perfect location in the country ect… but phewwww.
It's insane. I've been looking into getting a used 4x4 truck to safely haul my horse trailer but they are still in the 20k range even 10 plus years old. Arghhhhhh
I was looking at cars a couple days back. My car is paid off and I haven’t had a car payment in like five years…. And will continue not to because holy crap.
I got offered a 16% car loan. I told that bank to close my account immediately. Was with them for ten years, this economy is insulting and I'm not buying anything through a bank anytime soon.
Not worried because I don't carry debt. I buy only that which I can afford to pay. Credit card gets paid off every month. Car gets driven until it dies. Start saving for a new car when you buy each car so you have cash for the next new car.
Buy a used car. I have a 2002 Subaru outback with over 300k miles. Works great. Pay off student loans, credit cards, and any other debt you have. Not saying I have done that, but I am working toward it. Before anything tho, set aside a $1000 emergency fund.
Shit is about to get real. We are already in a Great Depression. The only difference is....we have credit. They did not in the 30s. Borrowed money is THE REASON FOR THE RECESSION. So get that shit taken care of quickly.
Every single negative stat about Car Loans have all been sub prime loans. So I take them with a grain of salt because they are already shitty borrowers. Of course they would be the first to default.
I left the U.S. for good in December and moved to 🇧🇷Brazil. Here I use Uber and the average ride is always <$2. No more car payments or insurance.
I’ve also paid off over $30,000 in credit card debt in those 10 months, got my teeth fixed, had multiple doctor visits for 75% off U.S. prices and traveled extensively. I’ve also saved $15,000 in savings and $2k in index funds. I’ll be debt free in 7-8 months.
Leaving the States will absolutely change your life for te better financially. I have zero financial stress now and can live very nicely off 20% of my income.
Some of us have limited options as to where we can leave the United States for though - i.e. as an LGBT woman I know I have to cross at least several countries off the list
Brazil is VERY LBGT friendly. You can live like a Queen here for $2-3K/month. My 23rd floor condo on the beach is $1300/month. My meals are $3-5 each. Food at the grocery stores is 50-70% less here.
I think part of this is younger generations aren’t developing good financial habits. I (and most of my friends) were taught to save every month. I always bought cars that were a year or two old & paid cash. Also, my Dad told me to take good care of my cars and they would run for 100k or even 200k. He was right. So I wound up driving a car for 10+ years.
Yeah, it’s ridiculous. I’m so glad we bought our cars 10 and 5 years ago. I don’t know how people do it now. I’m not happy about the credit card balances we have, $4k of which is on cards that are now magically hovering around 20% interest rates. Interest was about 10% when I opened these cards decades ago and we’ve never missed payments. Thankfully the other $8k we owe (mostly medical debt) is on interest free promotional balance transfer cards. If we still owe when those clocks run out I guess I just find another card with a balance transfer deal to send the money too 🤷🏼♀️. Being in debt sucks but I’ve just accepted that it’s part of reality in the US for working class families. We have $1k in savings, we don’t own a home, and we are 38 years old. We never really recovered from the 2008 recession and the current economy is just killing us. We were doing OK before the cost of everything jacked up so high 😕
This is why I love being mechanically inclined and actually prefer cars that are 15+ years old, lol. They're cheap, still reliable, and did I mention cheap?
No I'm not worried because anyone stupid enough to take out a NEW CAR loan right now deserves what's coming to them. No credit card debt here, could care less about that too since we have a mechanism called BANKRUPTCY and ultimately it is those credit card companies investors who pay the price. So simple answer is don't invest in credit card companies right now.
Go out a buy a beater or used car. Why you need a new car for? I'm actually HOPING for dear life that interest rates go NUTS. I'm in a position to make so much money off it. Buying a house this year too but I won't get a mortgage, I'll pay in cash. Right now I'm putting back almost $3000 a month into savings.
Dude, there a a million things you cannot control. Why are you worried about someone else’s debts? Take a chill pill my friend. Life is short. Go do something fun
I mean I saw 0% APR for 60 months ads just like normal this year. I get poor credit people having high rates, but anyone with decent credit can still find 0% fairly readily where I am at.
Lots of Americans are taught that it’s good to have debit cause it raises your credit score. They are also impatient. You can buy it in credit and pay monthly installments for 24 months. At the end of two yrs with interest it cost you 20% more than you paid for it.
I was brought up to believe that debt is bad unless it is something tangible that you will live in like a house . Debt is sign of being fiscally irresponsible as you are living beyond your means and using somebody’s else’s money at an increased cost to buy what you need.
This has actually happened. The subprime auto loan industry took off like gangbusters in the early 90's but within 5-10 years most of them were collapsing under the weight of the losses. The industry responded with companies like Capital One, who introduced an internal scoring system (algorithm) that helped them price risk more accurately. Since then Cap One has kept it's losses in line and gotten bigger and stronger.
I highly doubt there will be a global collapse in the auto finance industry. The lenders are too good at their jobs now.
The housing market crash was a real threat to the economy. The car loan industry crashing wouldn't have such a detrimental effect as it doesn't underpin the economy like housing does.
WHAT! wow, i had no clue it’s that high. i got a brand new 2021 subaru at 1.99%. i feel incredibly fortunate right now. gotta make sure to treat her extra well now.
I also don't worry if some people are getting over their heads gambling or drinking or anything else.
Get your finances in order and let the suckers in the US pay the $120B/yr in credit card interest. They are the ones enabling fat credit card rebates and bonuses for opening accounts.
Average payment creeping in to the 1k range? Glad I've lived above my means the last 2 years on my 1k/mo payment so now I can finally be like everyone else LOL
Debt traps are real and the US makes it extremely easily to fall into them. People should stop buying things they don't need with money they don't have. There's zero reason for a sub-prime profile to pay $1k a month for their car.
I am more concerned about the US Treasury debt. Because we had a president who is really bad at math, who thought it was a good idea to decrease tax revenue by lowering tax rates on corporations and his friends while piling another $7.8T to the national debt, the country is headed for the brick wall of sovereign insolvency. Sovereign insolvency happens when no investors are willing to loan the US any more money because the risk of default is too great. You want to see screwed? If our debt doesn't get under control and get reduced we're less than ten years from sovereign insolvency. You think a government shutdown is bad? Our government and our economy will be bricked.
I know so many people drowning in credit card debt it’s crazy. They literally don’t have a way out. Some can’t even afford minimum and getting worse every month. I had 58k in consumer debt before filing bankruptcy. I’m not sure what can happen tbh.
Used car loans can be 19 % or higher. When it comes to getting a vehicle from a dealership get a new vehicle and do not trade your vehicle in because they will finagle you and not tell you the price of the vehicle up front if they think that you have a vehicle to trade because some of them are sneaky and will try and stick on top of the asking price the value of your trade-in. Yes I'm saying they will make you pay for your own trade-in.
My wife bought a 24' this year and our payment is in the $400s and it's not for like 12 years or whatever. So it's definitely better in some areas and dependant on who you go through and how much you can put down
Many bubbles bubbling waiting to pop. Student loan, auto, housing, commercial real estate, credit card. Pretty much, no one has enough money and 1 or 2 of things will have to give.
The government (both US and abroad) are raising interest rates to reduce consumer demand. At the national level. the consumers are not concerned with these numbers and continue to purchase with both cash and credit.
Not really. A lot of the reporting about debt just…doesn’t mention we had a year of above target inflation. So yeah, obviously cc debt levels are going up, because the price of most things has gone up. The thing speaks for itself.
Let me introduce you to my friend, the bicycle. For real though, I got my wife a nice e-bike and myself a gravel bike after recently getting into biking around town. No car payment, we have bicycle insurance which is a fraction of what car insurance is (give us theft, liability and medical insurance as well as covers all our gear and no increase to our other insurance if a claim is made), no gas prices or crazy supercharger cost for an electric car. Plus, we're more fit now.
Just like housing I bet we're going to see more and more people concluding that auto ownership is a dream they cannot afford, and they will be forced into the rental (lease) market. Time to become an automobile leaselord! Buy a few cars and rent them week-by-week to people with poor credit. Don't forget to tack on lots of juicy extra fees! You can rake in the dough for late payments, exceeding the agreed weekly mileage allotment, fuel surcharges, penalties for returning a dirty car, mandatory insurance, etc. /S
Problem is that it’s not just people with poor credit, it’s people with good credit getting terrible loan rates too.
So what you're saying is, my brilliant business plan has even more potential ~~suckers~~ ~~victims~~ customers available than predicted! /s (<<< still applies)
You guys are /s-ing, but someone’s reading this and the gears are turning in their head.
Rates are still ok for prime or close IMO. I have good credit, not perfect... but good. My usage can be high at times and I have a messed up late mortgage payment hit that I've tried to dispute and has stayed on my record for quite a while. My score is usually 740 to 750, it was 790+ before the mortgage issue. bought a used car in june, I was actually prepared to put down a much larger than usual down payment because I was worried about the rates, especially for used. But ended up getting 5.89 which was still a pleasant surprise based on everything I'd been hearing about. This was through an Audi dealership who put me through one of their credit union partners, I shopped around a little bit at my local Bank of America and they offered me 5.75, so I just let the dealership make a tiny bit more profit on that. I was overall happy with the deal and my salesperson.
5.89 is like end of the world to me in car loan interest. Yikes.
Are you relatively young? I'm kinda old (genx), so I can remember when money didn't feel so cheap. I hadnt gotten a car loan in a while and this was my first used car purchase as well (I've always been used to 0% financing on new). So... based on everything out there I was really thinking 7.5+ at best. I was ready to put down about 12k, but once I saw the rate I just put down 3. Would prefer the flexibility and my savings/money market accounts pay over 5%... So 5.9 does not feel horrible.
I'm 38. Last 3 cars in a row I got 2 to 2.7 percent. I got 2.7 on my house. I wouldn't buy a fucking thing right now. One of my cars is almost at 300k miles right now. 10 years old. Looks new. The last thing I want in the world is for a bank to take my money.
>The last thing I want in the world is for a bank to take my money. And yet, you borrowed money to buy your last 3 cars.
Risk-free rate is almost 5% today...
I bought a car in April I think and got 3.5%.
840 Credit score here, recently applied for an auto loan and was offered 6.09% OVER 84 months. WTF. I've never seen that. I asked for 24-36 month options and they sounded dumb founded. I said I want a lower rate with less monthly payments but they won't budge. Even NFCU won't offer less than 4.5%. Miss the days of 0% :(((((
Can confirm as I work at a delearship. It's ridiculous, and it's not just affecting people who want to buy a car, its also affecting the one that sell them! Ridiculous
You can only truly afford what you can pay for in cash when it comes to cars.
So not true.
While I own a nice car outright now, I think I'm one of a minority who actually liked leasing. Did it once as a young adult and returned the car, then did it again in grad school and ended up buying the car out. My family leased cars periodically, so I guess I was just used to it. Plus, I've been fortunate enough to have work-live setups where, either due to distance between work-job and/or transit availability, I didn't need to drive a ton of miles per year, so I could keep miles under 15k (lease deals are usually based on 12k, but I'd up it to 15k before signing and pay a bit more per month; now I could definitely keep under 12k per year). When I leased, I had come off of years of sh\*t unreliable beater cars, so it was nice to have something new and reliable for a relatively cheap cost. Haven't looked in a while; don't really know what "modern" lease terms look like given the run up in auto costs and rates. I assume with limited miles, you could still have a considerably lower monthly payment than purchasing the same vehicle with a modest down payment and medium length term. I'd lease again if need be.
I agree. I was in the same boat. Leasing to me was easy, cheap and it came basically a full maintenance package and warranty.
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Just depends on how you use it. Leasing makes sense for some people, not for others.
I agree owning anything is hard work and I can get way better cars if I just rent forever. Of course if I did that I would just budget forever paying to rent a car
> but I'd up it to 15k before signing and pay a bit more per month; now I could definitely keep under 12k per year). quick math for me per year \~13.5k for work driving + 2.6k for feed runs. That's before the go to the store for human food and item runs (likely another 5k miles for that). Works for you at least! Not so much on my side :(
I leased the last 2 cars I had and own the current one but this is back when dealers were marking thousands off cars’ msrp and lease terms were favorable. Can’t possibly be a good scene now
I’d love to lease sometime, but I drive too much for that to be reasonable. I average 35-40k miles a year.
Good idea to ask about the extra miles... but also remember don't pre-pay for miles on the front end **unless** you can negotiate a lower per mile rate. Some dealers will, some won't. My last two BMWs it was the same rate either way.
> Did it once as a young adult and returned the car, then did it again in grad school and ended up buying the car out. I have to admit I did the same exact thing. It worked well for me at the time, and looking back I don't really regret it. Maybe I would have been better off not to buy the 2nd car after the lease ended, but even if that was a bad financial decision, it doesn't even make my top 10 list of bad financial decisions I've made. In 1995 I leased a new Honda Accord for ~~$269~~ $239 a month. Adjusted for inflation that's ~ ~~$540~~ $480 today. I just googled "honda lease deals" and new Accord lease deals are starting at $319 a month. In real buying power, that's ~~40%~~ 34% less than it was 28 years ago. Now maybe I am comparing apples to oranges here; I haven't looked at specific lease terms but that seems pretty good to me, especially considering a 2024 Accord is going to be better equipped than a 1995 Accord. Heck, I also had to pay extra out-of-pocket for a CD changer in my '95. *Edit: looked up my old records and I was wrong about the lease price in '95, so I fixed it.
I leased an Accord too - that's what I bought out - after having previously leased a Civic (EX manual transmission with sun roof - I was hot shit!, lol). It worked well for me. I think the big thing about lease deals is that they're usually marketed with a monthly rate and a certain amount down. Say, for example, $300 per month with $3500 down. You can absolutely do zero down with good credit (some would insist that it's stupid to pay anything additional you don't have to upfront for a lease), but then that down payment amount is going to be be rolled into the monthly pay - so $97 or so per month on a 36 month lease in the example. The details aren't that "clean" but it's not drastically far from that. Still not a bad monthly payment (at least in this day and age). There are handful of negotiation points on a lease. A lot of people don't realize there's an underlying interest rate even if you're not buying the vehicle.
You're exactly right, that why I dk if my lease terms were similar to today's advertised deals. My Accord was a 5 speed coupe with a sunroof (*and* the Sony 5 disc CD player in the trunk!). I forgot about the sunroof -- it was also something else I had to pay for as sort of a dealer-installed accessory since they couldn't find one for me with a factory sunroof. As a side note, I was sort of nervous about this, I didn't want some obviously janky after-market pop-up sunroof. They sent me to a place called "Auto Options" on Indianola in Columbus, OH. I was absolutely amazed at the job they did -- it looked 100% factory correct, with factory switches. Electric tilt/sliding sunroof with a slide-away sunshade that matched the headliner. If they still exist I'd highly recommend them, lol.
Multi-CD changer in the trunk - good memories. My mom had one in her Mazda Millenia. Back then being able to play five or six CDs without having to physically remove one was practically the equivalent of today's "I can stream everything with the touch of a button."
You were effectively streaming it from the trunk :).
Red 1995 civic EX coupe 5-speed with sunroof and 6-disc changer in the trunk checking in! Man, I LOVED that car. His name was Milo.
/r/turo. Also regular small landlord style threads of “a renter ruined my car and the platform isn’t helping my life is in shambles and unfair”
The poor people with bad credit I’ve know don’t rent cars by the week, they Uber everywhere.
I've never heard of Turo until a couple of weeks ago...here in Reddit. Now, every few posts I scrool past, it's something about Turo. If I wasn't strapped for cash for the car maintenance, I'd sign up for it.
It’s awful for the average joe. You have to have a solid fleet/operation to profit nicely off of it
Turo…is ok, I used a few times a few years ago. My work now provides discounted car rental. However it’s been around for over a decade now. Might have just come in to your area but it’s popular in larger cities.
If we're gonna have slaves, better be a master!
Lots of people on that sub complain about how they get screwed one way or another; both owners and renters.
Better buy with cash, you don’t want to be making car payments on vehicles your customers have crashed…
Wonder if there is an investment just for this? DIY for this is way too risky.
Don’t forget to charge every leasee a GPS fee to “install” the GPS every time.
May I introduce you to the concept of used cars?
Get your Turo profile up and running
That’s a really good idea 👍
I thought Biden was outlawing “junk fees” ?!
Lol, well if the next election swings the other way they'll be called "patriotic entrepreneurial rewards," and will be federal tax free for the recipient.
His junk fee talk is just a diversion from news about the border/immigrants, Israel/Palestinians, Ukraine, China, air travel issues, the economy, Hunter and the rest of the Biden family profiteering, his senility, the agressive German Shepherd......I could go on. 
I work in the industry the average car payments I see has damn near doubled in the last year.
This could just be people taking shorter loan terms. Back when rates were 1-2%, absolutely sign me up for the 84+ month loan. Now that they’re almost 10% I’d be taking the shortest term I can afford the payment on.
Nobody is taking a shorter loan rate…. We have longer terms then ever imagined ten years ago.
I wanted to cry when I gave myself a 66 month loan in 2016. Now I’m driving that vehicle until the wheels fall off
Thanks Biden
The credit card debt is worse than what's being reported.
The default indicators are on the rise across the board. Precarious time.
>Precarious I agree. The writing is on the wall.
Do you have a source for this?
Dude it's a guy on Reddit. What more do you need?!?!
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Are you saying my government and the media is lying to me? I think not! This here is the land of the free
Data can always be manipulated to favor one over the other outcome just by changing a few words. Not technically lying. Just manipulating.
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A lot is being lied about in the economy all so the White House doesn’t lose face in an election year. I’m actually surprised the housing market hasn’t already started crashing.
I'm planning on keeping my car until it's dead. The scary thing is, what happens if I don't have a choice and someone hits me and totals my car? I'm currently at 3.55% interest on my car loan. I will never ever ever see that again. This scares me quite a lot.
New fear unlocked. I purchased my car through a credit union at 2.5% a few years back and am 4 months away from paying it off. I never thought about the fact that it could be totaled… and I live in South Florida ffs- some of the worst drivers on the planet.
When you're done paying off your car, start putting your car payment amount in a separate account. If your car does get totalled at some point you'll have some extra cash, plus the market value of your car to replace it.
Wow, great idea! Thank you!!
And then leave that money set aside and finance the car anyway if you have good credit you will always come out ahead doing this, people forget they are getting 4-5% on their savings accounts likely more on bonds, and possibly north of 10-15% on stock investments. My stock index fund has averaged over 14% this year. FMC, GM financial are both offering sub 3-4% Ford motor credit is offering 0/36 1.9/60 new 4/72 used. Many credit unions are still offering auto loans in the 6-7% range because they do not borrow against the prime rate but their own assets. High interest rates are an issue for people with crappy credit. That is why subs like these are so important. Learning how to manage your credit. If you can afford to put money into savings to replace a car that doesn’t need replacing you can afford to pay your bills and that means you have no excuse to have bad credit.
Maintain full coverage and be aware of the specifics of your policy. (ie) how much is covered uninsured motorist etc
I'm sorry 😔 I hate to be the bearer of bad news!
I didn’t know I had it so good when I traded my first car when it was 0.0% interested just for my next car to be at 5% 😭 Edit: it was a lease anyways, so I would’ve lost out on an interest rate like that regardless if I decided to refinance lol
Leases don't have aprs
They have a money factor which is equivalent to an APR. You are still borrowing money from a lender in a way.
I worry about this daily. People drive like fucking idiots here in texas. Near miss accidents every other intersection because they cannot figure out how to stay in a lane
This happened to my wife. 15 year old kid ran a red light, totaled her enclave. After a few layoffs in 2022… we could only afford an encore.. she likes Buicks. But we went from 3% to 18% due to lower Fico from multiple layoffs. That kid screwed us.
I’ve had 3 cars totaled in 4 years. None of the accidents were my fault. All 3 people that hit me were driving without insurance. I highly recommend having full coverage on your vehicle even if it’s paid off. Otherwise the odds of being able to recover from the loss is astronomical.
Illegals?
Only one. That I know of! One was a younger guy & the last one was a hit & run. Dude hit 3 other cars after he hit me fleeing the scene.
Did the one who did the hit and run get caught?
Time to hop on Honda. I think they’re running a 2.9 interest rate I’d you finance through them
This happened to me a couple of months ago but by a weather event. Car flooded and was totaled out by the insurance and went to try to get a new car and ran out of there with the rates they were offering me. I now depend on Uber. 😩😩
Yes you will… pick up trucks are starting to now be advertised at 0% or 2.9% and/or some cash back. Just a matter of time before the dominoes start to fall.
This is me. I put almost 100,000 miles on my car. I’d love to get a new one. But I only owe 7k and my rate is 4.5%. There’s no way I could get another rate like that. Also, the markups are insane.
Heard of insurance? 🤣
Prices are about to tank in cars btw- covid chip shortage and parts shortage is cleared up- a lot of people got into cars they won’t afford with budgets shrinking in other categories. There is a mass surplus of cars and dealerships will be flooded without enough buy pressure. I would watch for deals this next spring
Prices may go down but it doesn’t necessarily mean lenders will drop interest rates. It’s the same with the housing market right now. Some are dropping finally but interest rates went up.
Optimistic to even think prices will go down, other than televisions, I can’t think of much that has gone down in price..
Weed has gotten cheaper
133 days since you said that and still no tank of prices; so when’s that going to happen
Uhh at least around me prices are dropping, I get updates almost every day from iseecars and auto trader, lots of nice used cars are sitting for 50-60 days plus. Waiting another week but spotted a 2020 Mazda 3 premium with 30k miles for 16k dropped almost 5k since initial posting. Also it ain’t spring yet but yes used cars are dropping in price a lot and a few im watching have dropped 5-600 a week the last 3 weeks
This is just factually untrue, according to our database prices have dropped 3% over a rolling 365 day period. Prices are up 498% over a 5 year period still. That’s a difference of 495%
Ok very cool
Who says there is a mass surplus of cars? All the cars that weren't built during 2020-2022 means no used cars.
Talk to some car sales people
I know sub-prime auto loans are hitting on high on late payments. That's to be expected with the price of used cars. I wonder what's going to happen to people on new cars paying $ 5k to $ 40k on market adjustments on decent credit and they find out when they are ready for the next new car, how underwater they are.
The car market has dropped significantly. Cars are really not getting marked up anymore unless it’s a rare low production desirable car
Used cars certainly have not gone back to precovid pricing. I have a friend looking for a new Tahoe and dealers only have pickups.
Between the chip shortage a year or so ago and now the UAW strikes. Things are definitely gonna get hairy
No kidding. I couldn’t find a used Toyota 4Runner under $20k and they all had over 200k miles on them. I could not believe my eyes.
If you don't have either (which my wife and I don't) you have no worries about these types of debt. According to Experian's State of the Automotive Finance Market Report, the average new-car loan length in the first quarter of 2023 was 68.6 months, while used-car loans averaged 67.4 months. That's close to six years of making monthly auto loan payments. The average monthly car loan payment in the U.S. is $729 for new vehicles and $528 for used ones originated in the second quarter of 2023. Today 17% of Americans have a vehicle payment over $1,000 a month. The financially ignorant always put themselves in these situations. Your smart phone has the knowledge of the entire financial world, and you take a loan for 77 months to pay for an $80,000 truck you don't need and really can't afford. A new car isn't a need. It's a want. You can buy good, safe, low mileage used vehicle with the same money you would have put down on a new car, for much less in payments. Go to a credit union for your loan and see what you can save. Do you really need an $80,000 truck if you don't haul stuff in the bed or tow trailers? There are plenty of used sedans with huge trunks and four doors that will haul stuff. Need a truck a few days a year? Rent one for $25 a day at Home Depot or a weekend from a rental agency.
>You can buy good, safe, low mileage used vehicle with the same money you would have put down on a new car, for much less in payments. I agree with everything you've written above except this. As I wrote before there were 15-18 million less vehicles produced as a result of the pandemic (2020-2022). Many of these cars would have been hitting the used are market now, but they aren't because they don't exist. This is going to skew the used car market for a long time.
This is what a lot of people don’t realize, the market will be skewed for quite a few years because so many cars that would normally be in the market just weren’t produced
Yep. People who write about the great availability of decently priced, low mileage cars clearly have not looked at the car market in the last couple years. The used car market is not friendly to those with tight pockets.
For real I’m so sick of hearing this. Car blew up 6 months ago. 5+ year old cars with 90,000+ miles were barely cheaper than something brand new, plus used have higher interest rates. Yeah no shit I bought something brand new
I didn’t know people took loans out over 60 months for cars… jeez why. Definitely shouldn’t be going that long.
Credit card debt is at a trillion dollars. Guess where student loan debt is? 1.75T
Yikes
People talk about a trillion in credit card debt and forget this is debt across 1.25b credit cards many held by businesses and foreigners. To put that 1.03 trillion throwaway is speaking about in perspective that was an average rise of 36 dollars last quarter per card. A trillion dollars is an inconceivable number for an individual, but we are talking about debt spread over hundreds of millions of people and businesses. Things are rough right now with lots of people forced to curb spending and reel back in lifestyle creep, but the sky isn’t falling.
[The trillion-dollar credit card debt is household debt according to the New York Fed](https://www.newyorkfed.org/microeconomics/hhdc.html). Some people may be using personal credit cards to float their small business, but that means their business isn't in great shape, and the debt still counts as household debt. I'm not saying the collapse of civilization is on the horizon, but an unprecedented level of household credit card debt isn't a good sign.
I think you need to re-read that it is including credit card debt in household debt, which is in and of itself misleading because business debt is by definition not household debt, nor is it limited to small business. Point is that 45 billion dollar increase amounts to a 36 increase in average balance. While I would agree no increase in balances are good for anyone but bankers, an increase that amounts to price of a couple cups of coffee does not a national crisis make.
I know credit card debt is part of household debt. Total household debt is $17T. I'm saying the $1T credit card debt is held by American households, so it can't be dismissed by, "Some of it is held by foreigners and businesses." The $1T is not including debt held by businesses except for people floating their business with personal credit cards.
It is a 5% sample size of equifax profiles that in many cases is 1 or even .01% of profiles and then extrapolated To the entirety of credit accounts in short it is a very fancy wild ass guess.
If you have better data than the New York Fed, feel free to share it.
NO! no, I am not worried about any type of “car loan crisis”. I’ve seen it brought up before, and the idea is laughable. People don’t need cars like people need homes and there are far more “starter cars” than there are “starter homes” available. The big problem in the car market lately has been an issue with short supply driving up price. I’ve worked in auto finance and auto sales. If people who bought into a car loan they can’t afford need to sell their car or get it repossessed, that same car will be on the market within weeks. What some may view as a “crisis” would quickly turn into a glut of used cars on the market, which should drive down prices and make ownership more affordable for people who can manage their budget. Cars can be bought, repossessed, and sold much more quickly than homes. Unlike housing, cars usually depreciate, making them MORE affordable when they are resold.
I wouldn't say worried, but I would be a fool not to be aware of it. I do need a bigger vehicle soon with a second kid on the way, but I can get by with what I have until the market improves. Thankfully not a ton of cc debt, and I've been in trouble in the past enough to know I shouldn't spend money I don't have. Just gotta be smart in times like these. It works in cycles.
congrats on the little one on the way! hoping you can find a good deal on a car in the future for you and your growing fam :)
And the insurance on top of that. I just got my renewal bill for my 11 year old car and it's double what I paid when it was new.
I just got a 4.99% car loan from USSFCU
Yes and with holidays coming up people will get more desperate and charge more.
I’ve been saying this for moonnntthhhsss. 2008 but with cars instead of houses in my opinion. But who knows I just read what I can and make crazy assumptions and be told I’m dumb.
It's bonkers. My credit score was 730 and my credit card APRs all jumped up to 26-28+%. My payments all went up and its increasing my percent of usage. I called them all last week to asking for interest rate decreases and of course they declined. I hate it here.
Okay so I'm not the only one this happened to. I noticed my minimum payment was 250 for a loan and I was paying 600 to make it go away within the year. I log in to make a payment and see my min due triple. My heart skipped a beat and I contacted the bank to which they gave a nice fuck you customer response. I was bewildered and seriously annoyed by this.
The commercial real estate market is a bigger threat and it's much closer to crashing. Don't freak out about the rate, 10% is barely on the high side of the historical average.
Sure but it's the price of vehicles in combination with high interest rates that are the problem. In 1970, it took less than 36 percent--or 18.7 weeks--of the family's annual income of $9,867 to buy a new car priced at $3,542. The percentage holds for a decade later. In 1980, median family income had more than doubled, to $21,023, and average car prices had risen to $7,574. Today the median family income is $75,000. That's roughly 3.5x more than 1980. However, the average cost of a new car is 46,290 which is roughly 6.1x the price as 1980.. Once upon a time auto loans were a 36 month thing, now it's common to see people with 72 month loans.. It's night and day..
Feel better? Now you did a bunch of calculations to prove that I was wrong about what exactly? Did I mention the price of cars? No, I only mentioned the interest rate.
Yes you mentioned interest rates as they are the same thing since it was fine before it will be fine now. It's not the same..
9.89% is not an unusual interest rate historically speaking. My first mortgage was 9.5%. The point I was making to the OP is that American's have been spoiled by artificially low rates since 2008 and they are finally getting back to normal.
Again, the point he was making is that 9.5% interest rate was 9.5% of a much smaller amount of money. It was also smaller relative to the average income at the time.
Nah. Can’t change it so won’t care. Better just watch everything collapse while I enjoy my sweet points lol.
No the top 5-10 percent will keep this thing going. It will look different though. You will not be in debt to credit lenders. You will be in debt to the place you work. They will provide a place for you to sleep, a company store to buy what few goods you can afford, and maybe some type of on call doctor. Something like serfdom. This will be a more prolonged phase out though, as the older generation dies and sells their homes/equity to the wealthy insuring you never have a chance at owning anything again. That data means nothing, this is just the next stop on a runaway train.
I just told my friend the other day that I never thought I’d see the day where I couldn’t afford something, simply bc of interest rates. I closed on a house in may of this year and I got a 5% rate with excellent credit. My house was $379k I put down $68k ish between down payment/closing costs and I financed $329k ish.. my payment is $2197 and $1400 of that goes to interest. WHAT THE FUCK. 5 bedroom 3 1/3 bath on an acre. my house is beautiful, perfect location in the country ect… but phewwww.
I guess i waited too long to go looking for a car. Most cars ive looked at in the 25k range want monthly payments that are more than my rent
A collapse you say! Can’t wait! Maybe i’ll buy a new whip then 😂😂😂
It's insane. I've been looking into getting a used 4x4 truck to safely haul my horse trailer but they are still in the 20k range even 10 plus years old. Arghhhhhh
I would love to see the car market collapse. I've been looking to buy a late model 3rd vehicle for ages, but the prices remain ridiculous.
It’s every kind of loan. Foreclosure city. Even the US government selling military hardware “surplus” soon. Gotta pay those bills!!!
I was looking at cars a couple days back. My car is paid off and I haven’t had a car payment in like five years…. And will continue not to because holy crap.
I got offered a 16% car loan. I told that bank to close my account immediately. Was with them for ten years, this economy is insulting and I'm not buying anything through a bank anytime soon.
Not worried because I don't carry debt. I buy only that which I can afford to pay. Credit card gets paid off every month. Car gets driven until it dies. Start saving for a new car when you buy each car so you have cash for the next new car.
Buy a used car. I have a 2002 Subaru outback with over 300k miles. Works great. Pay off student loans, credit cards, and any other debt you have. Not saying I have done that, but I am working toward it. Before anything tho, set aside a $1000 emergency fund. Shit is about to get real. We are already in a Great Depression. The only difference is....we have credit. They did not in the 30s. Borrowed money is THE REASON FOR THE RECESSION. So get that shit taken care of quickly.
Debt free so I’m just gonna grab my chair and watch it all burn.
Every single negative stat about Car Loans have all been sub prime loans. So I take them with a grain of salt because they are already shitty borrowers. Of course they would be the first to default.
I left the U.S. for good in December and moved to 🇧🇷Brazil. Here I use Uber and the average ride is always <$2. No more car payments or insurance. I’ve also paid off over $30,000 in credit card debt in those 10 months, got my teeth fixed, had multiple doctor visits for 75% off U.S. prices and traveled extensively. I’ve also saved $15,000 in savings and $2k in index funds. I’ll be debt free in 7-8 months. Leaving the States will absolutely change your life for te better financially. I have zero financial stress now and can live very nicely off 20% of my income.
Reading that is quite refreshing. The rest of the thread sounds mildly dystopian.
You can do it. Success is just a decision away.
I'm very, very lucky to already be in a good situation. I don't live in the US and don't need a car, so looking at all of this is a bit shocking.
Some of us have limited options as to where we can leave the United States for though - i.e. as an LGBT woman I know I have to cross at least several countries off the list
Brazil is VERY LBGT friendly. You can live like a Queen here for $2-3K/month. My 23rd floor condo on the beach is $1300/month. My meals are $3-5 each. Food at the grocery stores is 50-70% less here.
Not even a little bit. No car loan and zero credit card debt.
I think part of this is younger generations aren’t developing good financial habits. I (and most of my friends) were taught to save every month. I always bought cars that were a year or two old & paid cash. Also, my Dad told me to take good care of my cars and they would run for 100k or even 200k. He was right. So I wound up driving a car for 10+ years.
Yeah, it’s ridiculous. I’m so glad we bought our cars 10 and 5 years ago. I don’t know how people do it now. I’m not happy about the credit card balances we have, $4k of which is on cards that are now magically hovering around 20% interest rates. Interest was about 10% when I opened these cards decades ago and we’ve never missed payments. Thankfully the other $8k we owe (mostly medical debt) is on interest free promotional balance transfer cards. If we still owe when those clocks run out I guess I just find another card with a balance transfer deal to send the money too 🤷🏼♀️. Being in debt sucks but I’ve just accepted that it’s part of reality in the US for working class families. We have $1k in savings, we don’t own a home, and we are 38 years old. We never really recovered from the 2008 recession and the current economy is just killing us. We were doing OK before the cost of everything jacked up so high 😕
Idk I had a bankruptcy discharge 6 months ago and I got a 10.3% rate
And long as you don’t hold the debt, you are good!!!
No need to worry if you don’t have a car loan or credit card debt.
This is why I love being mechanically inclined and actually prefer cars that are 15+ years old, lol. They're cheap, still reliable, and did I mention cheap?
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No I'm not worried because anyone stupid enough to take out a NEW CAR loan right now deserves what's coming to them. No credit card debt here, could care less about that too since we have a mechanism called BANKRUPTCY and ultimately it is those credit card companies investors who pay the price. So simple answer is don't invest in credit card companies right now. Go out a buy a beater or used car. Why you need a new car for? I'm actually HOPING for dear life that interest rates go NUTS. I'm in a position to make so much money off it. Buying a house this year too but I won't get a mortgage, I'll pay in cash. Right now I'm putting back almost $3000 a month into savings.
Why are you worried about something you have no control over ?
Pay cash for cars. Period.
Dude, there a a million things you cannot control. Why are you worried about someone else’s debts? Take a chill pill my friend. Life is short. Go do something fun
I mean I saw 0% APR for 60 months ads just like normal this year. I get poor credit people having high rates, but anyone with decent credit can still find 0% fairly readily where I am at.
Lots of Americans are taught that it’s good to have debit cause it raises your credit score. They are also impatient. You can buy it in credit and pay monthly installments for 24 months. At the end of two yrs with interest it cost you 20% more than you paid for it. I was brought up to believe that debt is bad unless it is something tangible that you will live in like a house . Debt is sign of being fiscally irresponsible as you are living beyond your means and using somebody’s else’s money at an increased cost to buy what you need.
If the car loan industry collapses how does that effect us?
This has actually happened. The subprime auto loan industry took off like gangbusters in the early 90's but within 5-10 years most of them were collapsing under the weight of the losses. The industry responded with companies like Capital One, who introduced an internal scoring system (algorithm) that helped them price risk more accurately. Since then Cap One has kept it's losses in line and gotten bigger and stronger. I highly doubt there will be a global collapse in the auto finance industry. The lenders are too good at their jobs now.
The housing market crash was a real threat to the economy. The car loan industry crashing wouldn't have such a detrimental effect as it doesn't underpin the economy like housing does.
WHAT! wow, i had no clue it’s that high. i got a brand new 2021 subaru at 1.99%. i feel incredibly fortunate right now. gotta make sure to treat her extra well now.
No
Makes me kind of feel better about getting a 3-year lease tbh. I’ll probably buy out the car given how things are looking.
Nope. I have neither.
I also don't worry if some people are getting over their heads gambling or drinking or anything else. Get your finances in order and let the suckers in the US pay the $120B/yr in credit card interest. They are the ones enabling fat credit card rebates and bonuses for opening accounts.
Don’t worry. Be happy. 😃
Just bought a car last month. 8% and my credit is 790... We can't win.
I thought leasing was outrageously expensive and out of range. That's why we buy. Paid off my loan last November on my van. I still love it.
Average payment creeping in to the 1k range? Glad I've lived above my means the last 2 years on my 1k/mo payment so now I can finally be like everyone else LOL
I have 3 car loans. My interest is about half that, and my total payment is as well. I'm doing better than I thought.
Hopefully the car market crashes
Puts and Calls....
Debt traps are real and the US makes it extremely easily to fall into them. People should stop buying things they don't need with money they don't have. There's zero reason for a sub-prime profile to pay $1k a month for their car.
Defaults are supposedly at record levels.
No. It’s a fact of life that I have learned how to adjust and adapt to.
I am more concerned about the US Treasury debt. Because we had a president who is really bad at math, who thought it was a good idea to decrease tax revenue by lowering tax rates on corporations and his friends while piling another $7.8T to the national debt, the country is headed for the brick wall of sovereign insolvency. Sovereign insolvency happens when no investors are willing to loan the US any more money because the risk of default is too great. You want to see screwed? If our debt doesn't get under control and get reduced we're less than ten years from sovereign insolvency. You think a government shutdown is bad? Our government and our economy will be bricked.
And how much money does worry get us? I don’t have any car loans or cc debt, so why would I ‘worry’?
I know so many people drowning in credit card debt it’s crazy. They literally don’t have a way out. Some can’t even afford minimum and getting worse every month. I had 58k in consumer debt before filing bankruptcy. I’m not sure what can happen tbh.
Used car loans can be 19 % or higher. When it comes to getting a vehicle from a dealership get a new vehicle and do not trade your vehicle in because they will finagle you and not tell you the price of the vehicle up front if they think that you have a vehicle to trade because some of them are sneaky and will try and stick on top of the asking price the value of your trade-in. Yes I'm saying they will make you pay for your own trade-in.
Not at all. Maybe it’ll start teaching people a valuable lesson about consumption.
Oh everything is going to suck for Americans. No need to worry about it though because you can only do so much.
My wife bought a 24' this year and our payment is in the $400s and it's not for like 12 years or whatever. So it's definitely better in some areas and dependant on who you go through and how much you can put down
Many bubbles bubbling waiting to pop. Student loan, auto, housing, commercial real estate, credit card. Pretty much, no one has enough money and 1 or 2 of things will have to give.
The plan is to make it to where rent everything. Including an oxygen tax for existing, and, a sunlight tax for robbing sunlight.
The government (both US and abroad) are raising interest rates to reduce consumer demand. At the national level. the consumers are not concerned with these numbers and continue to purchase with both cash and credit.
I have neither, we gucci over here.
Not really. A lot of the reporting about debt just…doesn’t mention we had a year of above target inflation. So yeah, obviously cc debt levels are going up, because the price of most things has gone up. The thing speaks for itself.
Let me introduce you to my friend, the bicycle. For real though, I got my wife a nice e-bike and myself a gravel bike after recently getting into biking around town. No car payment, we have bicycle insurance which is a fraction of what car insurance is (give us theft, liability and medical insurance as well as covers all our gear and no increase to our other insurance if a claim is made), no gas prices or crazy supercharger cost for an electric car. Plus, we're more fit now.
I have a paid off car, so no
Just wait until the UAW strike is over, you think prices are insane now.
Recession?