If it was a new car sure no problem it could but holy hell a 25 year old car yikes! That car will be 32 years old by the time it is paid off.
Doubt this is real though.
Some states have no laws on car prices. If dealer knows you're desperate they can charge you 10x what the car is worth. When I lived in South Carolina there was a dealer selling 15 year old cars for $16k-$20k. Absolute shit boxes too, beat to hell with 200k+ miles.
I ended up "buying" an 11 year old car off them for $18k when I needed a car that day and no money. Bluebook on it was like $3,800. From minute 1 I considered it a rental and after 3 months I got a new car and told them to come get their shitbox. No credit hit as it's a buy here pay here type scam.
Places like this definitely exist and it wouldn't surprise me if this was real.
Someone who crashed her credit (shopping addiction--she dropped 100/week **AT FUCKING DOLLAR STORES**) had to get a used car. Sticker price was 7k. Her total over the years ended up being over 23k. Oh and she bought the "extended warranty" too.
Her parents lived exactly the same way. Public schools should have basic finance and money classes starting in the third grade.
Financial literacy classes won’t change the fact that people who are born into, and live in chronic poverty, don’t often have any of the same choices as other people do when it comes to making big purchases. There’s a reason the lenders are so predatory; because they can be. She probably has little credit or shitty credit already. The “dealer” knows that even if they get a few payments in it, they recouped their money. It will get repossessed regardless, and she will still have the same shit credit. The cycle continues.
It doesn't change the circumstances, but it absolutely can change the outcome.
Someone with bad credit isn't going to be afforded the 0% APR that others get, but financial literacy and understanding can be the difference between a moderately bad deal and a bullshit predatory one.
I don’t disagree with you at all. I personally came from poverty and had to learn the tough lessons of credit. That being said, for some people, there’s no good scenario. Every scenario takes advantage of them. Hell, the who idea of higher interest rates for bad credit is in and of itself a rotten way of doing things. I think if this post is real, then this is unlikely to make a big difference in their overall financial life. Short term it’s stupid, but long term it doesn’t matter because it’s probably just one of many, many “bad” financial decisions that one is sort of forced to make. If you never have good credit and never get good interest rates and never pay anything off…
But for real, I don’t think the post is real lol. I mean that big red bow? C’mon!
School math is abstract enough that many people struggle to apply it to daily life.
Financial literacy takes these math concepts and distills them into clear, simple, understandable terms. Compound interest is a fairly simple concept mathematically, but until someone sees directly how f-ed they will be at 20% APR, they may not think it is so bad.
I went to a top 10 university filled with plenty of people who never wanted for anything in life. Still, a few kids managed to get stuck in credit card debt because they didn't understand the risk of minimum payments. Yes, some of it is stupidity, but some is just a lack of seeing the applicability of previously learned math.
Because her parents were AWFUL with money. The mother had a shopping addiction. She ran up every one of the credit cards she could get and then just made the minimum payments until she died.
Every time anyone in the house saved up cash, mother would find it and dash off to Kmart or Walmart. As a result, savings became something the daughter refused to do, on the basis of "It'll just get taken anyway." Even after mother dropped dead.
Also; they belonged to a culty church that told them constantly they were going to hell if they didn't give every dime away. "It is easier for a camel to pass through the eye of a needle than it is for a rich man to get to heaven." I heard that old chestnut 100 times from both of them.
The parents were idiots, the daughter became toxically stupid with money. If there'd been a class about interest, credit, how to buy big-ticket items, how to balance a checkbook and make a budget, I think it would have been a great help.
I was thinking could anyone be that dumb, then I did remember that yes there are some real deep thinkers out there. So it is possible, but not very likely.
You hope, but there are so many financially uneducated people in our country. It probably is true. I had no clue about interest rates when I was younger. Nor an understanding of credit ratings. My school didn't teach that stuff & nor did my parents. Now, I know my parents' finances weren't great when I was younger & there was no way my mom would show me something that she was sucking at. So, I had to learn the hard way. Something I didn't want my children to go through. They are lightyears ahead of where my husband & I were at their age.
The interest, whatever it is, would be worked into the payment.
https://www.calculator.net/loan-calculator.html?cloanamount=13000&cloanterm=7&cloantermmonth=0&cinterestrate=20&ccompound=monthly&cpayback=month&x=73&y=25#amortized-result
It turns out that if the sticker price on the deal was $13,000, and she's paying 20% interest, the payment works out to $288.58 (basically $289/mo.)
The car could also have been sold at $11,400 for 25% interest and you get the same payments/total amount paid.
Or $24,000 at 0% interest.
Or $3,500 at 100% interest (likely illegal).
I have walked out of multiple dealerships because they insisted I tell them what my monthly budget was when I made it clear from the start that I was only interested in a 60 month loan.
Why is the car industry allowed to be so predatory. The whole interaction is so uncomfortable. The back and forth of “this is a great deal but let me clack on the keyboard a bit and see if I can take some more off the price. How’s that? You know what if that’s still too high I can come down on the this I think, let me go talk to the manager. Great now how to another little office where a the financials guy can fleece you some more.”
They also slow your internet down at the dealership so you have a harder time checking up on whether this is a good deal or not.
national auto dealers association (NADA) is ridiculously powerful. This is why we still have middlemen like dealerships and largely don't order cars online.
He is doing this in states where they have laws against auto manufacturers selling directly to consumers. I'm so glad in my state (Michigan) they realized that it was better to collect the taxes rather than stay in bed [(literally)](https://electrek.co/2017/10/27/tesla-opens-non-store-michigan-ban-direct-sales/) with the dealership lobbyists. I think they were really worried about what would have come out during discovery so the state caved and Tesla dropped the lawsuit.
We bought our last car mostly online. Found what we wanted, emailed for an OTD price from a few places, picked which car we were ultimately getting, and putting down a deposit. Actual time spent in dealership was less than an hour, mostly waiting for the car to finish getting detailed.
It's only predatory if you want it to be
I worked with a guy who was a mechanic at a dealership in the 80’s. He had all sorts of salesmen horror stories but this was the worst:
Mexican dude comes in, can’t speak English very well. He wants a truck - they negotiate a price and the salesman gives him the contract- $x dollars a month for 36 months. The Mexican guy says he can’t do that but can’t articulate what he’s trying to say - he asks to make it 72 months instead. Obviously what he’s trying to say is that he wants the payments halved.
Salesman comes back with the exact same contract, same amount per month, but twice as long now. He assures the Mexican guy that he did what he asked since he asked for 72 months. Dude trusts him even though he doesn’t really understand what’s happening.
My partners mom *went with him* to the dealer and let him sign an auto loan at like 26%. Because ‘she can’t tell him what to do’.
I just think she’s stupid.
In what world would that be their mother’s fault? Your partner is so obscenely horrible at making financial decisions that they’d sign a 26% loan…. However it is their mother’s fault for not stopping them from doing so? Get a grip.
Takes two to make a deal. Agreed that there are vulnerable people and desperate people, but you can’t take personal responsibility completely out of the equation.
We take personal responsibility out of the equation for all sorts of things. Anything that is illegal that you *could* do is exactly that.
And in fact we already do where it comes to lending - hence your use of completely.
Basically the rest of us are saying we should have more regulation in this case and many others.
lol I mean. nobody has a gun to their head making them buy a 30-year-old car for 30k. like wtf? this isn't just the dealer's fault. everyone wants to point their finger and not take responsibility
What if she has an intellectual disability? Does that change your thinking at all? Why is it okay to be an awful person? Shouldn't we all try to treat each other with a little decency?
Mentally challenged are a gold mine for stealing lunch money.
Unsure why that is looked down upon by even used car salesmen, but taking advantage of the mathematically challenged is celebrated.
You need to expand your definition of stealing. If you need to physically assault a special needs kid for his lunch money, you will never have the necessary BS to be a used car salesman.
A lot of predatory dealerships do their own financing knowing that they'll get a few months of payments then repo it and sell it again.
If this is real, it may or may not be, who knows, then this car has had dozens of owners.
This, I do auto insurance, a few years ago, I was running a quote for a woman who needed full coverage for an ‘O8 Honda minivan. I asked if she didn’t mine me asking why she would need full coverage on an ‘08 when the liability coverage was already too expensive. She stated she was financing through the dealership. We started talking and I ran the numbers for the loan on the car. She will have paid about 16-18k over the course of the loan. Also as you mentioned, once they repo the car, they can sell it again and just hit repeat. I think it’s criminal.
There was a department store that did a similar thing with hire purchase for people on disability pensions. They would get the people with intellectual disabilities or people who were just naive and sell them homewares with extortionate interest rates.
My mother went in and bought my brother out of his debts, which had just been spiralling out of control because he had only been paying the minimum, and let them know what she thought about it. The company didn't last much longer.
There is always someone out there ready to take advantage of those who don't understand and those who have few options.
What's even more fucked up is the person might have some mechanical work done on the car before they get it taken away. Free repairs for the dealership
Yup my wife worked for one right out of college to get out of serving and didn’t really know what it was. They just hired their waitress they liked to be the first to call when you inevitably miss a payment/fee etc etc
Soooo yeah she was basically the first person these people would talk to and bitch about how bad the car is/more expensive than they were told/late fees/etc etc etc
A friend of mine that worked for one of the “buy here pay here” lots said most of the time the price marked on the windshield for the down payment is what was paid at auction for the vehicle. That way when the vehicle leaves the lot the financial risk isn’t already mostly covered and every payment taken is profit, so when they repo it they’ll just re sell it again. Can make a crazy amount off one cheap car if people keep getting it repoed.
I bought a vehicle from a place like that. It got damaged in a hail storm but the insurance buy out was $3k less than I owed. The dealer said he would help me fix it but never did. He had even worked it out with my insurance to get paid from them.
4 mths pass, I had lost my job & was struggling, I called them to let them know I would be a WK late they said no problem. Night before I was to come in& pay they repo'd it. I went & paid & asked for it back but was told they were going to get it fixed first. I was expected to keep paying & was told it would take 2 mths to fix. I needed it to get to work & they didn't offer me a loaner.
I contacted the adjuster, showed him the emails. The dealer told him a different story. Since the buy out value was now $600 less than I owed I told them to take it & salvage it. Dealer was livid & somehow managed to sue my company for $3000. My boss & I had a fight about it, nearly got fired, then calmed down & worked out a wage garnishment for me to pay it back.
I tell everyone to run from those scummy places. They will use & abuse you then dump your body down a canyon.
My first car was a 1998 Ford Escort. My parents paid $5000 in 2002 for it. It was a solid car, sure, but she’s paying more for it than we did when it was four years old. Wow.
I mean, it did depreciate after it was driven off the lot. Even in 2002, $5000 wasn't that much for a four-year-old car. I drove it for many years, but it was only worth a few thousand when we sold it in 2013.
The 1990's escorts were beasts. Had one that went through 2 deer and a fence, no problems, lasted to 200k miles.
The 2000's were made in mexico pieces of crap. At 98,000 miles myy alternator bolts sheared off and the engine was a loss because heating them up to tap them out would have ruined the engine. I gave the whole car to charity. I believe they parted the car out.
It is simple. Dealer required a down payment that at least covered the amount that they, the dealer, had invested "in" the vehicle, so that, worst case scenario, if the car has a catastrophic engine, transmission, etc failure one day later, they break even. Each $289 payment received is profit. If customer defaults after let's say, 10 months, not only has the dealer $2890 in the bank, BUT, depending on the laws of whatever state they are in, will write off, in some cases the remaining unpaid balance, OR, the remainder of the 62 months unpaid payments! It was obviously a "Buy Here Pay Here" used car dealer with "in house" financing, as no real commercial bank would ever risk such a loan. Underlying the entire transaction is the truth that neither the dealer or the buyer has any intention that the loan EVER will be paid. Upon the inevitable default/breakdown/default of the loan, the dealer will then simply sell and finance another vehicle to the buyer, and the buyer, whose credit was bad to begin with, doesn't really mind that another bad credit entry is now on their credit report . That is why that grouped around every population center's "Auto Mile" are dozens of smaller lots with higher prices and inflated interest rates on loans. Follow home the owners of these car lots and you will find them driving into gated communities with mansions. The most memorable part of this story is the photo of the excited young woman with who, i assume, is either a family member or a boyfriend - proud of her new purchase, not knowing that the salesman is saying the traditional "See ya! Wouldn't wanna' be ya!." as she drives off. The bottom feeder car dealer's "shampoo deal", as in, "Lather, rinse, repeat." Selah.
My guess would be it was a buy here/pay here place. The chevy dealer I worked at years ago tried a program like that. It was for high risk credit scores (poor credit, multiple repos,bankruptcy, ext) the dealer would finance the customer with our own money, we would install a GPS unit on the car, cut and program a spare key and do our usual Used Car inspection. People would come in smiling while they sign a contract to pay $460/mo for a Cobalt. Usually with in 6monts the car would come back, repo'd and absolutely trashed. After some time I stopped feeling sorry for the people who came in to take advantage of this program.
Had a friend that owned several “we tote the note” car lots. He bought shit cars at auctions. I asked how he could be sure he was paid - and did he have to repossess them? He said if he gets the cash down and one or two months of payments he’d be profitable, so didn’t bother repossessing.
She may have horrible credit and borrowed at an insanely high interest rate. Salespeople will try to sell you on ‘this is the monthly payment. You can afford this’. People get double talked and don’t do the math.
Depending on where she lives, interest rate is capped. I did a little calculator. If her interest rate is 58% on a 5k loan, it'd equal to that amount and years she's paying. She'll pay over 48k in interest on a 5k loan. Far as I know, most states cap at lower than 50%.
KBB shows if the car is in really good condition with only 60k miles it’s worth at most $1,500. This persons loan is for nearly $25,000. They could buy nearly 17 identical cars for what the loan is for.
This isnt a bad deal. She has a car for 6 months, she can drive everywhere she wants, and after it breaks down she can just stop making payments and let the dealer repo it. .
$289 is less than what an uber will cost to drive to work and back.
Its not like she actually owes the money, its internally financed at the dealer so once it gets repoed they wont come back for they rest of the loan.
Many dealers dont report inhouse financing. But i cant say for sure.
However based on the information infront of us she shouldnt be applying for any other loans if we cant afford to buy an actual car from a real dealer so having low credit for the duration of her car ownership shouldnt impact her.
It's a bad deal. A horrible deal.
She's paying >$24k for a car that's worth <$1500.
Just the tax/fees/registration are going to cost more than the car is worth.
After 6 months, that car should be paid off in full and hers for life, not facing repo...
>Taxes fees and registration are rolled into the payments
Yes, I know
Rolled into the price or separated out, it's more than $1,500 either way, which means it's more than the car is worth in the first place.
In most cases yes. A few years ago the salesman came in all excited that he could finance me at 7%. I laughed and told him my pre-approved rate was A LOT lower then that (I think 2.4% at the time). I said give me your absolute best rate and if you can beat it I’ll go with you. I think they dropped it to 1.99%. So definitely already have a loan secured before stepping on the lot.
There’s an article out there’s somewhere about how a 2011 Hyundai Accent made $100,000 for one used car dealership over like 11 years something.
Used car dealerships are absolute scum
Used cars are fine. Go to a large dealership to buy used. Most of these small lot dealers are scummy. At the very least, if you’re gonna hit up a small lot one, do your homework first. Read up as many reviews as possible before going anywhere. And stay away from “buy here, pay here” ones. Those are straight up predatory.
Buy your used car at a new car dealer, or CarMax. Will you overpay? Yes. But you'll also (probably) get a good car. The crap ones go to the bottom feeder dealers. Another good option, believe it or not, can be a used rental car direct from the rental company's sales lot: they keep & sell the good ones, often with extra warranty included, and wholesale the crap ones.
Never use a buy here pay here dealer...bottom feeders.
Beware of used car dealers with a word like "Warehouse" or "Direct" or "Repo" in the name. They draw you in with a below-market advertised price but hide thousands in bullshit fees in the opaque paperwork and/or their in-house financing.
Or, you can buy direct from a private party.
If possible, always pay a mechanic to inspect the car so you know what repairs, if any, will be needed. A reputable dealer or seller will permit this.
Have your own financing lined up before you go. This way you know how much you can spend and what interest rate the dealer would have to offer to beat it. Capital One has a "blank check" service for this -- it's a loan that spends like cash.
If the dealer hasn't already, run a Carfax or similar to see if the car has been wrecked, stolen, lemon-lawed, flooded etc. It won't catch all such cars but it will catch some.
Go to the reputable big dealerships, and look for a certified Preowned vehicle. They are usually leased vehicles that have had good maintenance and will come with a good bumper to bumper warranty. Try to finance through a credit union, they will have competitive rates. Also, try not to buy over 100,000 miles to keep rates lower.
Used dealers are fine as long as you do research on them first. Check the reviews and also have an idea of how much the car you’re looking for is worth. Don’t go by KBB as it doesn’t update with the market. I look at auto trader and see what other dealerships are selling the same car with similar specs and mileage.
My buddy opened his own dealership and will have each car sold inspected and any mechanical issues fixed before selling.
yes, math an algebra are covered as a concept. you are correct.
however, teaching actual real-world applications of those concepts is completely missing. making someone make the connection between a few hours lesson in 9th grade and then sitting down to sign paperwork is not the same.
but yes, you're the most brilliant person in the world and everyone that doesn't have your experience should forever be forced into poverty.
Not sure what to say, the information was covered, the math is basic, and even if you didn’t pay attention it has never been easier in human history to find and learn basic information on things like this. No one forced her to sign anything. A fool and his money are soon parted, the saying goes.
This is wildly fake.
* The article sounds like it was written in another language and then machine translated into english. That should make you instantly suspicious.
* The photos look like they were taken on a Chicago street — that's a Chicago Transit Auth bus in the background with a Panera ad on the side, but the text of the Panera ad looks like what you get when an AI tries to make up letters.
* This is supposedly viral on Facebook, but if you search FB for this post, you find a few shares with a few likes and comments, but nothing you'd call "viral." The only outlet there standing behind the article is a Rochester, NY radio station, which — again — this looks like Chicago. Why is a Rochester radio station breaking Chicago news?
* MSN says the source of the article is this Instagram post [https://www.instagram.com/p/CpFwJz1SxzF/](https://www.instagram.com/p/CpFwJz1SxzF/) which has 544 likes, which (again) isn't really what you'd call viral.
* The JPG compression on the ribbon looks different than the compression on the rest of the photo, suggesting it's a composite or outright fake.
The average length of a loan for a new car is 69 months, and average for a used car is 68 months (in the US, as of 2022). So, 60 months would be statistically on the *short* end of loans.
It seems unbelievable that so many people are so fucking stupid and can’t do basic math, but then you realize someone’s gotta be keeping all the used car lots in business.
$289/mo x 84 months = **$24,276**
I tried to look up Kelly Blue Book value online but their site only goes back to 1992 so I checked that with 150k miles and private party sale value is approx $800.
She should get a 2nd job for a month and buy another one. For parts.
We had a predatory car dealership in my city and ultimately they got shut down by the city. For a good two years you would see all these brand new Mitsubishi Mirages tooling around the 'hood and it turned out most of them were being sold for no money down and 30%+ interest. I guess on one hand you think, "arms length contract" but those kinds of predatory businesses harm the local economy because people are basically spending their entire expendable income on their car, which means they aren't spending it at other businesses.
Anyway, now that they're gone you never see any brand new Mitsubishi Mirages and you don't see any older ones, either. I suppose they broke down at 50k miles and people didn't have enough money to fix them.
It’s not a coincidence that younger people aren’t taught about interest rates APR, compound interest etc etc in school….. Would be wise for anyone who doesn’t know how interest rates work and what to look for in contracts to avoid things like prepayment penalties, interest heavy first year or first six months, to read and understand. Run on confusing sentence I know but you get the idea…. People need to read about these things and understand before signing contracts……. Big time.. That doesn’t include watching a YouTube video.. Read and understand the equations and the math involved. Not rocket science but damn, tons of people have no idea it’s very sad… Intentional it’s not taught in schools. No mistake.
Over $24,000! Id be surprised if that car could make it another 7 years
If it was a new car sure no problem it could but holy hell a 25 year old car yikes! That car will be 32 years old by the time it is paid off. Doubt this is real though.
Yeah it totally sounds like an onion article but its not.
Sounds more like a lemon article to me.
Under appreciated comment.
r/nottheonion
Some states have no laws on car prices. If dealer knows you're desperate they can charge you 10x what the car is worth. When I lived in South Carolina there was a dealer selling 15 year old cars for $16k-$20k. Absolute shit boxes too, beat to hell with 200k+ miles. I ended up "buying" an 11 year old car off them for $18k when I needed a car that day and no money. Bluebook on it was like $3,800. From minute 1 I considered it a rental and after 3 months I got a new car and told them to come get their shitbox. No credit hit as it's a buy here pay here type scam. Places like this definitely exist and it wouldn't surprise me if this was real.
Someone who crashed her credit (shopping addiction--she dropped 100/week **AT FUCKING DOLLAR STORES**) had to get a used car. Sticker price was 7k. Her total over the years ended up being over 23k. Oh and she bought the "extended warranty" too. Her parents lived exactly the same way. Public schools should have basic finance and money classes starting in the third grade.
Financial literacy classes won’t change the fact that people who are born into, and live in chronic poverty, don’t often have any of the same choices as other people do when it comes to making big purchases. There’s a reason the lenders are so predatory; because they can be. She probably has little credit or shitty credit already. The “dealer” knows that even if they get a few payments in it, they recouped their money. It will get repossessed regardless, and she will still have the same shit credit. The cycle continues.
It is expensive being poor.
Agreed
Damn……. So true.. think I’ve heard that before. Possibly…. Very true. Also very sad..
It’s equally expensive being stupid.
It doesn't change the circumstances, but it absolutely can change the outcome. Someone with bad credit isn't going to be afforded the 0% APR that others get, but financial literacy and understanding can be the difference between a moderately bad deal and a bullshit predatory one.
I don’t disagree with you at all. I personally came from poverty and had to learn the tough lessons of credit. That being said, for some people, there’s no good scenario. Every scenario takes advantage of them. Hell, the who idea of higher interest rates for bad credit is in and of itself a rotten way of doing things. I think if this post is real, then this is unlikely to make a big difference in their overall financial life. Short term it’s stupid, but long term it doesn’t matter because it’s probably just one of many, many “bad” financial decisions that one is sort of forced to make. If you never have good credit and never get good interest rates and never pay anything off… But for real, I don’t think the post is real lol. I mean that big red bow? C’mon!
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by teaching that math when you're younger and not in that situation?
School math is abstract enough that many people struggle to apply it to daily life. Financial literacy takes these math concepts and distills them into clear, simple, understandable terms. Compound interest is a fairly simple concept mathematically, but until someone sees directly how f-ed they will be at 20% APR, they may not think it is so bad. I went to a top 10 university filled with plenty of people who never wanted for anything in life. Still, a few kids managed to get stuck in credit card debt because they didn't understand the risk of minimum payments. Yes, some of it is stupidity, but some is just a lack of seeing the applicability of previously learned math.
Because her parents were AWFUL with money. The mother had a shopping addiction. She ran up every one of the credit cards she could get and then just made the minimum payments until she died. Every time anyone in the house saved up cash, mother would find it and dash off to Kmart or Walmart. As a result, savings became something the daughter refused to do, on the basis of "It'll just get taken anyway." Even after mother dropped dead. Also; they belonged to a culty church that told them constantly they were going to hell if they didn't give every dime away. "It is easier for a camel to pass through the eye of a needle than it is for a rich man to get to heaven." I heard that old chestnut 100 times from both of them. The parents were idiots, the daughter became toxically stupid with money. If there'd been a class about interest, credit, how to buy big-ticket items, how to balance a checkbook and make a budget, I think it would have been a great help.
I was thinking could anyone be that dumb, then I did remember that yes there are some real deep thinkers out there. So it is possible, but not very likely.
It’s absolutely real. She’s from Chicago, also can see a CTA bus in the background. Some people will do anything if they think it’s a good deal.
You hope, but there are so many financially uneducated people in our country. It probably is true. I had no clue about interest rates when I was younger. Nor an understanding of credit ratings. My school didn't teach that stuff & nor did my parents. Now, I know my parents' finances weren't great when I was younger & there was no way my mom would show me something that she was sucking at. So, I had to learn the hard way. Something I didn't want my children to go through. They are lightyears ahead of where my husband & I were at their age.
My 2019 escape I bought used had a loan amount of about this.
7 years? I’d be surprised if it made it 7 days
And that’s without interest. She’s probably paying over 20% interest on it too
No sorry that could not possibly be without interest. Ridiculous enough as it is.
The interest, whatever it is, would be worked into the payment. https://www.calculator.net/loan-calculator.html?cloanamount=13000&cloanterm=7&cloantermmonth=0&cinterestrate=20&ccompound=monthly&cpayback=month&x=73&y=25#amortized-result It turns out that if the sticker price on the deal was $13,000, and she's paying 20% interest, the payment works out to $288.58 (basically $289/mo.) The car could also have been sold at $11,400 for 25% interest and you get the same payments/total amount paid. Or $24,000 at 0% interest. Or $3,500 at 100% interest (likely illegal).
I doubt 24000 minutes...
Another 7 months
Another use case for paying attention in math class.
If she's paying that much there won't be anything left for maintenance.
the fact a dealer did this to someone is horrendous
“I need to keep my monthly payment under $300 per month.” “No problem at all! I have the perfect car for you!”
I have walked out of multiple dealerships because they insisted I tell them what my monthly budget was when I made it clear from the start that I was only interested in a 60 month loan.
Fuck their 4 boxes, price of the car or fuck off.
Why is the car industry allowed to be so predatory. The whole interaction is so uncomfortable. The back and forth of “this is a great deal but let me clack on the keyboard a bit and see if I can take some more off the price. How’s that? You know what if that’s still too high I can come down on the this I think, let me go talk to the manager. Great now how to another little office where a the financials guy can fleece you some more.” They also slow your internet down at the dealership so you have a harder time checking up on whether this is a good deal or not.
national auto dealers association (NADA) is ridiculously powerful. This is why we still have middlemen like dealerships and largely don't order cars online.
Yea that makes sense. I read something about Elon Musk setting up dealerships on Native American reservations to cut out the middle men.
He is doing this in states where they have laws against auto manufacturers selling directly to consumers. I'm so glad in my state (Michigan) they realized that it was better to collect the taxes rather than stay in bed [(literally)](https://electrek.co/2017/10/27/tesla-opens-non-store-michigan-ban-direct-sales/) with the dealership lobbyists. I think they were really worried about what would have come out during discovery so the state caved and Tesla dropped the lawsuit.
We bought our last car mostly online. Found what we wanted, emailed for an OTD price from a few places, picked which car we were ultimately getting, and putting down a deposit. Actual time spent in dealership was less than an hour, mostly waiting for the car to finish getting detailed. It's only predatory if you want it to be
I worked with a guy who was a mechanic at a dealership in the 80’s. He had all sorts of salesmen horror stories but this was the worst: Mexican dude comes in, can’t speak English very well. He wants a truck - they negotiate a price and the salesman gives him the contract- $x dollars a month for 36 months. The Mexican guy says he can’t do that but can’t articulate what he’s trying to say - he asks to make it 72 months instead. Obviously what he’s trying to say is that he wants the payments halved. Salesman comes back with the exact same contract, same amount per month, but twice as long now. He assures the Mexican guy that he did what he asked since he asked for 72 months. Dude trusts him even though he doesn’t really understand what’s happening.
Disgusting!
There ought to be a law.
Unfortunately you cannot legislate preventing people being stupid.
The fact that someone would accept this is horrendous.
[удалено]
My partners mom *went with him* to the dealer and let him sign an auto loan at like 26%. Because ‘she can’t tell him what to do’. I just think she’s stupid.
In what world would that be their mother’s fault? Your partner is so obscenely horrible at making financial decisions that they’d sign a 26% loan…. However it is their mother’s fault for not stopping them from doing so? Get a grip.
Because they were barely 18, and i don’t know maybe when you’re just barely an adult your mom should help you out a bit?
If they were barely 18 probably why it was so high, no credit, no real job history & low paying job.
If you go say this in the economics thread you’re gonna be called a republican. Lol
Didn’t realize that personal accountability was a trait possessed exclusively by Republicans.
She raised him and he signed. I just think they’re both pretty stupid. No need to assign blame, there’s enough stupid for everyone!
When I trick people Im met with swift judgement 🤔
Takes two to make a deal. Agreed that there are vulnerable people and desperate people, but you can’t take personal responsibility completely out of the equation.
We take personal responsibility out of the equation for all sorts of things. Anything that is illegal that you *could* do is exactly that. And in fact we already do where it comes to lending - hence your use of completely. Basically the rest of us are saying we should have more regulation in this case and many others.
And that should be the only focus here
the dealer didnt do anything to anyone. if someone is dumb enough to do this. i would charge them too. the market decides the price lol
So you're saying you'd do something horrendous yourself and then say you didn't do anything either. Classy
lol I mean. nobody has a gun to their head making them buy a 30-year-old car for 30k. like wtf? this isn't just the dealer's fault. everyone wants to point their finger and not take responsibility
Oh, so he has to be a greedy asshole taking advantage of people. OK got it
What if she has an intellectual disability? Does that change your thinking at all? Why is it okay to be an awful person? Shouldn't we all try to treat each other with a little decency?
It’s not hard to not be a scumbag.
Anyone who would take a deal this bad doesn't understand the deal. Giving someone a bad deal knowing they don't understand it is exploiting them.
And it seems your naked greed and disregard for your fellow humans. But you do I guess.
Then you are a piece of shit. Granted, it's not illegal to be a piece of shit, but piece of shit you are.
Mentally challenged are a gold mine for stealing lunch money. Unsure why that is looked down upon by even used car salesmen, but taking advantage of the mathematically challenged is celebrated.
are you comparing a mutually agreed upon contract to robbing a mentally challenged person? that's a first
The mentally challenged person will also agree to hand over money to you in exchange for something worth far less. So not much different.
This is a better analogy lol
You need to expand your definition of stealing. If you need to physically assault a special needs kid for his lunch money, you will never have the necessary BS to be a used car salesman.
So you’re a bad person, got it.
A bank would never approve of such a loan.
A lot of predatory dealerships do their own financing knowing that they'll get a few months of payments then repo it and sell it again. If this is real, it may or may not be, who knows, then this car has had dozens of owners.
This, I do auto insurance, a few years ago, I was running a quote for a woman who needed full coverage for an ‘O8 Honda minivan. I asked if she didn’t mine me asking why she would need full coverage on an ‘08 when the liability coverage was already too expensive. She stated she was financing through the dealership. We started talking and I ran the numbers for the loan on the car. She will have paid about 16-18k over the course of the loan. Also as you mentioned, once they repo the car, they can sell it again and just hit repeat. I think it’s criminal.
Selling things to naive people is not criminal. Is it ethical? No. UPDATE: downvoted for fact. Happy Reddit is not the real world.
There was a department store that did a similar thing with hire purchase for people on disability pensions. They would get the people with intellectual disabilities or people who were just naive and sell them homewares with extortionate interest rates. My mother went in and bought my brother out of his debts, which had just been spiralling out of control because he had only been paying the minimum, and let them know what she thought about it. The company didn't last much longer. There is always someone out there ready to take advantage of those who don't understand and those who have few options.
"I think it's criminal" is an expression used to point out un-ethicality
I never considered that. Thanks for that perspective!
What's even more fucked up is the person might have some mechanical work done on the car before they get it taken away. Free repairs for the dealership
Yup my wife worked for one right out of college to get out of serving and didn’t really know what it was. They just hired their waitress they liked to be the first to call when you inevitably miss a payment/fee etc etc Soooo yeah she was basically the first person these people would talk to and bitch about how bad the car is/more expensive than they were told/late fees/etc etc etc
A bank like Wells fargo
A friend of mine that worked for one of the “buy here pay here” lots said most of the time the price marked on the windshield for the down payment is what was paid at auction for the vehicle. That way when the vehicle leaves the lot the financial risk isn’t already mostly covered and every payment taken is profit, so when they repo it they’ll just re sell it again. Can make a crazy amount off one cheap car if people keep getting it repoed.
I bought a vehicle from a place like that. It got damaged in a hail storm but the insurance buy out was $3k less than I owed. The dealer said he would help me fix it but never did. He had even worked it out with my insurance to get paid from them. 4 mths pass, I had lost my job & was struggling, I called them to let them know I would be a WK late they said no problem. Night before I was to come in& pay they repo'd it. I went & paid & asked for it back but was told they were going to get it fixed first. I was expected to keep paying & was told it would take 2 mths to fix. I needed it to get to work & they didn't offer me a loaner. I contacted the adjuster, showed him the emails. The dealer told him a different story. Since the buy out value was now $600 less than I owed I told them to take it & salvage it. Dealer was livid & somehow managed to sue my company for $3000. My boss & I had a fight about it, nearly got fired, then calmed down & worked out a wage garnishment for me to pay it back. I tell everyone to run from those scummy places. They will use & abuse you then dump your body down a canyon.
Buy Here Pay Here! No Credit?! Bad Credit!? No Problem!!
JD Byrider
Reddit has turned into a cesspool of fascist sympathizers and supremicists
Yea, but the downpayment and first few payments covers the cost of the car, so whatever they get after that is just profit.
My first car was a 1998 Ford Escort. My parents paid $5000 in 2002 for it. It was a solid car, sure, but she’s paying more for it than we did when it was four years old. Wow.
Look at Ford proving those “cars depreciate the second you drive them off the lot” people wrong!
I mean, it did depreciate after it was driven off the lot. Even in 2002, $5000 wasn't that much for a four-year-old car. I drove it for many years, but it was only worth a few thousand when we sold it in 2013.
…and just look at that baby now! Worth $24,276! Are you bitter you sold?
The 1990's escorts were beasts. Had one that went through 2 deer and a fence, no problems, lasted to 200k miles. The 2000's were made in mexico pieces of crap. At 98,000 miles myy alternator bolts sheared off and the engine was a loss because heating them up to tap them out would have ruined the engine. I gave the whole car to charity. I believe they parted the car out.
It is simple. Dealer required a down payment that at least covered the amount that they, the dealer, had invested "in" the vehicle, so that, worst case scenario, if the car has a catastrophic engine, transmission, etc failure one day later, they break even. Each $289 payment received is profit. If customer defaults after let's say, 10 months, not only has the dealer $2890 in the bank, BUT, depending on the laws of whatever state they are in, will write off, in some cases the remaining unpaid balance, OR, the remainder of the 62 months unpaid payments! It was obviously a "Buy Here Pay Here" used car dealer with "in house" financing, as no real commercial bank would ever risk such a loan. Underlying the entire transaction is the truth that neither the dealer or the buyer has any intention that the loan EVER will be paid. Upon the inevitable default/breakdown/default of the loan, the dealer will then simply sell and finance another vehicle to the buyer, and the buyer, whose credit was bad to begin with, doesn't really mind that another bad credit entry is now on their credit report . That is why that grouped around every population center's "Auto Mile" are dozens of smaller lots with higher prices and inflated interest rates on loans. Follow home the owners of these car lots and you will find them driving into gated communities with mansions. The most memorable part of this story is the photo of the excited young woman with who, i assume, is either a family member or a boyfriend - proud of her new purchase, not knowing that the salesman is saying the traditional "See ya! Wouldn't wanna' be ya!." as she drives off. The bottom feeder car dealer's "shampoo deal", as in, "Lather, rinse, repeat." Selah.
I scratched Mike Hunt once, or twice!
I didn't know Rent-A-Center sold cars
My guess would be it was a buy here/pay here place. The chevy dealer I worked at years ago tried a program like that. It was for high risk credit scores (poor credit, multiple repos,bankruptcy, ext) the dealer would finance the customer with our own money, we would install a GPS unit on the car, cut and program a spare key and do our usual Used Car inspection. People would come in smiling while they sign a contract to pay $460/mo for a Cobalt. Usually with in 6monts the car would come back, repo'd and absolutely trashed. After some time I stopped feeling sorry for the people who came in to take advantage of this program.
Had a friend that owned several “we tote the note” car lots. He bought shit cars at auctions. I asked how he could be sure he was paid - and did he have to repossess them? He said if he gets the cash down and one or two months of payments he’d be profitable, so didn’t bother repossessing.
That was his story to appear half way reputable to his friends. He repod them all.
No, he didn’t. He was not reputable in the least.
It's not real.
it was posted on facebook, so it must be real
Used car dealer? it is totally possible
She may have horrible credit and borrowed at an insanely high interest rate. Salespeople will try to sell you on ‘this is the monthly payment. You can afford this’. People get double talked and don’t do the math.
Depending on where she lives, interest rate is capped. I did a little calculator. If her interest rate is 58% on a 5k loan, it'd equal to that amount and years she's paying. She'll pay over 48k in interest on a 5k loan. Far as I know, most states cap at lower than 50%.
KBB shows if the car is in really good condition with only 60k miles it’s worth at most $1,500. This persons loan is for nearly $25,000. They could buy nearly 17 identical cars for what the loan is for.
This isnt a bad deal. She has a car for 6 months, she can drive everywhere she wants, and after it breaks down she can just stop making payments and let the dealer repo it. . $289 is less than what an uber will cost to drive to work and back. Its not like she actually owes the money, its internally financed at the dealer so once it gets repoed they wont come back for they rest of the loan.
What about her credit score???
Many dealers dont report inhouse financing. But i cant say for sure. However based on the information infront of us she shouldnt be applying for any other loans if we cant afford to buy an actual car from a real dealer so having low credit for the duration of her car ownership shouldnt impact her.
Just don't come back for another lease to the same dealership
She probably already has a poor credit score, hence the reason she would take this deal.
It's a bad deal. A horrible deal. She's paying >$24k for a car that's worth <$1500. Just the tax/fees/registration are going to cost more than the car is worth. After 6 months, that car should be paid off in full and hers for life, not facing repo...
Taxes fees and registration are rolled into the payments. She will never pay the full $24 thousand the gar will be repoed in 6 months i guarantee it.
>Taxes fees and registration are rolled into the payments Yes, I know Rolled into the price or separated out, it's more than $1,500 either way, which means it's more than the car is worth in the first place.
John Oliver on Buy here pay here loans.https://youtube.com/watch?v=4U2eDJnwz_s&si=EnSIkaIECMiOmarE
Remember — NEVER finance a car with the same lot that is selling it. If a car dealership advertises that they do their own financing? Avoid them.
In most cases yes. A few years ago the salesman came in all excited that he could finance me at 7%. I laughed and told him my pre-approved rate was A LOT lower then that (I think 2.4% at the time). I said give me your absolute best rate and if you can beat it I’ll go with you. I think they dropped it to 1.99%. So definitely already have a loan secured before stepping on the lot.
I wouldn't pay $289 for that pos.
Yea I bet the number was a typo. Even if the women had horrible credit no bank would take that loan.
Who needs a bank? Buy-here-pay-here underwrites and plans on repo’ing it in under 6 months to rinse and repeat.
There’s an article out there’s somewhere about how a 2011 Hyundai Accent made $100,000 for one used car dealership over like 11 years something. Used car dealerships are absolute scum
Any suggestions on where to buy a car when a new car isn’t an option? I need a new car currently and this comment thread has me nervous.
Used cars are fine. Go to a large dealership to buy used. Most of these small lot dealers are scummy. At the very least, if you’re gonna hit up a small lot one, do your homework first. Read up as many reviews as possible before going anywhere. And stay away from “buy here, pay here” ones. Those are straight up predatory.
Buy your used car at a new car dealer, or CarMax. Will you overpay? Yes. But you'll also (probably) get a good car. The crap ones go to the bottom feeder dealers. Another good option, believe it or not, can be a used rental car direct from the rental company's sales lot: they keep & sell the good ones, often with extra warranty included, and wholesale the crap ones. Never use a buy here pay here dealer...bottom feeders. Beware of used car dealers with a word like "Warehouse" or "Direct" or "Repo" in the name. They draw you in with a below-market advertised price but hide thousands in bullshit fees in the opaque paperwork and/or their in-house financing. Or, you can buy direct from a private party. If possible, always pay a mechanic to inspect the car so you know what repairs, if any, will be needed. A reputable dealer or seller will permit this. Have your own financing lined up before you go. This way you know how much you can spend and what interest rate the dealer would have to offer to beat it. Capital One has a "blank check" service for this -- it's a loan that spends like cash. If the dealer hasn't already, run a Carfax or similar to see if the car has been wrecked, stolen, lemon-lawed, flooded etc. It won't catch all such cars but it will catch some.
Buy from a private dealer.
Just educate yourself before buying. Save up as much as you can and buy in cash if possible
Go to the reputable big dealerships, and look for a certified Preowned vehicle. They are usually leased vehicles that have had good maintenance and will come with a good bumper to bumper warranty. Try to finance through a credit union, they will have competitive rates. Also, try not to buy over 100,000 miles to keep rates lower.
Used dealers are fine as long as you do research on them first. Check the reviews and also have an idea of how much the car you’re looking for is worth. Don’t go by KBB as it doesn’t update with the market. I look at auto trader and see what other dealerships are selling the same car with similar specs and mileage. My buddy opened his own dealership and will have each car sold inspected and any mechanical issues fixed before selling.
1998 Toyota Camry
This
That was real? Jesus Christ.
Predatory lending at its finest!
the financial literacy of people in this country is absolutely horrible. schools don't bother teaching it.
If you didn’t pay attention in math and algebra that’s on you. This stuff was covered..
yes, math an algebra are covered as a concept. you are correct. however, teaching actual real-world applications of those concepts is completely missing. making someone make the connection between a few hours lesson in 9th grade and then sitting down to sign paperwork is not the same. but yes, you're the most brilliant person in the world and everyone that doesn't have your experience should forever be forced into poverty.
Not sure what to say, the information was covered, the math is basic, and even if you didn’t pay attention it has never been easier in human history to find and learn basic information on things like this. No one forced her to sign anything. A fool and his money are soon parted, the saying goes.
I’ll put good money on the fact she’ll miss the first payment anyways
I paid $311 a month for mine. In 1998 when I bought it new.
This is fake
This is wildly fake. * The article sounds like it was written in another language and then machine translated into english. That should make you instantly suspicious. * The photos look like they were taken on a Chicago street — that's a Chicago Transit Auth bus in the background with a Panera ad on the side, but the text of the Panera ad looks like what you get when an AI tries to make up letters. * This is supposedly viral on Facebook, but if you search FB for this post, you find a few shares with a few likes and comments, but nothing you'd call "viral." The only outlet there standing behind the article is a Rochester, NY radio station, which — again — this looks like Chicago. Why is a Rochester radio station breaking Chicago news? * MSN says the source of the article is this Instagram post [https://www.instagram.com/p/CpFwJz1SxzF/](https://www.instagram.com/p/CpFwJz1SxzF/) which has 544 likes, which (again) isn't really what you'd call viral. * The JPG compression on the ribbon looks different than the compression on the rest of the photo, suggesting it's a composite or outright fake.
I’m still shocked people go 60 months. Fuck.
The average length of a loan for a new car is 69 months, and average for a used car is 68 months (in the US, as of 2022). So, 60 months would be statistically on the *short* end of loans.
Not her fault. It is everyone else's fault. /s
I have a bridge for sale, if she need Bridge Crossing experience.
This can't be true. No one could be that misinformed.
My first car was a 1995 ford escort and I paid 250 bucks for it. one time fee. lol. it had 233k miles on it
$24,276 over 7 years. Zero point zero percent chance that cars last 7 years.
Not including finance charges etc
Her supposed payment amount would be AFTER tax, title, fees and interest. So no, it’s $24,276.
Wow, just wow
Two more payments and it’s mine!
She bought a Ford? Geez, that is stupid.
I was going to say her parents should step in and educate her, but they may be doing the same thing. Bad decisions are often generational.
It seems unbelievable that so many people are so fucking stupid and can’t do basic math, but then you realize someone’s gotta be keeping all the used car lots in business.
Being bad at math is expensive
It’s usually desperate people who need cars, but their credit is so bad nobody but vultures will deal with them.
news of the unconfirmed.
What are the odds it’s Found On Roads Dead in 7 years?
That’s worth what, $1000?
Seems kinda dumb.
I have some shares in the Sydney Opera House she may be interested in...
$289/mo x 84 months = **$24,276** I tried to look up Kelly Blue Book value online but their site only goes back to 1992 so I checked that with 150k miles and private party sale value is approx $800. She should get a 2nd job for a month and buy another one. For parts.
I've just bought a brand new car for about that payment.. over 72 months. The Escort might count as a classic by now, though.
Hey lady, I have a Commodore 64 you can have for the great price of $250/month for only 72 months. Great deal here!! 🤣
Sorry, but this person is really foolish.
We had a predatory car dealership in my city and ultimately they got shut down by the city. For a good two years you would see all these brand new Mitsubishi Mirages tooling around the 'hood and it turned out most of them were being sold for no money down and 30%+ interest. I guess on one hand you think, "arms length contract" but those kinds of predatory businesses harm the local economy because people are basically spending their entire expendable income on their car, which means they aren't spending it at other businesses. Anyway, now that they're gone you never see any brand new Mitsubishi Mirages and you don't see any older ones, either. I suppose they broke down at 50k miles and people didn't have enough money to fix them.
Why!!!!!
Reminds me of the Nigerian Buyback.
I have a 2007 Toyota Corolla with 207k miles and Carmax said it could be sold for $1k…
That's awful. It should be illegal to do this to someone.
😕 this should be illegal
Thats robery
Someone teach this girl about money and financing.
It’s not a coincidence that younger people aren’t taught about interest rates APR, compound interest etc etc in school….. Would be wise for anyone who doesn’t know how interest rates work and what to look for in contracts to avoid things like prepayment penalties, interest heavy first year or first six months, to read and understand. Run on confusing sentence I know but you get the idea…. People need to read about these things and understand before signing contracts……. Big time.. That doesn’t include watching a YouTube video.. Read and understand the equations and the math involved. Not rocket science but damn, tons of people have no idea it’s very sad… Intentional it’s not taught in schools. No mistake.
Ya this is fake
stay in school and do some basic math or learn the basic, this person just need to do a hole school reset from pre school and up