Yikes! 97 month car loan!

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I just found the Finance thread over here and have been voraciously reading everything I can.
This is my first post in this forum. I have a lot to learn but I thought you all would enjoy a laugh this morning!

http://online.wsj.com/article/SB10001424127887323646604578403191...


If you google: Introducing the 97-Month Car Loan
Should take you to the article.

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And it gave a very valuable lesson to the auto industry... encouraging an unsustainable business model is fine because t... (more)

calvinandhobbes (Apr. 12, 2013 @ 1:12p) |

After decades of screwing the American Consumer by selling them junk for high profits.

clearanceman (Apr. 12, 2013 @ 3:00p) |

Roger that.

tolamapS (Apr. 12, 2013 @ 9:36p) |

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welcome to the darkside.

I'm not a subscrier, so I can't view the article.


There will always be new products for stupid people to ruin themselves financially.

If you put enough money down, and the rate is low enough, you won't kill yourself.

FWIW -- This is why 1) you never buy anything based on monthly payment, and 2) you never tell a car dealer how much you can afford (they will find a way to get you that payment).

She's paying 36k on a 23k car?

Why the hell is she driving a 23k car?

vnuts21 said:   She's paying 36k on a 23k car?

Why the hell is she driving a 23k car?


I am sure there is negative equity in the older car

"Last month Nakisha Bishop took out a loan to buy a $23,000 Toyota Camry and pay off several thousand dollars still owed on her old car. "

I just dont get the concept of living beyond their means! I can bet she cannot afford the car if she has to make 75 payments!

To be fair, if I can get Penfed's 1.49% for 97 months, that wouldn't be such a bad idea!

The cash for clunkers program destroyed a good 50% to 60% of recoverable cars that needed repairs. Quite possibly 1 of the most idiotic programs by the fed. It would have been better off spending the $ to refurb these cars and sell them to the lower income folks.

I remember looking at the list, someone clunked an Aston Martin.

http://www.autoblog.com/2009/09/24/shed-a-tear-for-clunkers-that...

Nakisha.........

I'd take that '56 for $56 deal any day!

Americans are woefully prepared for retirement and will have to work until they drop dead... but at least they can go into debt now to drive a shiny new car.

I cried a little after looking at the clunkers list

sjepps said:   I cried a little after looking at the clunkers list

I know what made you sad.

(855) Ford Crown Victoria CNG

(917) Ford Crown Victoria Police Interceptor

DaGimp said:   The cash for clunkers program destroyed a good 50% to 60% of recoverable cars that needed repairs. Quite possibly 1 of the most idiotic programs by the fed. It would have been better off spending the $ to refurb these cars and sell them to the lower income folks.

I remember looking at the list, someone clunked an Aston Martin.

http://www.autoblog.com/2009/09/24/shed-a-tear-for-clunkers-that...



Yeah, but the goal was to get inefficient polluting cars off the road! Except it didn't. There was nothing requiring the "clunker" to be innefficient to qualify, and there was nothing requiring the new cars to be more efficient. And, of course, it takes resources and energy to *build* a car, so they actually wasted tons of perfectly good "built car" energy.


Yeah, but the goal was to get inefficient polluting cars off the road! Except it didn't. There was nothing requiring the "clunker" to be innefficient to qualify

Yes there was


and there was nothing requiring the new cars to be more efficient.

And there sorta was

stanolshefski said:   Looks like you can view the article here: http://finance.yahoo.com/news/introducing-97-month-car-loan-0105...
I was intrigued by two statements in the article.
The average price of a new car is now $31,000, up $3,000 in the past four years.
And while the length of the loan may seem long, the average age of a vehicle on the road today is 11 years.

Are these averages skewed by a few large data points? I would have guess both these numbers to be significantly lower. Especially the average age.
Here I thought I was driving an "old car" but it is "just average" age.

I wish they offered 0% for 97 months !

From the article: "But long loans may keep some people from replacing their cars, cutting into future sales."

Nope. The dummy in the article rolled her debt on her old car into the loan for her new car.

Te American dream - having more brand new stuff than you can afford.

The price of new cars have gone up dramatically in the last few years. The larger 60-72 car notes are part of the blame.

Pretty soon we will see 30 year car/mortgage combo loans. want a new car, just refi and roll that negative equity in.

In developing countries that pay high import duties I've seen 10 year car loans as a common practice.

uutxs said:   stanolshefski said:   Looks like you can view the article here: http://finance.yahoo.com/news/introducing-97-month-car-loan-0105...
I was intrigued by two statements in the article.
The average price of a new car is now $31,000, up $3,000 in the past four years.
And while the length of the loan may seem long, the average age of a vehicle on the road today is 11 years.

Are these averages skewed by a few large data points? I would have guess both these numbers to be significantly lower. Especially the average age.
Here I thought I was driving an "old car" but it is "just average" age.


I've been tracking age of used cars closely for several years.

In 2011, the average car on the road was 10.6 years old, according to the Polk research firm. That's up from 9.8 years in the middle of 2007, a few months before the recession struck and people began to rethink major purchases.

in 2012, it rose to 10.8 years old.

96 mos auto loans are nothing new. I see them all the time

Squeezer99 said:   Nakisha......... Shut up! They totally hooked me up!

Nakisha could be my sister and that's what she would say....

brettdoyle said:   Americans are woefully prepared for retirement and will have to work until they drop dead... but at least they can go into debt now to drive a shiny new car.

Don't worry, government will bail everyone out as was pointed out by the recent "disability" & "welfare" threads.

Too bad no one in the article actually got the 97 month loan.

sometimes i wonder how many of those C4C cars were $500 salvage cars resurrected from the junk yard for one last drive to be cashed in for the credit.

kaveh2k said:   96 mos auto loans are nothing new. I see them all the time

You're either delusional, work in a very small niche of auto sales or lending, in another country, or completely full of it. I ran a report that gives me term trends from Experian for auto loans made in Texas in 2012. 85-96 month loans made up. 0983% of all loans. Terms that were 97+ months made up. 0371% of auto loans. (and my phone isn't displaying those numbers right, but if expressed as basis points that would be 10 bps and 4 bps respectively)

uutxs said:   stanolshefski said:   Looks like you can view the article here: http://finance.yahoo.com/news/introducing-97-month-car-loan-0105...
I was intrigued by two statements in the article.
The average price of a new car is now $31,000, up $3,000 in the past four years.
And while the length of the loan may seem long, the average age of a vehicle on the road today is 11 years.

Are these averages skewed by a few large data points? I would have guess both these numbers to be significantly lower. Especially the average age.
Here I thought I was driving an "old car" but it is "just average" age.


Yeah, I went "WTF" when I read the $31,000 line. How on Earth is the AVG. price of a new car $31k? Are people buying Toyoto Sonata's with all the bells and whistles? My mid-size Mitsubishi Lancer with some extras was $19k (with financing in that price.) If $31k is truly the average, then either our economy has really recovered or, what's probably happening, is people buying things they can't really afford, again.

<<Ms. Bishop, a 34-year-old sheriff's deputy in Palm Beach County, Fla...>>

She works for the county. She should been able to get a loan from a Credit Union instead of going through the dealer.

144 month loans for exotics are common

DaGimp said:   The cash for clunkers program destroyed a good 50% to 60% of recoverable cars that needed repairs. Quite possibly 1 of the most idiotic programs by the fed. It would have been better off spending the $ to refurb these cars and sell them to the lower income folks.

I remember looking at the list, someone clunked an Aston Martin.

http://www.autoblog.com/2009/09/24/shed-a-tear-for-clunkers-that...


Have been looking for used vehicles for a couple friends. You are dead on. The days of $1800 "good" clunkers are dead. Best one friend could find was 3500 for a Neon. A damn Neon!

In my area, older s-10s, sonomas and rangers are like Big Foot. You hear about them but never see them.

correct me if i'm wrong but i don't see the interest rate on her loan in the article.

If it is 0% then i believe it is good.

Didn't Toyota just had a 0% APR for 60 months or 36 months? Wouldn't that be a great deal?

tennis8363 said:   There will always be new products for stupid people to ruin themselves financially.

My neighbor's wife said. "I'm ok with one car being 8 years old as long as one of the cars is still under warranty." Other people say "You'll always have a car payment, so what difference does it make?" Buddy of mine had a Kia van and the AC went out so he got a new van.

I'm thinking WTF, I have a 95 accord and a 2000 legacy. The accord has 226,000 and has been paid off for almost 13 years (bought fall 94). The legacy has 242,000 and has been paid off for almost 9 years, bought fall 1999. These are daily drivers that even go on long trips a few times per year. The Subaru goes to the beach with a cargo tray, a roof top carrier and five people inside every year. I admit I work on my cars myself and maintain them well but I'm not a professional mechanic or anything. If you look at the Honda high miler club, I'd be at the lowest level bronze, I need 300,000 just to be at silver.

Almost always when someone says "I need a new car" they mean "I want a new car." Even then get one five + years old that has already taken the biggest depreciation hit.

jb3ker said:   correct me if i'm wrong but i don't see the interest rate on her loan in the article.

If it is 0% then i believe it is good.

Didn't Toyota just had a 0% APR for 60 months or 36 months? Wouldn't that be a great deal?


Yes and no. 0% is a great deal BUTT the car continues to depreciate out from under you. Toyota not as bad as some but a new car is never a good deal aside from some extremely rare collector cars.

saladdin said:   DaGimp said:   The cash for clunkers program destroyed a good 50% to 60% of recoverable cars that needed repairs. Quite possibly 1 of the most idiotic programs by the fed. It would have been better off spending the $ to refurb these cars and sell them to the lower income folks.

I remember looking at the list, someone clunked an Aston Martin.

http://www.autoblog.com/2009/09/24/shed-a-tear-for-clunkers-that...


Have been looking for used vehicles for a couple friends. You are dead on. The days of $1800 "good" clunkers are dead. Best one friend could find was 3500 for a Neon. A damn Neon!

In my area, older s-10s, sonomas and rangers are like Big Foot. You hear about them but never see them.


Neon is a pile of poop, get a used corolla or something.

thehelios said:   uutxs said:   stanolshefski said:   Looks like you can view the article here: http://finance.yahoo.com/news/introducing-97-month-car-loan-0105...
I was intrigued by two statements in the article.
The average price of a new car is now $31,000, up $3,000 in the past four years.
And while the length of the loan may seem long, the average age of a vehicle on the road today is 11 years.

Are these averages skewed by a few large data points? I would have guess both these numbers to be significantly lower. Especially the average age.
Here I thought I was driving an "old car" but it is "just average" age.


Yeah, I went "WTF" when I read the $31,000 line. How on Earth is the AVG. price of a new car $31k? Are people buying Toyoto Sonata's with all the bells and whistles? My mid-size Mitsubishi Lancer with some extras was $19k (with financing in that price.) If $31k is truly the average, then either our economy has really recovered or, what's probably happening, is people buying things they can't really afford, again.


Now look, you KNOW they HAVE to have the Nav system because a $60 Garmin just won't do. And they HAVE to have some form of high profit making entertainment system for the kid. My neighbor told me "we had to get leather seats, if you have kids you have to get leather."

If people are stretching loans just to get more car than they can afford, then that is bad.

But how long "should" a loan be?

saladdin said:   DaGimp said:   The cash for clunkers program destroyed a good 50% to 60% of recoverable cars that needed repairs. Quite possibly 1 of the most idiotic programs by the fed. It would have been better off spending the $ to refurb these cars and sell them to the lower income folks.

I remember looking at the list, someone clunked an Aston Martin.

http://www.autoblog.com/2009/09/24/shed-a-tear-for-clunkers-that...


Have been looking for used vehicles for a couple friends. You are dead on. The days of $1800 "good" clunkers are dead. Best one friend could find was 3500 for a Neon. A damn Neon!

In my area, older s-10s, sonomas and rangers are like Big Foot. You hear about them but never see them.


If you live in a low rust area, get a 90s Accord. Most of them last at least 400,000-500,000 miles. And they are cheap used.

Skipping 39 Messages...
lotusgardener said:   tolamapS said:   Nothing wrong with a 97 month car loan if it is at 0% rate.

I will take a 100 year home loan at 0% rate.

Heck, make it interest only.


Hello Japan?!


Roger that.



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