Sensible consumers pay off a relatively inexpensive car loan for their first car, then drive that car until they've saved monthly payments ahead of time so the next vehicle is paid for cash.
“This is news? Auto loans are “underwater” as soon as that vehicle leaves the dealer’s parking lot. Always have been.”
Depends on money down and trade-in value.
Would work except for maintenance costs, they are killer. Most used cars are trash because they are treated like crap. I will say this my 2001 camry has stopped depreciating and is worth about the same as last year. Hasn't need much in repairs either. Pretty good car. A quality car eventually stops depreciation.
” This is news? Auto loans are “underwater” as soon as that vehicle leaves the dealer’s parking lot. Always have been.”
Add to that, 5-6 year payment schedules we never had until the past decade. And bad credit auto loans have been around for 50 years!
I had to continue payments while I drove loaners for over a year to pay off a car I didn't own anymore and back then, no dealership would touch me for another car
I have since bought nothing but (until about 5 years ago) 300 dollar miracles.
Used cars are no longer sold by folks that just want to get rid of it for more than scrap
Yup.
Funny reading this. No one in the car sales biz calls it “underwater”, it’s upside down.
And virtually ALL cars bought with credit are upside down unless they last more than the loan term.
Trade in values are a fraud because they are fictions of the over allowance on the new vehicle sales price.
But don’t tell the reporters. Their little fairy tale world might go pop....
I bought my last car in 2011, I paid cash. That's when I first learned from my dealer that most new car loans he dealt with were "under water" and banks and finance companies required loan recipients to purchase special insurance to cover the full debt. I had never heard of such a thing.
He also told me that it was not uncommon for people to owe double what the car was worth.