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Posted on 06/02/2016 12:05:27 PM PDT by detective
Jamie Dimon is sounding the alarm on auto loans.
"Auto is clearly a little stretched, in my opinion," the JPMorgan Chase (JPM) CEO said Thursday morning, speaking at the Alliance Bernstein Strategic Decisions Conference in New York. "Someone is going to get hurt... we don't do much of that."
But other lenders have.
The average size of new auto loans is rising, as is the average payment size, according to research from Experian released Thursday morning.
In May, the total amount of auto loans cracked the $1 trillion mark for the first time, marking a 10 percent increase. It comes as auto sales have hovered around record highs.
(Excerpt) Read more at msn.com ...
At least a repo vehicle is worth something. You can’t say the same about student loans and their mongolian basket weaving degree.
A car depreciates each per year, on average. If a car loan term is longer than 48 months, the value of the car is less than the loan balance for the first three years.
If something happens to the car in that time, you will be underwater. The insurance pays the wholesale value, and you have to come up with the rest.
That’s completely separate from the finance charge. Unless you have perfect credit and can get a very low rate, a 5 or 6-year loan is very expensive.
If you have to finance it, buy something you can pay off in 48, or preferably 36 months. Then keep saving that car payment until you can pay cash for your next car.
I somehow dropped the number: a car depreciates 20% each year, on average.
Many insurance companies offer "gap insurance". Some don't. For instance, GEICO doesn't and that caused me to switch to another carrier when I got a new car loan. Got the loan from my credit union @ 1.99%.
“You can’t get out of student loans. “
Bernie and Hillary are both running on getting out of student loans.
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I save a car payment in a separate account every month......even though we haven’t had a car payment in almost 20 years. When we need a newer car I take advantage of the fact that someone bought a nice, new, luxury model and within a year figured out they couldn’t afford it and turned it in. They are less than 1 year old with very few miles on them. I then make a heckuva deal and pay cash for it out of my car payment account.
We have a Mercedes and a Jaguar we bought like that. The Jag is 10 years old now so have been looking around again. Just haven’t found anything I like better than it
Translation: We’re (JPMorgan Chase) going to need another bail-out.
I feel your pain.
I just bought a new truck...downsized, but still capable of 8,000 lbs, in order to tow a small tractor and trailer.
I hate to put so much down towards a truck, but I don't want to see nearly $650 a month going out the door, either.
I can put that money to work.
An interest-free loan, such as the one I got from Kubota for 72 months, is a different matter.
I expect the tractor to last 15 years, at least.
The truck, not so much...maybe a good 5, 7, if I'm real careful on maintenance.
I don't see how some folks are doing it.
Half of my son's salary goes toward transportation.
He has no kids, yet...but when he does, his vehicle tastes will downgrade significantly.
You go to a showroom and see cars at 40/50/60 thousand and that’s not counting tax and stuff.
Yes, that’s available to some. But, it’s an additional cost on top of the additional finance charge.
Sounds like you got a decent loan: credit unions offer the best deals. But, some don’t offer their lowest rates on longer term loans.
Yeah...and the same ilk who talked about free health care too. And you could keep your doctor.
The price of some new cars is just outrageous.
"Find one in every cah, yewl see.."
Cash for clunkers was to keep the UAW working.
Reduced the supply of used cars and drove people to new cars. Plus with all the channel stuffing, the net result was the unions kept on cranking out new cars. Also helped to keep the union money flowing to the dimrats.
You know there’s a bubble that’s going to burst when every time you go to your mailbox there are numerous solicitations for you to simply sign return the enclosed application for your pre-approved auto loan. I get these daily. And not from shady lenders you’ve never heard of. I’m talking about Chase, Citigroup, Bank of America, Wells Fargo. Daily. Ok...they’re shady too but we’ve all heard of them.
My wife and I paid that for our first house.
Even if you did, you wouldn't benefit. They bail out the loaner, not the borrower.
You need to adjust for inflation. Google "inflation calculator".
Dropping that tariff wouldn’t lower the price of pickups one dollar.
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