Posted on 12/18/2023 10:14:13 AM PST by george76
Isn’t this the case beginning with the first month of buying a car (on loan)? The car depreciates drastically as soon as it’s bought, making the car loan “underwater”.
>>Sandra Rivas, who is 38 and works for a bank in San Antonio,.. is $5,000 underwater on a 2018 Toyota Camry Hybrid and is tired of making $648 monthly payments on a loan with a 14% interest rate.
>>“It’s a little ridiculous when you sit back and look at the numbers,” she said. “It’s like how much am I paying you? And how has my loan amount not gone down?”
You’d think that someone who works for a bank would understand how interest works.
Yep. It happens immediately. It’s why I only buy used cars. Cars are a depreciating asset.
Car prices rise: It’s bad news.
Car prices fall: It’s bad news.
The hankering for misery on the part of the press is a bigger part of the misery than many will admit.
So? What does being “underwater” on a car loan even matter? Pay it off, drive it ten years after you pay it off.
It only happens immediately if you have a small’ish downpayment - but it is true that the second you drive it off the lot it probably loses 20% in value -
I drive a 11 year old toyota tundra, which I bought new - hoping to get another 10 years out of it if I can. NO desire to ever buy another new car or truck.
This is why I drive a 16 year old Subaru with 240,000 miles on it.
New car prices are a ripoff. And “high mileage” cars are not what they used to be. You can get a reliable, high mileage car as long as there are records of maintenance over the life of it.
648 a month! Wow! My mortgage payment is less than that. I looks like Sandra needed some help when she was negotiating and buying her car.
I haven’t had a car payment since 1986.
It matters when a deer jumps out in front of your car, and the result is a "total loss". Your insurance company will pay "actual cash value" to cover your loss ... if that doesn't cover the remaining balance on your loan, you're responsible for the difference. Maybe you got some sort of insurance on the loan ... maybe you didn't. Be fully informed, choose wisely.
Give serious consideration to paying cash, if it is possible for you to do so.
She shouldn’t have bought the hybrid. Nobody wants to buy a used car and turn around to spend thousands on a new battery.
Yes. It has always been that way. A new car is always worth less than the loan amount. Anyone who has ever bought a car knows this. This just the usual media fear spin tactic.
Roger that. We owe nothing on our 18 year old vehicles.
And if there’s no misery they just make it up.
Oh I get you on that. But that could happen a week after you bought it. Paying cash is best, and making sure how your insurance will cover you is close second.
But I’m shaking my head at idiots who act like they expected to build equity in a car as though it was land or a house.
The last car I bought was a 2005 Nissan Altima. I paid cash for it at the time because I had the money back then. I kept that car for almost 15 years, then traded it in to lease a 2019 Nissan Sentra. Three years later, I turned that car in to lease a 2022 Nissan Altima. I’ve had the maintenance package, and damage coverage with both. At 76, I’ll never buy another car. If I die during the lease, all my kids will have to do is take the car back to the dealer. End of story.
And at 14%! Maybe her credit was mediocre or poor.
I have seen one fellow get a car loan at 25% because he had a very poor credit history and a credit score of about 530. After about six months of on time payments I helped him refinance to about a 14% rate.
In 2020 we paid cash for our CX30.
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