Posted on 02/26/2023 2:25:29 PM PST by RomanSoldier19
With a record 16% of American consumers paying at least $1,000 a month for their cars, it's no surprise that drivers are starting to fall behind on their bills.
The percentage of borrowers at least 60 days late on their car payments is higher today than it was during the peak of the Great Recession in 2009.
There are multiple factors driving this trend. Car financing costs are climbing as the Federal Reserve continues its aggressive campaign of interest rate hikes to combat persistent inflation.
At the same time, used car values are dropping, leaving debtors at risk of owing more money than their cars are actually worth.
(Excerpt) Read more at msn.com ...
Total monthly payments on my fleet..
0.00
No reason to finance a car.
My mortgage is under $1000 a month.
We had to sell our bigger home during the last recession when we moved to a new state. We started over again and bought a very modest home.
The kids all moved out so the house is a great size now.
One variation of that strategy is to save enough cash to buy a new car, but don’t pay cash for it. If the car costs $35,000 you put your money in a five-year CD and finance the car for five years. The bank will usually let you borrow the money for 2% more than they’re paying you on the CD.
After five years your car is paid off, you have $35,000 plus the interest on hand, and you’ve paid less than the rate of inflation on the loan.
That’s a bummer. I’ve noticed it’s getting harder to source parts for pre-2000 vehicles, so I feel your pain.
“No new parts in the system”
My 2005 needs a power steering pump. It’s getting a rebuilt pump from a shop about 100 miles away.
Yeah there’s some aftermarket options
Hooboy
What a battle
You'd think that, until the banks / lenders hold those vehicles and release them slowly to minimize their losses. Those holding the loans on these vehicles know if they just turn them over/sell them off, the used car market will go into a free-fall and then they'll really lose their asses on those vehicles.
It's going to be interesting to see what happens, that's for sure.
It sounds like good advice, but I disagree with him. I drive my vehicles into the ground. My last two vehicles have gotten a combined total of more than 730,000 miles on them. You can’t determine the true value of the asset just by looking at its initial cost. The value of a vehicle is in its use for transportation.
I would make the case that financing a depreciating asset is fine as long as the length of the loan doesn’t exceed the life of the asset. Businesses do this all the time. You don’t take out a seven-year loan for a car that won’t last you more than five years, for example.
If you know you're under-water on your car loan and it's going to be repossessed anyway, why take care of it?
Drive it like you stole it.
Pre-Obama, $1,000 was the monthly payment on a very, very nice house. Oh, how we long for the good ole days prior to 2008! Not all the way back to the interest rate of the Carter years, of course. However, even back then with high interest rates, our monthly house payment was less than $500. In the 1990’s, our new truck payment was less than $250. And, just 40 years ago, a raise to $6.00 an hour after three months on your first job meant you were “in the money”!
Inflation is created to make sure the middle-class never gets ahead of those that rule us. I’m now convinced of that.
Did you buy a Camry?
6 decades ago you could buy a custom ocean view home in very affluent area for what a basic car costs today.
It tells me everything I need to know about those overseeing our economy/finances.
6 decades ago you could buy a custom ocean view home in very affluent area for what a basic car costs today.
It tells me everything I need to know about those overseeing our economy/finances.
I am impressed.
OIL & OIL FILTERS are the cheapest part of owning a car.
I have towed 2 horse & 4 horse trailers since 1985-—all over.
When I park in a shopping center-—I park in 4 stalls—2 wide & 2 deep and walk to where I need to go.
ONLY drawback is kids “Who want to pet the horses”.
I had very good luck with a 1965 Pontiac wagon-—
Got OVER 444,000 miles on it in 32 years & sold to to a guy who restored the exterior-—IT RAN FINE.
I have an 04 Sonata and an 07 Sonata, both bought new, each about 110K on the odometer. They have been very reliable cars. My intention is to keep them as long as they run.
My daughter has an 06 Sonata she bought used in 2008, has 135k on it. She is not buying another car until absolutely necessary.
I also have a 17 Indian Scout 60 with 44k on it. Same thing.
“Too many people buy $60,000 pickups as well
Very few people need that”
________________________________________________
The pickup is the new sportscar, and the Chevy Suburbans
etc.. are the new “Family” cars.
Marko
“ The pickup is the new sportscar, and the Chevy Suburbans
etc.. are the new “Family” cars.”
Terrible financial choices
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