by "LJ909" (lj909)
Published 10/09/2017 at 21:00
by "LJ909" (lj909)
Published 10/09/2017 at 21:00
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STARS: 0
Pulled from the shit I see on a daily basis with peoples credit, here’s another example from the folder of bad car financial decisions. Take this customer for example: 64 year old man. Credit score is 682. Pays $450 on a Fiesta sedan. For 74 months. And its Cosigned. To make it even shitter, the loan amount was originally for $17,300. Its currently sitting at $17,900. And that’s with 13 payments since it was opened last June. Think about all that.
"not for canada - australian in disguise" (for-canada)
10/09/2017 at 21:02, STARS: 1
Uhoh.
"E90M3" (e90m3)
10/09/2017 at 21:04, STARS: 2
The total amount of money he’ll pay about equals the loan I got for my M3.
"LJ909" (lj909)
10/09/2017 at 21:05, STARS: 2
Whats even worse about all this is that this man makes good money and could probably afford a used M3. He makes close to 6 grand a month. Hes just not good with his money.
"WilliamsSW" (williamssw)
10/09/2017 at 21:08, STARS: 2
Ok that’s all horrible shit and should be banned.
But how in the hell do you get negative amortization in a car loan? How does it get paid off?
"themanwithsauce - has as many vehicles as job titles" (themanwithsauce)
10/09/2017 at 21:12, STARS: 3
HOW THE HELL?!?!?!?!
I pay 280/mo, over 60 mos for a FOCUS ST O_O
My credit score is low-mid 700s.
How the hell do people not shop around o_O?!?!?
"ranwhenparked" (ranwhenparked)
10/09/2017 at 21:12, STARS: 1
Wow, his whole principle was more than I borrowed on my 2016 Challenger. He must have done like 100% financing with no trade, which is an all around terrible idea.
"OPPOsaurus WRX" (opposaurus)
10/09/2017 at 21:12, STARS: 1
how is that possible? isn;t 682 fairly decent?
"Chariotoflove" (chariotoflove)
10/09/2017 at 21:12, STARS: 6
This is what concerns me. Young people are supposed to be impetuous and rash. They are supposed to make questionable decisions but get older and wiser. We are entering a time when that wisdom doesn’t come because people were never taught the lessons when they were young. People are growing up thinking payday loans, credit card balances, and 74 month car loans are no big deal.
"LJ909" (lj909)
10/09/2017 at 21:13, STARS: 1
Thats what I want to try and find out. Not only that, but with how thick his glasses were, he should have read the fine print and contract thoroughly.
"LJ909" (lj909)
10/09/2017 at 21:14, STARS: 1
I dont know if its either out of financial illiteracy, a willingness to cave at the first car they look at or both, but this is bad. You have a great deal btw.
"LJ909" (lj909)
10/09/2017 at 21:15, STARS: 0
It could have something to do with him having a previous unpaid balance charge off on another car too.
"themanwithsauce - has as many vehicles as job titles" (themanwithsauce)
10/09/2017 at 21:16, STARS: 2
Two guesses here
1) This was one of those “we make your first 1/2/3 payments” deals. They basically just defer the beginning of payments until 3 months down the line or whatever. But you still rack up interest. I got a “1 month reprieve” on my car loan because I signed near the end of the month but I still made the payment so wipe out any interest and begin taking out of the principal. Even in low % loans, it can add up fast.
2) There are “balloon” payments at play here or some form of gaming the system where the minimum amount owed doesn’t cover the debt. So yeah, you only owe 200$/mo for two years but you still accrue interest and your 200$ doesn’t even pay for that much so after two years there’s a rate jump and now you owe 400/mo to actually begin paying off the principal.
"HFV has no HFV. But somehow has 2 motorcycles" (hondasfordsvolvo)
10/09/2017 at 21:16, STARS: 3
People are sooo dumb. The worst I’ve seen was a guy who had to trade in his AWD 2011 Taurus, because he took a new job the necessitated getting a pickip truck. Now that doesn’t sound bad at all. Except he had taken a high interest 72 month loan out on the Taurus, which he had bought used,so he was about 3 grand upside down on it. On top of that he hadn’t maintained or apparently cleaned it the entire 2 years he owned it. So the trade in value was even less than normal.
Anyway we got him approved on a 2008 F-150 STX, extended cab, short box, with like 135,000 miles. Once again for 72 months. The interest rate... 17.9%. And the loan amount was almost 2 grand more than our asking price on the truck. I hope for his sake that his new job paid well, and he paid off that truck ASAP.
"LJ909" (lj909)
10/09/2017 at 21:17, STARS: 3
Its sad but true. And they’ve been made to think those things because the industries have made those things the new normal. We in no way should have 84 month car loans, 450% $300 pay day loans etc. Its not only financially wrong its morally wrong in many ways.
"HFV has no HFV. But somehow has 2 motorcycles" (hondasfordsvolvo)
10/09/2017 at 21:18, STARS: 1
He probably could also pay off that loan in 6 months.
"themanwithsauce - has as many vehicles as job titles" (themanwithsauce)
10/09/2017 at 21:19, STARS: 0
I posted about my good deal a lot cause it’s a pretty easy one to get. In fact, Ford focuses have had so any deals nowadays a lot of people I know who were in bad car loans got out of them by buying a focus and getting a new loan after improving their credit score. This customer could probably pull a stunt like I did and end up saving money by buying a new car....Granted, I traded a Fiesta ST that was well out of warranty but I was still 4000$ in the black on trade in.
"LJ909" (lj909)
10/09/2017 at 21:19, STARS: 1
Damn that is crazy. Especially with him getting in what is pretty much an older worse vehicle.
"E90M3" (e90m3)
10/09/2017 at 21:19, STARS: 1
Young people are supposed to be impetuous and rash.
So you mean to tell me buying a 128i on an impulse was impetuous and rash?
"LJ909" (lj909)
10/09/2017 at 21:20, STARS: 0
Yea alot of people dont realize they could be driving around in an ST for the price of a Fusion or less than other comparable models. They really are great deals. Now only if those deals trickled down to the RS..
"ranwhenparked" (ranwhenparked)
10/09/2017 at 21:22, STARS: 2
Also a terrible idea.
"Bytemite" (bytemite)
10/09/2017 at 21:25, STARS: 0
Yeah but isn’t the FiST the funner car? Especially if you’re a single dude without kids to haul around, I don’t see why anyone would want the extra weight and rear room.
"wafflesnfalafel" (wafflesnfalafel1)
10/09/2017 at 21:26, STARS: 0
math is hard...
"HFV has no HFV. But somehow has 2 motorcycles" (hondasfordsvolvo)
10/09/2017 at 21:28, STARS: 2
Yup, buying a then 5 year old vehicle, with 135,000 and then paying monthly for it for 7 years is a baaad idea. Especially if it has a 5.4 triton.
"LJ909" (lj909)
10/09/2017 at 21:28, STARS: 1
True. Reading isnt though.
"themanwithsauce - has as many vehicles as job titles" (themanwithsauce)
10/09/2017 at 21:28, STARS: 2
Mmhmm. Although I wonder how this will affect resale/trade values down the line. But I guess since it’s the last model year (or second to last) before the Mk4 focus comes along it won’t be too bad and late adopters of either the base or ST focus get away a good deal.
As for the RS, I’d wait until the middle of winter. You’ll get a couple grand off of any left by around March, I’d say. So many have sat for so long that the ones near me all have corrosion on the rotors from a total lack of driving.
.....Back on topic - this is the sort of info I try to share with my friends. Yeah they don’t care about 0-60 times or the feel of the shifter or the weight balance of the car, but they all seem to understand that any new car is expensive and getting a good deal is important. I obviosuly don’t obsessively check for deals and specials all the time but I do try and share the good ones I do see. And for any other Oppos reading this, even a simple facebook post or a twitter share can help stem the tide of really shitty car loans that are hurting us all -_-
"Jordan and the Slowrunner, Boomer Intensifies" (jordanwphillips)
10/09/2017 at 21:29, STARS: 0
I pay less a month for a shorter term on my ST with a low down payment...How is that even possible? Related question: If by chance you work at a Ford dealer, how do I go about cancelling my extended warranty?
"The Crazy Kanuck; RIP Oppositelock" (jukesjukesjukes)
10/09/2017 at 21:33, STARS: 1
& I though doing a 60 month @ 4.99% (w/ minimal credit history) with payments of $313.83 was bad. I also carried over a small amount from my previous loan. The window price was $13,500. After everything the total amount was $18,829.80. So far $4,393.62 is paid, so I’m doing as bad as I thought I was.
"themanwithsauce - has as many vehicles as job titles" (themanwithsauce)
10/09/2017 at 21:34, STARS: 1
I traded in a FiST for the FoST. My one sentence explanation is this - The FoST is a much more enjoyable car to drive slow, but is always willing to play for a bit, while the FiST always feels like it wants you to drive it at 7/10ths so you’re still effortlessly in control but are still screeching tires and being a bit of a hooligan.
Both are damn good. My FiST developed a laundry list of issues after the warranty was out though and some were caused by bad repairs so I got a bit soured on it. Plus, the FoST refresh in 2015 improved it a lot. The FiST really needs/needed one. My 2014 had some definite rough edges but the 2017/2018 models are effectively identical to mine besides adding newer versions of Sync. Still good, but still flawed.
Either way, I think many oppos will enjoy them both for that great combination of affordability, practicality, and bucketloads of fun whenever you want.
"Chariotoflove" (chariotoflove)
10/09/2017 at 21:39, STARS: 0
Yeah, but don’t worry. It would’ve been a bad decision even if you’d thought about it for a while.
"themanwithsauce - has as many vehicles as job titles" (themanwithsauce)
10/09/2017 at 21:39, STARS: 0
It’s not awful, but it’s not always going to get you the “preferred” rates. But you’re often still going to get a lower, single digit % loan for an average car like this.
"Chariotoflove" (chariotoflove)
10/09/2017 at 21:40, STARS: 4
We learned nothing from the subprime mortgage crisis.
"E90M3" (e90m3)
10/09/2017 at 21:41, STARS: 0
Well, it wasn’t the worst decision I’ve ever made. Actually it wasn’t the worst decision I made that year.
Also, I really like the 1 series, the only reason I don’t have one right now is I couldn’t find a manual one.
"WilliamsSW" (williamssw)
10/09/2017 at 21:50, STARS: 1
Themanwithsauces first idea is the only thing that makes sense to me.
And even that is dumb on the buyers part because he shouldn’t be deferring high interest payments but whatever
"WilliamsSW" (williamssw)
10/09/2017 at 21:52, STARS: 0
The first one makes sense to me - lenders love deferring payments on high interest loans, sadly.
The second one, I get conceptually but 450/mo x 74 months equals $33,300 on a $17k loan. I sure hope there’s no balloon on top of that !!!
"themanwithsauce - has as many vehicles as job titles" (themanwithsauce)
10/09/2017 at 21:53, STARS: 1
It might’ve been an average payment? Or the payment at the moment? Idk. Just throwing stuff out there. I just know that they exist and they are incredibly dumb and predatory.
"WilliamsSW" (williamssw)
10/09/2017 at 22:00, STARS: 0
True. And predatory is exactly right.
"WilliamsSW" (williamssw)
10/09/2017 at 22:01, STARS: 1
Comprehension can be challenging though—
"Chariotoflove" (chariotoflove)
10/09/2017 at 22:03, STARS: 2
I know, I was just ribbing you. Your worst car decision was clearly not buying that green 3 series convertible the other day.
"E90M3" (e90m3)
10/09/2017 at 22:06, STARS: 1
Sadly, said car was not for sale in March, otherwise I’d bought it.
"WilliamsSW" (williamssw)
10/09/2017 at 22:09, STARS: 4
This shit is contributing to wealth inequality in this country. If you don’t get the education to avoid pitfalls like this, it’s nearly impossible to build wealth. Meanwhile the people doing this are basically stealing from the poor.
I suppose thar puts you and I and the rest of Oppo ahead of the average Joe, but that’s not what I want - I’d like to see people all over avoid this trap.
"Chariotoflove" (chariotoflove)
10/09/2017 at 22:13, STARS: 1
I was thinking the same thing. That’s the time I was looking for a luxury vert in green. If that were available, I might well have bought it, even though I’m not usually one for BMW.
"Chariotoflove" (chariotoflove)
10/09/2017 at 22:18, STARS: 1
People can be good individually but bastards in the aggregate. Business will always take advantage of opportunity, even at the expense of others. Education is the only true equalizer of opportunity. But the people who have the least education are often those who least recognize the need for it or are least able to pursue it even if they do. Education is the most critical issue of our time and the biggest determinant of our future as a society.
"WilliamsSW" (williamssw)
10/09/2017 at 22:31, STARS: 1
Very true. Education is the root cause. Too many people in this country have no chance at a good education because their school systems suck. We need to fix that
"Chariotoflove" (chariotoflove)
10/09/2017 at 22:38, STARS: 1
It’s the hardest problem facing us by far, and doesn’t get near the attention it needs.
"Chan - Mid-engine with cabin fever" (superchan7)
10/09/2017 at 22:46, STARS: 2
"WilliamsSW" (williamssw)
10/09/2017 at 23:09, STARS: 1
Because everyone wants quick and easy answers, not long term solutions that take work - and money.
Sound bites, not in depth discussion.
"Chariotoflove" (chariotoflove)
10/09/2017 at 23:26, STARS: 1
Okay, here’s the thing where I live. Our city school system as a whole pretty much sucks. We keep hiring new superintendents that are supposed to be the Lee Iococa of public school, and they fall flat and get blamed.
Actually, there are bright spots. Those are in areas where people have enough income and interest to make their school systems better. See, the secret to good primary education is in the families. It doesn’t take a huge amount of money to do the actual schooling. If it did, the Catholic schools wouldn’t be so uniformly good. It takes commitment, especially from the parents. But we have too many areas where families are poor. The parents are often struggling to feed and clothe their kids and don’t have time left over to make sure they do their homework or even have a stable home environment. I met a grade school teacher in the cereal aisle buying NutriGrain bars so her students would have breakfast in the morning.
Then there is the culture that doesn’t always value education. Many of our kids are from immigrant families that came north for opportunity. To some of them, opportunity includes education, but for others who have only known a blue-collar existence all their lives, opportunity means getting a better paying manual labor job that contributes to the family income. College prep is not on their radar. It’s tough to get buy-in from folks like that.
So, we need to get stable homes for kids and families that value their education and are able to put energy into that goal.
"LJ909" (lj909)
10/09/2017 at 23:39, STARS: 0
Focus’ seem to have really shitty depreciation. Its good if you’re buying an ST, but bad if you’re buying say a Titanium trim or the EV. You can easily find 1-2 year old CPO ST’s under 20 grand with low miles. Its probably one of the best performance deals out there right now. I don’t ever see RS’ coming down under 30 grand though unless you wait a few years. Many are sitting like you mentioned. I’ve seen some that have been on lots 170+ days.
But that’s why I post stuff like this so people can learn from it and see what deep shit you can get yourself into if you arent smart. With the kind of work that I do I’d rather not add to the problem.
"LJ909" (lj909)
10/09/2017 at 23:45, STARS: 1
From what I saw, high APR combined with an unpaid balance charge off that he still owed about 4 grand on. And they still approved him.
I dont work at a Ford dealer. I used to be a salesman though and from what I remember, Its just a simple matter of you going into the service department and doing it there. Tell them the reason why you are cancelling, they do the paperwork and thats that. They might try to bullshit you though and I believe that by law they are required to give you a full refund. If you financed the car though the refund will be reflected on your loan. Take what I said though with a grain of salt because some stuff could be wrong but Im pretty sure I got the gist of what I remembered.
"LJ909" (lj909)
10/09/2017 at 23:50, STARS: 0
Compared to what I’ve seen that is not bad. Some people would be lucky to get 10% and you got 5 at 60 for under 400 a month. You’re good.
"WilliamsSW" (williamssw)
10/10/2017 at 00:20, STARS: 1
A lot of truth there - but getting too late for me to respond in full - more tomorrow -
"Chariotoflove" (chariotoflove)
10/10/2017 at 00:22, STARS: 0
Good, because I’m going to bed now. Brain in power save mode.
"gmporschenut also a fan of hondas" (gmporschenut)
10/10/2017 at 00:22, STARS: 0
stupidity and credit knowes no bounds. My cousin used to work for a dealer chain and I have a hunch/fear that the percent of subprime loans out there is greater than the auto/loan industry would like to admit.
"LJ909" (lj909)
10/10/2017 at 00:31, STARS: 0
Ive been feeling like this for the past few years. Automakers have been posting record sales nearly every year for the past few years. I dont like to judge but the amount of new cars I’ve seen on a daily basis combined with whos behind the wheel doesnt add up. Like when I see some 22 year old behind of the wheel of a brand new Mustang GT. They have no problem pushing 84 month loans.
"Manwich - now Keto-Friendly" (manwich)
10/10/2017 at 01:05, STARS: 2
My last car payment was $2000/month... but with 0% interest....
...over 1 month.
"duurtlang" (duurtlang)
10/10/2017 at 05:42, STARS: 0
If you don’t get the education to avoid pitfalls like this, it’s nearly impossible to build wealth.
I agree with education being very important, but come on. $450 a month for 74 months: 450*74= $33,300. The loan was for $17,300. You don’t need a great education to be able to calculate this and you also don’t need that much of an education to understand that it’s a bad deal.
"Jordan and the Slowrunner, Boomer Intensifies" (jordanwphillips)
10/10/2017 at 06:50, STARS: 0
I’m still not out of factory warranty, so I don’t think it should be difficult. Thanks
"JQJ213- Now With An Extra Cylinder!" (jqj213)
10/10/2017 at 07:19, STARS: 1
This is gonna sound bad, but I know a few old guys down in my area that do stuff like this. One guy really liked having a new car. So much so he got into a new optima lx for something like $550 a month. He drives it for two years then gets a new, more expensive car. He said he’s old and just doesn’t care anymore. When he dies the bank will take the car and that’ll be that.
"WilliamsSW" (williamssw)
10/10/2017 at 09:43, STARS: 1
I know the conversation with Chariot morphed into a discussion on overall education, but we’re not talking about basic multiplication here. Many people (at least in the US) lack a basic understanding of personal finance, interest rates, amortization etc etc. While many of the underlying concepts are taught, there isn’t much that pulls it all together and applies it.
People don’t sign up for loans like that just because they have bad credit, or want instant gratification (although those things ARE factors for sure). They do it because they don’t ask enough questions, don’t read what they sign (partly because they’re afraid to look dumb), and don’t shop around.
I have a degree in engineering and I work in finance, so this stuff is like breathing to me, but I was never actually taught it until my 3rd year of college.
As an aside, just comparing the sum of payments to the original loan amount isn’t enough to call it a bad deal for a non-finance person. My first mortgage was for ~$170k at 8.25% - the sum of payments was north of $450k. At the time (1997), that was actually considered a *good* interest rate. Times have changed, and the term length and interest rate matter.
"WilliamsSW" (williamssw)
10/10/2017 at 10:21, STARS: 1
Your city school system sounds a lot like Chicago’s - we keep hiring ‘superstars’ who fail, too. Heck, it’s probably some of the same people.
The thing is, the Chicago Public School system has some of the best high schools in the country - AND some of the worst. In the same public school system! Get your child into one of the magnet high schools, and they’re in great shape. Live in a poorer neighborhood, and they can’t get into Whitney Young, CVS, Lane Tech, etc, and they’re screwed.
There’s certainly a correlation between spend per pupil and educational success - - but correlation doesn’t equal causation, I agree. The reality is that a lot of school funding (and where the spend differentials originate) is rooted in property taxes. So, the same families that take an interest in their kids’ education are the same ones who are willing (and able) to go along with funding increases.
The parents are often struggling to feed and clothe their kids and don’t have time left over to make sure they do their homework or even have a stable home environment. I met a grade school teacher in the cereal aisle buying NutriGrain bars so her students would have breakfast in the morning.
All too true, for too many families - but somehow that dynamic needs to change. Kids are the future - they’re long term investments. And things will be OK for now if you don’t spend that time, but in the long term, they will lose. That’s not an easy thing to change, however.
And yeah, I’ve met some of those same teachers. I think it’s terrible that teachers have to spend out of their own pockets for supplies, etc., yet that’s common, and it’s also common for teachers to go above and beyond, like buying breakfast for their kids. When I spend money on work-related items (travel, etc), my company reimburses me - and I make a lot more money for much LESS important work than a teacher does. WTF is up with that??
Then there is the culture that doesn’t always value education. Many of our kids are from immigrant families that came north for opportunity. To some of them, opportunity includes education, but for others who have only known a blue-collar existence all their lives, opportunity means getting a better paying manual labor job that contributes to the family income. College prep is not on their radar. It’s tough to get buy-in from folks like that.
This can be challenging to even discuss, let alone solve, but I’ve seen it, so I agree with it, and I think the answer lies in getting those families involved - but I don’t really know how, on a macro level. I’ve done some work with high school students (via College Summit, a GREAT organization BTW), and listened to many of their stories. College Summit essentially focuses on kids that have some obstacles to getting into (and through) college, and finding ways to overcome them. Not the cream of the crop students, but that next level down. Kids who have a shot at getting into college, but have things holding them back. In many cases, it’s family - some families don’t support women’s education, some don’t support men’s education beyond high school, and some just don’t value education much period. On top of that, you have schools that don’t offer much - as you know, to go into engineering, medicine, and other sciences, colleges want 4 years of math and science. I was working with kids whose high schools (Westinghouse and Bogan to name two) DID NOT OFFER THAT. At all. That’s unacceptable. There’s more, but I could rant all day on that.
So, we need to get stable homes for kids and families that value their education and are able to put energy into that goal.
Anyways, there are groups out there working on exactly that, on a micro level. They need and deserve our support - and I tend to think that, if those groups get enough help, that they’re the answer to this.
"LJ909" (lj909)
10/10/2017 at 11:32, STARS: 0
No problem.
"LJ909" (lj909)
10/10/2017 at 11:33, STARS: 0
Wow he really doesnt care. Old people usually have good credit though and some dealers take advantage of them sadly. Milk them for all of their retirement/pension/SSI.
"Chariotoflove" (chariotoflove)
10/10/2017 at 23:21, STARS: 1
We’ve got the magnet schools, too. There are also the parochial schools, including Catholic and Episcopal. What they all have in common is that they group together kids whose families are committed to education, by virtue of being willing to spend the extra money and time. We send our daughter to our parish school, which requires volunteer hours and involvement on top of tuition. The teachers, God bless them, do what they do for less than they could probably get in public school because they believe in their mission.
Our district public elementary school is starting to do the same because of grass roots commitment from the families. It’s getting a lot better. Problem is, the middle and high schools in their feeder pattern suck bad. Still, I think we can all make a difference, one kid at a time. We start with our own kids. Then, we network with the parents of their friends. Maybe serve on the PTO. Some people may even run for school board. But it all starts at home. I still believe it can be done.
"Chariotoflove" (chariotoflove)
10/10/2017 at 23:26, STARS: 0
This kind of problem isn’t because of a lack of the three Rs. It’s education of another kind. Judgement. Common sense is supposed to be common, but it isn’t automatic. It’s learned from parents and role models. The problem we are having today is that people are not learning good judgement, even when they get their formal education. The problem in this case was applied math, choosing to see only the monthly payment.
"WilliamsSW" (williamssw)
10/11/2017 at 22:30, STARS: 0
I like the idea of schools working to get parents involved more - it’s important. As long as there are reasonable way to get single parents in the mix without messing their schedules up too bad.
Looking forward to doing that myself in a few years!
"Chariotoflove" (chariotoflove)
10/11/2017 at 22:52, STARS: 1
Looking forward to doing that myself in a few years!
Not to being a single parent, I hope! :p
"WilliamsSW" (williamssw)
10/11/2017 at 23:02, STARS: 1
Oh, HELL no!! It’s more than enough work with two of us!!
But yeah, we’re starting to look at ‘schools’ for next year, which involve meet and greets, and they require some parent involvement, as well — it’ll keep us hopping!