by "LJ909" (lj909)
Published 12/19/2017 at 13:43
by "LJ909" (lj909)
Published 12/19/2017 at 13:43
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STARS: 2
I just got the denial back for this customer however because her credit is crap. Not only does she have nearly 15 grand in collections (a little over 3 grand is medical), but shes young. Shes going to be 29 in a few days. Makes $5830 a month (but lives with her parents). Got financed back in May, with a cosigner mind you, though Chrysler Capitol, who will finance anyone, on a ‘17 Challenger SXT. Here’s where it gets bad:financed for $27,400 at $632 a month for 76 months, which I though was a weird number of months. That comes out to just over 48 grand, or literally money for any of the R/T models right up to the SRT 392. Here’s where it gets worse: in the 7 months shes had it shes made all on time payments, but the balance has increased to $28,100. Stupid.
"Party-vi" (party-vi)
12/19/2017 at 13:56, STARS: 3
19.6%? At what point is it her fault vs the salesperson’s fault for not telling her to get a used car, or something she can afford? If you’ve got money in collections maybe you shouldn’t be buying a new car. Of course here I sit with no late payments ever and really good credit but still.
"jimz" (jimz)
12/19/2017 at 13:57, STARS: 1
denial for what? is she trying to get out of the Challenger and take out a note on a new car?
"Arrivederci" (arrividerci)
12/19/2017 at 13:58, STARS: 1
That’s the problem with car sales - it’s not their job to put you in a car you can afford, it’s their job to sell you the most car you’re willing to buy, if they can push the paper through.
"Steve is equipped with Electronic Fool Injection" (itsalwayssteve)
12/19/2017 at 13:59, STARS: 2
$5830 A MONTH AND LIVES WITH HER PARENTS?
What the hell? Is this California? NYC? That’s over $70k a year - more than enough for a strong-middle-class living anywhere in the US.
Sorry - I can’t see the point of it.
"Nothing" (nothingatalluseful)
12/19/2017 at 14:00, STARS: 1
So she got a new car 7 months ago and is already back for another? Sounds like a winner, there. Are those 4 extra months perhaps covering a Mopar extended warranty? I know for the Jeep GC, that was an attempted sell to us, they just tack additional payments on the end of the loan that pay for the warranty.
"Party-vi" (party-vi)
12/19/2017 at 14:00, STARS: 2
I wonder how much of that 19% is going to the dealer.
"WilliamsSW" (williamssw)
12/19/2017 at 14:01, STARS: 6
Not if you’re buying FCA products at 19+% interest rates and have $15k in collections - in her case, living at home might be the only smart financial decision she’s made this year.
"LJ909" (lj909)
12/19/2017 at 14:02, STARS: 3
From having been in car sales myself, the blame can go all around: it goes on the customer for, like I always say, not bother to do the numbers or read the terms to know what they are getting into, and for salespeople for just being shitty sales people and putting their pockets before customers.
In a perfect world, a car sales person would act as sort of an automotive financial adviser by telling people helping people get into vehicles they can afford and telling them about the ones they cant. But again, that falls to the customer to know before hand.
"LJ909" (lj909)
12/19/2017 at 14:03, STARS: 0
Denied for a loan so she can get rid of her medical collections. We denied her for derogatory credit.
"Nibbles" (nibbles)
12/19/2017 at 14:03, STARS: 1
This person sounds eerily like my ex wife
And this person’s predicament is the reason she’s gone
"LJ909" (lj909)
12/19/2017 at 14:03, STARS: 0
It is California. But still, even with our housing problems you can find yourself a 1 bed room making this kind of money.
"LJ909" (lj909)
12/19/2017 at 14:04, STARS: 1
Nah shes actually applying for a personal loan so she can pay off her medical collections.
"LJ909" (lj909)
12/19/2017 at 14:05, STARS: 0
Divorce sucks, but I would advise anyone to cut loose their SO if they are bad with money. They will drag you down with them. And with California being a community property state, you get dragged down with them.
"Chariotoflove" (chariotoflove)
12/19/2017 at 14:06, STARS: 4
I blame generations of parents for not instilling fiscal responsibility into their kids. It’s to the point now where the knowledge is lost to many because the people having children are themselves usually conditioned to live on credit card debt with minimum monthly payments.
"Steve is equipped with Electronic Fool Injection" (itsalwayssteve)
12/19/2017 at 14:06, STARS: 6
You may be right. If there’s anything I’ve learned about money it’s that $15k isn’t a lot to have but it’s a hell of a lot to owe.
"LJ909" (lj909)
12/19/2017 at 14:07, STARS: 4
Parents and our school systems. There’s a lot financially we should be taught in high school but we aren’t. And financial illiteracy is bad, but its really bad for my fellow Millennials. I know some people that literally don’t know what things like apr and Bankruptcy mean.
"Arrivederci" (arrividerci)
12/19/2017 at 14:08, STARS: 1
A fair bit of it for sure, unless her credit was an absolute dumpster fire and that’s the bank’s risk appetite on the paper.
"WilliamsSW" (williamssw)
12/19/2017 at 14:08, STARS: 0
Truer words have not been spoken
"Arrivederci" (arrividerci)
12/19/2017 at 14:09, STARS: 1
Maybe that’s an opportunity in the market.
"LJ909" (lj909)
12/19/2017 at 14:11, STARS: 1
A good one. Bring honesty back into the car business. The downside is with cars, people like being told what they want to hear, and dislike being told they cant afford what brought them in on impulse.
"Chariotoflove" (chariotoflove)
12/19/2017 at 14:11, STARS: 1
I have noticed that. My eighth grade math class did some practical financial stuff, and I think there was some in high school, but really what I know I got from my parents’ example.
"LJ909" (lj909)
12/19/2017 at 14:13, STARS: 0
Same here. There was stuff here and there in high school and it was mostly glossed over. The only thing I remember going in depth with was in this sort of home ec like class. The teacher had us create fake bank accounts and she gave us fake money through fake jobs. The she assigned us expenses that we needed to pay. Pretty much she forced us to make and maintain a budget that included food, rent etc. I thought it was great but never experienced anything like it again sadly.
"Chariotoflove" (chariotoflove)
12/19/2017 at 14:16, STARS: 2
That’s kinda like what we did in 8th grade math. In Economics in HS, we had a semester long project where we learned about the stock market and had to create a portfolio of stocks and track them. I think the DOW was pushing toward a record 3,500 back then.
"Arrivederci" (arrividerci)
12/19/2017 at 14:20, STARS: 5
Yeah, I’d imagine that’d be a very rough business model.
Customer: “Yes, I’d like to buy the Mercedes!”
Salesperson: “Okay, we’re able to offer that vehicle at $55,301, which is $4,902 off the MSRP. Let’s go inside and review your financial standing.”
Salesperson: “With your credit score of 572 and monthly income of $2300, this Mercedes isn’t the best option for you financially. A better fit for you would be this 2005 Corolla that we’re offering for $3300. Our bank has a special program that can offer you a rate of 7.9%, to help you fix your credit.”
Customer: “...”
"Monkey B" (monkeyb)
12/19/2017 at 14:22, STARS: 3
finance should be required curriculum from 9th - 12th grade. Shit is complicated and needs to be understood. You shouldn’t have to go to college to learn basic life skills. Parents can’t be leaned on here, many don’t have the required financial skills themselves.
"SPAMBot - Horse Doctor" (spambot2002)
12/19/2017 at 14:24, STARS: 2
My guess is that she is living at home and partially/fully supporting her parent(s). I’ve personally seen a very similar situation in LA. Daughter is from poor family, goes to school for engineering, makes pretty good money after graduation, but lives at home for 4ish years while being broke because she is paying most the bills at home (not even in her name). She moved out and in with her fiance (now husband) and they are thankfully doing much better.
Does she have high student loan debts, too?
"Arrivederci" (arrividerci)
12/19/2017 at 14:27, STARS: 0
Agree 100%. I work for a bank and one of the community outreach programs we support is specifically this, which we provide to high schools in the area free of charge.
"WRXforScience" (WRXforScience)
12/19/2017 at 14:27, STARS: 2
As a high school physics teacher, I can’t expect my juniors and seniors to be able to figure out how to use proportions or fractions.
Only about 5-10% of my students could sit down and solve a problem that hasn’t been previously shown to them, simply problems that involve simple Algebra (single variable stuff that they were required to learn by law before making it to high school). 98% of our students go to college and 100% passed last year.
This is a stupidity tax: first they wanted to buy a new FCA product, strike 1. Next they financed the whole damned thing, strike 2. And lastly, they are paying more in interest than I would if I put it on my credit card.
This is why you have to take math in school. What is really disappointing is that this person is making nearly 50% more than I do (and they wouldn’t be able to figure out how much that is).
"LJ909" (lj909)
12/19/2017 at 14:33, STARS: 0
You know what you could be right. Speaking to her when I went over her app, she mentioned something about being the only one working in the house and made it seem like she was paying all the bills. But the flip side of that is that she said she pays no rent. So someone has to be working or giving the rent or mortgage payment unless the house is paid for. But she has no student loans on her credit.
"merged-5876237249235911857-hrw8uc" (merged-5876237249235911857-hrw8uc)
12/19/2017 at 14:35, STARS: 4
You should be able to find a used beater for a couple grand instead of a new car then. If she can afford to make the payments for a few months, she could’ve had a reliable older car and been in the clear on it. WTF is it with people that think they need new stuff?
"LJ909" (lj909)
12/19/2017 at 14:38, STARS: 0
The ironic thing about that is back in 2013, she bought and paid off a car that was $10,700 that she financed and paid $418 a month for for 36 months.
"Aaron M - MasoFiST" (amarks563)
12/19/2017 at 14:56, STARS: 0
Weird and specific question, but is 5830 pre-tax or after-tax? Pre-tax that’s 70k a year and after-tax it’s near 120. I could understand someone believing they could afford a car with those incomes, though clearly it sounds like she doesn’t understand the consequences of having a thrashed credit score.
"LJ909" (lj909)
12/19/2017 at 14:59, STARS: 0
That 5830 is gross, so before any deductions.
"SPAMBot - Horse Doctor" (spambot2002)
12/19/2017 at 15:01, STARS: 1
Very strange indeed then. I’m shocked about being in that situation and having no student loans. Maybe they were doing alright and got hit with the unemployed, medical emergency, and one other big unexpected expense trifecta. But, it seems like she had spotty credit going pretty far back so who the hell knows.
Keep these stories going though, it’s good to have a reminder that financial health is more important than the latest shiny toy. A good friend of mine makes over 100k but is in credit card debt and has absolutely no savings. He just buys what he wants, when he wants it. It absolutely blows my mind. Thankfully, he puts money in his 401k and has great credit so he’s not totally hopeless, I guess.
"LJ909" (lj909)
12/19/2017 at 15:07, STARS: 1
Yea shes currently out on medical leave till Febuary. She said she had got some kind of injury. But her credit has always been crap.
But yea I have way more than enough sources to pull from because I literally see this stuff on a daily basis. But it sounds like your friend just uses cash for everything. He should pay down some of that debt.
"Chariotoflove" (chariotoflove)
12/19/2017 at 15:25, STARS: 1
But as long as you can make the minimum payment, it’s all good.
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"WRXforScience" (WRXforScience)
12/19/2017 at 15:35, STARS: 2
I literally have that same conversation at the beginning of the year, half of my job is not calling my students morons. Sometimes there aren’t simpler ways of explaining something, so I just say it again but slower and louder.
"Chariotoflove" (chariotoflove)
12/19/2017 at 15:38, STARS: 0
I think one of my best skills as a teacher is finding multiple ways of saying the same thing as many times as needed.
"Aaron M - MasoFiST" (amarks563)
12/19/2017 at 15:39, STARS: 2
Gotcha, thanks. Yeah...I wouldn’t borrow nearly 30k for a car in that circumstance.
"Klaus Schmoll" (klausschmoll)
12/19/2017 at 16:05, STARS: 0
English (ESL) and history teacher here. I thought I had experienced all kinds of stupid until last week a colleague who was away for a seminar asked me to have my kids write a 6th grade physics test for him. Reflections on a mirror and shadows with two light sources. I couldn’t believe how stupid they were/acted. The frustration made me want to bite a piece out of a desk.
"nermal" (nermal)
12/19/2017 at 16:40, STARS: 1
The dealer is most likely not getting anything. Most auto lenders that will actually grant a loan at 19% won’t allow the dealers to mark it up further. The bank needs to collect as much interest $$$ as possible as soon as possible, due to the number of repos they have.
You can’t outrun math, even from the bank side.
"ranwhenparked" (ranwhenparked)
12/19/2017 at 23:21, STARS: 0
Under normal circumstances, a car like that should be perfectly affordable for her, but with that much other debt and shitty credit, absolutely not.
"ranwhenparked" (ranwhenparked)
12/19/2017 at 23:24, STARS: 1
You absolutely can. I interviewed for a job in Torrance a year and a half ago, and before I interview for anything that requires relocation, I always check the local real estate listings to see if I could even afford to take the job. Even at $60k, there were any number of decent apartments or small houses within commuting distance that I could have leased. Of course, my perception of commuting distance may be a bit different, I figure 40-50 minutes out is perfectly fine.
"merged-5876237249235911857-hrw8uc" (merged-5876237249235911857-hrw8uc)
12/20/2017 at 03:04, STARS: 1
That’s still a pretty bad interest rate back then too. Over 15k for a 10k vehicle is a bunch of interest especially over only 36 months. Ouch.
"Aaron M - MasoFiST" (amarks563)
12/20/2017 at 08:31, STARS: 0
Important detail: that loan is 102% the MSRP of the car (26,995). Either finance raked her over the coals or she was rolling in debt from a previously underwater vehicle. My worst auto loan, value-wise, was about 80% of the value of the car (and a used car, to boot, so being underwater was going to be nearly impossible).
If I were buying a Challenger SXT and had to finance, I’d aim to borrow 14-16k and would top out at 20k. If I didn’t have the cash to do that, I’d buy a cheaper car.
"ranwhenparked" (ranwhenparked)
12/20/2017 at 08:56, STARS: 0
Yeah, cash and trade covered about 50% of my SXT Plus, between that and the dealer discounts, I only financed about $15,000. Really not too bad, I should be able to retire it somewhat ahead of schedule.