So I just probably seen the worst auto deal I have ever seen

"LJ909" (lj909) 07/05/2017 at 20:39 • Filed to: None

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And it epitomizes whats wrong with consumer auto lending right now with dealers pushing people onto either shitty cars, shitty deals, or shitty deals with shitty cars and people just signing and not knowing what they are getting into. I’m working on a customers loan. Before all of that i noticed she drove a late model Dodge Journey. But I’m processing her loan. I ran her credit and I see this: She financed $32,900 with Chrysler Capitol on a Journey for 81 months at $727 a month. How...just why? What is really wrong with people? On top of that the payments on it have been shitty since she got it resulting in a grand of interest to be added on.

So while the auto industry is singing the praises of record sales and crossovers dominating everything, let shit like this be the reminder that all of that is at a cost and we all might hurt from it.

Nibby > LJ909 07/05/2017 at 20:42

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$58,887

LJ909 > Nibby 07/05/2017 at 20:46

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Otherwise every crack pipe, meth pipe, Freon etc. All other drugs pipe.

Gone > LJ909 07/05/2017 at 20:47

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1a) Declare bankruptcy.

1b) Let Journey get repo’d.

or

1c) Both

2) $10k max used compact on a 5yr loan @ some godawful interest rate.

3) Try again because holy shit that last time didn’t work out so well.

Jake - Has Bad Luck So You Don't Have To > LJ909 07/05/2017 at 20:47

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How does that even happen? How does someone not look at the amount they end up paying and go “oh wow that’s almost twice sticker”?

AkursedX > LJ909 07/05/2017 at 20:47

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That is a 19.15% interest rate.....on an 81 month term......for a Dodge Journey.......

Holy hell.....

Jordan and the Slowrunner, Boomer Intensifies > LJ909 07/05/2017 at 20:48

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Things like this make me realize financing all but a very small amount on my Fiesta was not the worst thing someone has ever been done, especially at 0% for 60 months.

Dr. Zoidberg - RIP Oppo > Gone 07/05/2017 at 20:50

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4) Buy a 96 Camry for 2k cash and rebuild your life

Brian, The Life of > LJ909 07/05/2017 at 20:51

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I feel like I need a shower after reading that

wafflesnfalafel > LJ909 07/05/2017 at 20:51

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this is why education is important...

WilliamsSW > LJ909 07/05/2017 at 20:53

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That is criminal. I wish it were literally criminal.

Logansteno: Bought a VW? > LJ909 07/05/2017 at 20:53

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Anyone who’s financing a Journey for 81 months deserves the shitty rates they get. No one forces these people into top trim level cars they really can’t afford with loans that will last longer than the car will except themselves.

My term of my Silverado is 63 months and it’s only that long to keep the payments low while I’m at school, as soon as I’m finished with school I’m making double payments. I was asked straight up by my finance guy how long I wanted my loan to be. No one except me, myself, and I chose my term. No one except these people decide to fuck themselves financially either.

Gone > Dr. Zoidberg - RIP Oppo 07/05/2017 at 20:56

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That’s a better idea and was my first inclination. I went newer sub-50k mile car for the whole “I drive a lot and need something newer” angle just in case. I should have made 4a and 4b...

Highlander-Datsuns are Forever > LJ909 07/05/2017 at 20:59

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What is she getting in trade? $4500?

atfsgeoff > LJ909 07/05/2017 at 21:01

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Such is the result of the vicious cycle of buying new every few years and rolling the upside down loan from the previous car into the new one.

I just took out my first vehicle loan (actually an unsecured personal loan) a few months ago and I’m making sure to throw extra money at it to have it paid off in less than a year. If I’m successful, I’ll have only paid about $120 in interest.

Dr. Zoidberg - RIP Oppo > wafflesnfalafel 07/05/2017 at 21:01

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Education? How about common sense even!

dropthatclutch > Gone 07/05/2017 at 21:02

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In NYS they let you keep one house and one car so if you can declare bankruptcy before they repo it then you win.

cluelessk > LJ909 07/05/2017 at 21:03

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They probably had shit credit to begin with?

It’s amazing what some people with settle for so they can drive their shiny new car off the lot.

I’m still convinced the Journey might be the worst built new car available right now, They’re put together so poorly. The gaps are awful and so inconsistent.

LJ909 > Jake - Has Bad Luck So You Don't Have To 07/05/2017 at 21:10

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Because people don’t tend to look that far out. The excitement or necessity of a new car makes rational financial decision a moot point.

LJ909 > AkursedX 07/05/2017 at 21:10

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Still trying to wrap my head around the how and why.

jkm7680 > LJ909 07/05/2017 at 21:10

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I keep forgetting they still make those. They should really stop that. Because stupid people probably keep buying them for some reason. It’s just one of those cars that you can’t picture people buying in anything above base model trim.

LJ909 > WilliamsSW 07/05/2017 at 21:13

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It should be, federally.

LJ909 > Highlander-Datsuns are Forever 07/05/2017 at 21:13

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If that. And thats if it doesnt go out on her first.

LJ909 > atfsgeoff 07/05/2017 at 21:15

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People should do that, but a lot dont, or the ones that can wont. Blame automakers too for enticing us.

TheTurbochargedSquirrel > LJ909 07/05/2017 at 21:15

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How do you even get into a situation where you are paying that much for that long.

LJ909 > cluelessk 07/05/2017 at 21:16

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A lot of shitty payments, especially on this Journey. But it was Tier 2.

Ssfancyfresh > LJ909 07/05/2017 at 21:17

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Is it possible they rolled in payments on a lien on a previous trade in?

Highlander-Datsuns are Forever > LJ909 07/05/2017 at 21:18

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These are the same people who got a variable rate mortgage back in the 2000's, one bad decision after another.

LJ909 > jkm7680 07/05/2017 at 21:21

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To me its one of those cars that they push on people with shitty credit. People that came in on a Challenger R/T but they pushed them onto this. Nissan does it with people that want 370z’s. Its why Sentra’s, Altima’s and Versa’s sell.

HammerheadFistpunch > LJ909 07/05/2017 at 21:28

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$58887. Helluva Journey they set her on.

nermal > LJ909 07/05/2017 at 21:43

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According to my math that’s 19% interest, give or take. I’m assuming they missed a few payments as well by your terminology, which won’t help with the new loan.

Are they trading this car in? In that case that would be good for the bank that did the first loan, not so much for the one doing the new loan.

Eric @ opposite-lock.com > nermal 07/05/2017 at 21:59

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I wonder if you could even roll that much negative equity into a new car loan...

WilliamsSW > Jordan and the Slowrunner, Boomer Intensifies 07/05/2017 at 22:06

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At Zero percent, you should finance as much as possible, really. So that’s a smart decision.

nermal > Eric @ opposite-lock.com 07/05/2017 at 22:21

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Assuming it was a 2015 Limited V6 AWD model, the MSRP is $34k+ before options. Using that, a bank giving a loan for an amount below MSRP is not out of line.

The same model today with 30k miles is worth between $16k and $18k. If they paid on it for 2 yrs, they would owe about $27k. If they paid on it for 3 years, they’d owe $23k. A lower trim goes down to about $13k depending on condition.

So, they’re somewhere between $5k and $15k upside down on the loan. A person with good credit can get $5k in negative equity rolled into a new car loan relatively easily, especially on a domestic brand with a big rebate / discount off MSRP. A person with bad credit and $15k negative equity is pretty much hosed.

merged-5876237249235911857-hrw8uc > LJ909 07/05/2017 at 22:27

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58k in total payments? WTF people? What kind of interest rate would that be? 78%? I can’t be calculating that correctly.

functionoverfashion > LJ909 07/05/2017 at 22:45

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This same person would probably look at my E46 and say “ooh fancy car it must be expensive.”

TheTurbochargedSquirrel > nermal 07/05/2017 at 23:05

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I don’t think you have good credit if you are paying $727 per month for 81 months on a ~$30k car.

Vicente Esteve > Dr. Zoidberg - RIP Oppo 07/05/2017 at 23:20

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This is such a pro tip.

LJ909 > Ssfancyfresh 07/06/2017 at 00:04

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Could be but I doubt it.

LJ909 > HammerheadFistpunch 07/06/2017 at 00:07

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LJ909 > nermal 07/06/2017 at 00:10

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Every single payment was late. From what I saw there hadnt been a single on time payment since she got the car. I doubt they are trading it in or even attempting to. She also had an unpaid balance charge off on another car that she still owed $14,500 on.

LJ909 > merged-5876237249235911857-hrw8uc 07/06/2017 at 00:12

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By my math and a few other people on here its almost 20%.

merged-5876237249235911857-hrw8uc > LJ909 07/06/2017 at 00:29

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That sounds more reasonable a percentage, I knew it news that calculating it properly, without amortization table and all that, I’m a bit out of my depth. That’s crazy to think that someone would pay nearly double for a car... wow, the stupidity of people sometimes amazes me. Even if someone is in a real bad way with their vehicle, if they can somehow swing a $700+ payment, they can make some hefty repairs to the vehicle they have, assuming they have a vehicle. And then there would be some months where you wouldn’t have repairs, so you could in essence bank that for the inevitable replacement down the road. Just poor decisions all around.

merged-5876237249235911857-hrw8uc > LJ909 07/06/2017 at 00:36

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Nope, sorry, the blame lies directly with the person signing on the line. Nobody “needs” a new car, they want it, but don’t blame the companies for that. That’s what they’re in business for. Blame the dumbass that can’t figure out what a real budget is. The rest of us do it all the time and settle for something less than we really want at times, or sacrifice elsewhere to afford what we want.... steps down from soapbox....

merged-5876237249235911857-hrw8uc > Jordan and the Slowrunner, Boomer Intensifies 07/06/2017 at 00:41

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When you’re talking 0%, you take the money and run. But that’s for someone with good credit and a brain. You still have to do the math, as sometimes the 0% is in lieu of a rebate or something of the like. So you could end up paying a bit more overall, but normally if they will give you 0% that’s not a bad deal.

Jordan and the Slowrunner, Boomer Intensifies > merged-5876237249235911857-hrw8uc 07/06/2017 at 08:44

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Nope, it’s honest to God, no hidden fees, no fine print, 0%. Ford offers it to first time buyers to help build credit/sell you on buying new.

nermal > LJ909 07/06/2017 at 09:39

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That’s ridiculous!

rockingthe2 > LJ909 07/06/2017 at 10:23

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And this is why I’m gonna make my cars last until I can put a sizeable down payment or get 0% for a good while. Jesus tap dancing Christ that’s literally signing a bankruptcy notice. 19-20% is damn unethical. They need a “real life math” course in high school to teach people why this kinda shit is just wrong.

ITA97, now with more Jag @ opposite-lock.com > LJ909 07/06/2017 at 20:07

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My best friend since childhood does things like this. He tends to change cars every six months to a year, and he always trades in the old one and buys from a dealer and rolls the negatives equity in the next loan. It is insane. After doing this on a bunch of used cars and five or six new cars, this year he bought a new rental car spec charger for 24k and financed 40k for 84 months. I didn’t even ask what the rate was. I don’t know how he gets financed other than he does pay his bills on time. The killer part is that he pays something close to my mortgage and out of the 25 or so cars he has had, not one of them has been faster or more interesting than an NC Miata.

LJ909 > ITA97, now with more Jag @ opposite-lock.com 07/06/2017 at 20:09

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Thats just dumb. Ive known people that do that to and its like, how is your credit? If he pays his bills on time then it should be fine but still. How much negative is he rolling over? Because if its under 5 every time then its fine. But 84 on a what Im assuming is a Charger SE? Hes crazy.

ITA97, now with more Jag @ opposite-lock.com > LJ909 07/06/2017 at 20:23

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On the charger, it was 16k in negative equity rolled into it. I assume his credit is okay, but his DTI has got to be off the charts. To continue the theme, he doubled down and bought a crappy house last year on state first time buyer assistance program, so he put $500 down on a $80k house and did the 1st and 2nd Mortgage with PMI thing. I have no idea how he got that approved either. And because he bought a crappy house and spends every penny he makes, whenever anything breaks (and he isn’t even the slightest bit handy), he calls someone and whips out a credit card. He turns out to be the most impulsive person I know when it comes to money. Despite making more money than me, I don’t think he could come up with $200 for an unplanned expense without pulling out a credit card.

LJ909 > ITA97, now with more Jag @ opposite-lock.com 07/06/2017 at 20:27

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Sorry but your friend is just..dumb and bad with money. He seems to be one of those people that spends on a whim because he can. Who the hell is approving things for him? I know no dealer that would roll 16 grand over into another car. Unless he had a seriously huge down. But even then it would still be a bad deal.

ITA97, now with more Jag @ opposite-lock.com > LJ909 07/06/2017 at 20:46

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Indeed. A lot of people have tried to explain some basic finance to him... with no success. I know a couple of times a he took spot delivery of a new car and then had to give it back a few days later when one bank would finance him.

LJ909 > ITA97, now with more Jag @ opposite-lock.com 07/06/2017 at 20:48

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Yea hes not good with money at all. Its so irresponsible its not even funny and hes only screwing himself over. Whatever dealers are financing him are just as crazy.

Steve is equipped with Electronic Fool Injection > LJ909 07/07/2017 at 10:38

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Sheesh. I thought my wife and I were hosed on Meepster with 24k financed on a purchase price of $19,300 after Tax/Tag/Fees.

About 2700 in negative equity on the Kia and then a $2000 extended warranty/service program...

TomServo (Resides on the Satellite of Love) > LJ909 07/07/2017 at 10:43

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Where I live, there’s a local lawyer (ambulance chaser, personal injury) who drove an s65 Amg and a Ferrari 360 spyder with dub city rims. The S-Class got repossessed after he missed payments, and now he has a cl65 somehow, the Rates must be insane.

TomServo (Resides on the Satellite of Love) > LJ909 07/07/2017 at 10:44

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I think Kia and Hyundai do it as well. Was listening to a finance talk show and a woman called in who got a Kia (can’t remember the model, possibly forte) at 16% with a part time job making 10k a year.

PS9 > LJ909 07/07/2017 at 11:17

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$700 a month for a Journey...

Son of the Mustard Tiger > atfsgeoff 07/07/2017 at 11:23

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I’ve started doing the same but with used cars I get for a few thousand dollars. Spend a few thousand more getting it ship shape, drive the hell out of it for a few years and sell it for roughly what I bought it for. Still not the best financial move, but it doubles as my hobby so it’s much easier to justify!

Good move on the loan plan. Making a car payment isn’t so bad once you get used to it, but not having one feels so good .

jimz > LJ909 07/07/2017 at 11:42

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That’s what happens when you only look at the monthly payment. Every time I’ve bought a car or motorcycle, I’ve made sure to go line by line on all the numbers on the purchase agreement* to make sure the numbers are kosher. Let’s get to the final out the door price, and I’ll choose my financing term to fit my monthly budget. and if it requires more than the “traditional” 60 months, that’s where I step back and think whether I’m buying too much.

Of course, I have the luxury of being able to pay ahead, so when I bought my (nearly new) Ranger on a 48 month note I had it paid off in under 3 years anyway. They gave me a 72 month note on the FZ-09, sucks to be them since I’ll have it paid off in under a year at the most (no early repayment penalty.)

*Every time someone actually reads a purchase agreement, Steve Lehto gets his wings.

TylerJ > LJ909 07/07/2017 at 12:19

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A coworker’s sheet for a $36k Mustang Ecoboost somehow came up to the total of $50k. So I don’t even want to know what the total is after the interest on the loan.

CalzoneGolem > LJ909 07/07/2017 at 12:24

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81*$727.00=$58,887.00

BigBlock440 > PS9 07/07/2017 at 12:31

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Coulda had a Hellcat...

Saracen > LJ909 07/07/2017 at 16:37

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And for a Dodge Journey. Barf. One of the most bland vehicles I’ve ever driven.

MattRFrankenBenz > ITA97, now with more Jag @ opposite-lock.com 07/07/2017 at 18:24

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The most amazing part of this to me? The idea of taking out two mortgages on an $80k house. You can’t buy land here (PNW) for $80k, let alone anything with a house on it. To have two mortgages on such a cheap house? I... I don’t understand.

ITA97, now with more Jag @ opposite-lock.com > MattRFrankenBenz 07/07/2017 at 19:23

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In New Mexico, low wages tend to go along with cost of living.

MattRFrankenBenz > ITA97, now with more Jag @ opposite-lock.com 07/07/2017 at 19:55

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Ah, yeah. It’s wonderfully cheap in the desert, but there’s very little work available, from what I have seen.

NJAnon > LJ909 07/09/2017 at 23:45

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“Rookies....” -Wolverine