Americans Are Taking Out Ridiculously Long Auto Loans

[kilroy8]

Wrong thread, sorry!

[JGGM]

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@Anonymous wrote:

Car dealers are predatory by nature. I am shocked they are not regulated, tbh. This probably accounts for people buying cars they really should not be buying and they are tempted by these long loan terms. 

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Car dealerships are regulated. Have to have a license to be in business with whatever state you're in. Lenders are regulated as well. People need to be personally accountable for their own decisions. It's really easy: "Mr. JGGM that truck costs $50k and your interest rate is 9.9% for 72 months"  "Oh you know what, I'll pass".

[Anonymous]

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@JGGM wrote:

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ealerships are regulated. Have to have a license to be in business with whatever state you're in. Lenders are regulated as well. People need to be personally accountable for their own decisions. It's really easy: "Mr. JGGM that truck costs $50k and your interest rate is 9.9% for 72 months"  "Oh you know what, I'll pass".

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At a state level and all states are not created equal. I would like to see federal oversight.

[MAZDA3]

I don't really see a problem with taking out a 72 month or longer loan. I took out a 75 month loan in 2017 to keep my payments under $300 (total loan was like $18.5k). The flipside is the credit union I used was offering the best rate in my area at 2.25%. 

The key here is I always pay $300/month, despite the payment being $282. So I pay more than the minimum AND I pay $150 every two weeks, which pays the loan down faster because twice a year i'm paying 1.5+ payments in a three paycheck month. At the end of the year I make an extra $300 payment as well.

Nothing at all wrong with taking out longer auto loans provided you have a plan in place to pay it back in a shorter amount of time. But having the flexibility to pay just the minimum amount if life happens in any given month is nice to have as well.

[Lucifer]

Someone offered me crack and I said yes.      It's both our faults I did crack????    Did they force me to take the crack?

Yea ..... no.    This is the fault of the consumer.

Don't take the 6+ year auto loan crack and blame your bad choice on someone else.   

[Anonymous]

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@Lucifer wrote:

Someone offered me crack and I said yes.      It's both our faults I did crack????    Did they force me to take the crack?

Yea ..... no.    This is the fault of the consumer.

Don't take the 6+ year auto loan crack and blame your bad choice on someone else.   

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Not everyone is educated about money. I have worked in banking for going on 15 yrs and the majority of our customers have very little knowledge about things financial. I usually have to explain things like I am talking to a 8 year old. 

So there's that...

[krielly]

I also took out a 6 year loan in 2017. The rate was 2.29%, so why not. I will have it paid off in 7 more payments.

My goal was to keep my debt to income ratio low, as I was going to be purchasing my Harley affew months later. That was also financed for 4 years at 2.59%, but will be paid off in 3 years.

I understand the intent behind this post, however there are often other reasons for taking out longer term loans. 

K

[Anonymous]

Many good discussion points in this thread. Of note is, once we are of legal age to make contracts it is on us to ensure we understand what we are signing!

It is not about transferring blame but taking ownership of decisions we make on what ever we do. Society is not our keeper! We are our keeper and need to own up to our actions and/or live with the results!

[Anonymous]

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@kilroy8 wrote:

Wrong thread, sorry!

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@kilroy8 ... what are you doing?

[GApeachy]

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@Anonymous wrote:

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@kilroy8 wrote:

Wrong thread, sorry!

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@kilroy8... what are you doing?

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I meant to add that we leased a new yukon for two years, had tons of problems, got them all worked out.  Then when the lease was up, it was running like a champ.  So then we turned around and bought it; sold the other new truck cause this one yukon actually was superior.  But I hated the way we went about it.  Lost a lot of money on it.  You live; you learn.  We were young.  But, >500K miles later the yukon is still running like a champ.  That takes the bite out of the original sting.  That miss step did teach us a lot later on down the road.