Keith Tanner said:In reply to Motojunky :
One of my wife's coworkers keeps buying new cars and rolling the negative equity into the new ones. I swear she doesn't even test drive them, she just buys an image and then moves on. They just traded in a truck that was 3 months old. I'd hate to see what the negative equity looks like now.
See, THIS is a case study in favor of leasing.
John Welsh said:If you can't stop the bad decision, text the owner and offer $11k for the Civic
Edit. I guess that won't work. It would require $19k to get the title.
They probably still owe $19k on a five year old Civic because they rolled the previous car's remaining debt into THAT one.
They don't pay off your car for you when you trade it in, they pay off the car for you so they can make money off of that debt with the interest.
As was pointed out in the Nissan thread, the main goal of selling cars is financing debt. Of course they want to finance your debt from a previous car. That's like making two car sales at the same time. And THEN they get to sell your trade in.
In reply to Pete. (l33t FS) :
thats why they hate me. We write them a check and walk out.
Duke said:Keith Tanner said:In reply to Motojunky :
One of my wife's coworkers keeps buying new cars and rolling the negative equity into the new ones. I swear she doesn't even test drive them, she just buys an image and then moves on. They just traded in a truck that was 3 months old. I'd hate to see what the negative equity looks like now.
See, THIS is a case study in favor of leasing.
That is an excellent point.
I read an article recently that said there's going to be a reckoning as so many people have rolled so much debt into their car loans that they'll no longer be able to get financing. They were saying that car loans on the order of 150% of the value of a new truck are not uncommon. Think about those numbers for a minute.
Peabody said:Duke said:Keith Tanner said:In reply to Motojunky :
One of my wife's coworkers keeps buying new cars and rolling the negative equity into the new ones. I swear she doesn't even test drive them, she just buys an image and then moves on. They just traded in a truck that was 3 months old. I'd hate to see what the negative equity looks like now.
See, THIS is a case study in favor of leasing.
That is an excellent point.
I read an article recently that said there's going to be a reckoning as so many people have rolled so much debt into their car loans that they'll no longer be able to get financing. They were saying that car loans on the order of 150% of the value of a new truck are not uncommon. Think about those numbers for a minute.
In the case of this particular woman, she wouldn't be able to get through a lease. I think she turns vehicles over every 6 months on average. "I think a Wranger would be cool! Oh, this is terrible to drive. Hey, look at how pretty that Ram truck is! Hmm, I'll save money if I buy a more fuel efficient vehicle. This econobox is no fun to drive, I should get a Jeep..."
In reply to Keith Tanner :
Early turn-in on the lease has to be cheaper than just stacking up so much depreciation into your next loan payment. And you can usually lease for 24 months - I know some places will go shorter, but I bet they'll still use the 24-month residual.
Regardless, it ain't me doing it, so she can be as stupid as she wants.
It amazes me how stupid people can be financially. And how ruthless the dealership people must be to write a deal like this one. Gee, they offered me half my payoff on a 5 year old civic, so my new kia is costing me $10K over list.
If someone is 10K under water on a civic and only has 2K to put down on a new car what are the chances they will default on the loan? Not my problem I still get a comission on the sale says the dealer.
And doesn't the loan company see a problem with taking a customer with this history? I guess not, make the sale report good numbers and if the company goes bankrupt not my problem?
porschenut said:And doesn't the loan company see a problem with taking a customer with this history? I guess not, make the sale report good numbers and if the company goes bankrupt not my problem?
The history is that most people keep making payments. Same reason they keep handing out credit cards. The ideal situation is that you're always paying and never pay them off
This thread reminds me of the segment that John Oliver did a number of years ago where they tracked this one used car between like 6 owners and the same dealer who kept selling it to people who couldn't afford it and repossessing it. It was a Kia Rio or something. The show ended up buying the car at the end. It was a pretty sad, but hopefully enlightening story.
It wasn't until I saw KIA written in all caps that I consciously connected it with the phrase "Killed In Action."
In reply to confuZion3 :
That's the key. You don't sell the car once. You sell it over and over again. It's basically a very expensive rental for people.
Peabody said:porschenut said:And doesn't the loan company see a problem with taking a customer with this history? I guess not, make the sale report good numbers and if the company goes bankrupt not my problem?
The history is that most people keep making payments. Same reason they keep handing out credit cards. The ideal situation is that you're always paying and never pay them off
They don't make money if you pay it off. The interest payment is their desire, especially on a credit card. My shop Visa card had a $7300 balance after October, when I bought a E36 M3load of stuff, including a $6100 used engine.
"If you make only the minimum monthly payments, we estimate it will take 63 years and 4 months to pay in full."
I wrote a $7300 cheque at the end of the month, instead.
In reply to Streetwiseguy :
What'd you buy, a 1.0 Ecoboost?
My WORD those engines are expensive. Had a 1.0 manual trans Focus brought in for stalling last month. No mention of the oil light on the dash. Oil pump belt broke. It would run until it locked up. Wait a little while and it'd start and run again. 22hr or something to replace the belt, and that's assuming the engine is any good.
Used engines are about $5000-5500 US. According to Alldata, new longblocks from Ford are a hair under $4k.
They did not fix it. I did not make an offer to buy.
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