High car payment? No problem…

[TimW451]

Viral Dealership Video Shows Monthly Car Payments Are Out of Control — Road & Track

As if anyone needed a reminder of how tough things are right now.

apple.news

 

[HangOutdoors]

Viral Dealership Video Shows Monthly Car Payments Are Out of Control — Road & Track

As if anyone needed a reminder of how tough things are right now.

apple.news

Amused. Those payments are ridiculous....

 

[adrianp89]

Kind of a silly article. I’ve know people with $1000 payments on a 35k car and $500 on a 70k car. Not much reference in the article besides the Raptor. Car payments vary greatly. I expect my next car to be in the $2,000/month range.

 

[suke]

Car sales people are notorious for having absolute shit credit. Why in the hell are you buying a 80-100k vehicle with no money down? They should be hitting up the honda dealer getting a base civic. Good grief!

 

[Ohio]

Viral Dealership Video Shows Monthly Car Payments Are Out of Control — Road & Track

As if anyone needed a reminder of how tough things are right now.

apple.news

Things must be pretty good if they can afford car payments like that. I'm guessing my wife and I make a lot more money than those people, and we have never had a car payment even approaching those. In fact, our mortgage is far less than any of those payments.

 

[adrianp89]

Things must be pretty good if they can afford car payments like that. I'm guessing my wife and I make a lot more money than those people, and we have never had a car payment even approaching those. In fact, our mortgage is far less than any of those payments.

Helps when you buy a house 30 years ago. You can’t touch any decent 3/2 with a 20% down payment for under 2k a month

 

[YoDaddy292]

Eventually you have to pay these debts off. I remember saying the same thing back in 2007……..”how does everyone afford all this shit?”. Turns out they couldn’t. Just time for the next generation to learn the hard way is all.

 

[BigN8]

How many of those dumb-assess have student loan debt I wonder.

 

[2kwik4u]

Helps when you buy a house 30 years ago. You can’t touch any decent 3/2 with a 20% down payment for under 2k a month

I've got a 3/2 with a basement and garage. Payments less than all of those cars except one.

Will say it makes me feel better about my $500/mo car payments.

 

[2kwik4u]

Eventually you have to pay these debts off. I remember saying the same thing back in 2007……..”how does everyone afford all this shit?”. Turns out they couldn’t. Just time for the next generation to learn the hard way is all.

Not really.....I know a good number of people that intend to just have a car payment forever and ever. Then it'll go away when they die. It's a dumb plan IMO, but these people exist.

Apparently a quite a few of them work at a car dealership.

 

[obrien19]

I guess include me as one of the ones with the "dumb plan". For me it's just a preference. I've leased my last three vehicles. Currenltly have new Sierra AT4X (Amazing truck by the way). But I gotta say, from when I first started driving, all I could afford was the basic shit box of a car, that you were just hoping would make it through the week, with out something major happening. I was also young and dumb, and bought a vehicle I couldn't afford and had it reposed, causing poor credit, to lead to extended experiences with shit boxes. On all of these cars, I couldn't afford to pay for other people to do the work, so I did the work myself. I made a promise, that once I was better financially, that I wouldn't by another POS. Leasing doesn't work for everyone, but for me it does. to have a vehicle, that is always modern, latest tech, and under warranty is worth the money to me. I know that's not everyone's cup of tea, and "you could be saving so much money by buying used, or by doing x, y and z". Everyone has their preference in life, and that's the beauty of life. We each get to choose what we do with it.

 

[2kwik4u]

I guess include me as one of the ones with the "dumb plan". For me it's just a preference. I've leased my last three vehicles. Currenltly have new Sierra AT4X (Amazing truck by the way). But I gotta say, from when I first started driving, all I could afford was the basic shit box of a car, that you were just hoping would make it through the week, with out something major happening. I was also young and dumb, and bought a vehicle I couldn't afford and had it reposed, causing poor credit, to lead to extended experiences with shit boxes. On all of these cars, I couldn't afford to pay for other people to do the work, so I did the work myself. I made a promise, that once I was better financially, that I wouldn't by another POS. Leasing doesn't work for everyone, but for me it does. to have a vehicle, that is always modern, latest tech, and under warranty is worth the money to me. I know that's not everyone's cup of tea, and "you could be saving so much money by buying used, or by doing x, y and z". Everyone has their preference in life, and that's the beauty of life. We each get to choose what we do with it.

Lots of folks only look at balance sheets, payoffs, and payments as a measure of value. I 100% get the time value of money. Not in terms of interest, but in terms of not having to spend time/effort on keeping something going. Everyone has priorities, and for some of us (myself included), the time saved from wrenching is worth the cash out of pocket.

To be clear, I ment dumb plan as financing over and over and always intending to have that car note sitting out there. Leasing is a different ball of wax entirely IMO.

 

[HangOutdoors]

I don't have a problem leasing and have leased many trucks. I may buy them at the end depending on what the situation is. But, leasing is based upon residual value basically at the end of the lease. My truck leases where in the 300's and 400's usually. Which I never had a problem with. Right now the leasing companies are not valuating the residual prices accordingly which is creating a larger spread and the payments are going through the roof on them. I would lease a new Expedition but they want 800+ a month for it and I am not going to do that. Nor do I ever put anything down on a lease.

 

[2kwik4u]

I don't have a problem leasing and have leased many trucks. I may buy them at the end depending on what the situation is. But, leasing is based upon residual value basically at the end of the lease. My truck leases where in the 300's and 400's usually. Which I never had a problem with. Right now the leasing companies are not valuating the residual prices accordingly which is creating a larger spread and the payments are going through the roof on them. I would lease a new Expedition but they want 800+ a month for it and I am not going to do that. Nor do I ever put anything down on a lease.

I'm always interested to hear about peoples thoughts on leasing. I know a strong majority of people are "nope, no way, no how" because they don't have anything that is "theirs" at the end. My argument has always been that I don't have much at the end anyway. My vehicles have always been worth a very small amount at the end of a lease term due to depreciation anyway. Even the ones I've taken exceptionally good care of. The premise of "paying for what you use", and negotiating a trade value up front has always seemed like a good idea to me.......yet I've never leased because I've been worried about all the people that say I'll get forked by the mileage being right.

Had a finance person at Nissan tell me that she loved leases for these same reasons, and was the first that was really open about how to get the mileage to work out for me. I drive, on average, ~20k mi/yr. I've had a high water mark of 23k and a low water mark of 15k in the last decade. Her suggestion was to lease with 18.5k miles built into the lease. The idea being that you want to get close, but not go over. You don't get your money back if you're under, but you can buy miles for 1/2 price on the front end. The goal being to limit the exposure and plan accordingly.

Beyond the lease, what draws your line at $800/mo? Is it the value proposition? You don't think it's worth that much? Budget in general? I mean, everything's going up right, that's how the world works. My $5 Netflix subscription is $19 now in ~10yrs. That's risen at a higher percentage than my car payments have. Interestingly enough about the only thing that's really been stable is my mortgage. I about choked when I bought the Q7. Payment is $720 on a $45k loan. If the market wasn't what it is, then I would be underwater in a bad way, and I've done that for years, but just rode that period out. If I could get into a FS pickup for $800/mo and have a warranty, that $80/mo would equivalent to a $3,800 warranty on what I drive now, right?

I'm mostly just rambling and thinking out loud. It's interesting to hear others insights on these things. Especially when you grow up in an exceptionally conservative area with most of your financial education coming from "Because we've always done it that way" type people.

 

[HangOutdoors]

My line isn't at $800. $500ish is about where I draw the line on a lease and actually the highest I have ever had is around $450. Personally I don't plan on spending more on a vehicle per month. In my world it doesn't make sense. Would rather spend/save for vacations, family needs, now the boat (money sink) and other random things. Would also rather put another $300-$500 in additional principal on my mortgage payment. In my mind that is more than enough for a vehicle. Others may feel differently. Nicer vehicles with better trim, etc. etc. Is just a personal tickle. I can do with out. Only reason I have a used Expedition is I needed to put 8 people in vehicle and couldn't find anything else that could do that and tow the boat.

When leases come down, which they will, I would consider a larger SUV, like the expedition but only if they come down substantially. Otherwise I will keep what I have and then maybe lease out a truck or something. If they don't come down I will be running on the used vehicle train for some time.

 

[Julian]

25 years ago my wife and I decided we'd never get a loan to buy a car (unless it was zero % financing). So we drove old cars with no payments, and put money aside in our savings account for the next car. Once we had enough, we bought a new car, and then continued that way....putting money aside as if it were a car payment until we had enough to buy the next car (with the trade in of the old one). Has saved us a ton in interest.....and forced us to live within our means and not go car shopping more than once every 4-5 years.

 

[Jim_in_Delaware]

Not really.....I know a good number of people that intend to just have a car payment forever and ever. Then it'll go away when they die. It's a dumb plan IMO, but these people exist.

I think there are a lot of people who bought boats during the pandemic using this plan. 'Lets get a 15 year loan on a bow-rider, we can afford the payments.' Doesn't matter that they have almost no equity in a boat they have been paying off for three years. Doesn't phase them until they want to sell the boat (or car) and are way underwater on the loan.

Helped my daughter buy her new Jeep a couple of months ago. Salesman asks "what monthly payment are you looking for?"" My response was "we don't care about the monthly payment, we want to know the out-the-door price," (as we already knew the approximate monthly payment before stepping into the dealership.) I have seen too many people pay a relatively high monthly payment on a cheap car because they let the salesman focus them on a monthly payment instead of a sales price.

Jim

 

[2kwik4u]

Doesn't matter that they have almost no equity in a boat they have been paying off for three years.

I did this. Little money down and a long term. The saving grace is, maybe, that I knew Yamahas held value well, and that I knew what I wanted that that I would keep the boat for a long time. I think I'm positive equity now, but only because of the market conditions. Doubt I sell anytime soon though.

 

[Jim_in_Delaware]

I did this. Little money down and a long term. The saving grace is, maybe, that I knew Yamahas held value well, and that I knew what I wanted that that I would keep the boat for a long time. I think I'm positive equity now, but only because of the market conditions. Doubt I sell anytime soon though.

I think in your case, the fun and the memories more than offset likely offset the fact that you haven't gain much equity in the boat. In your situation, I think that's great. I know of others, however, that were only border-line in being able to afford a boat, and now find them in a situation where they have to sell the boat, and owe more money on the loan than the boat is worth.

Jim

 

[crazy4life]

Never ever never put any money down on a lease. Leased my wifes car and my kid totaled it with 980 miles on it. Only 4 months old. The 4 grand I put down on it evaporated with the car. Insurance company just dealt with the leasing company because they own the car. Won't make that mistake twice.