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    1. Member Senior Member's Avatar
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      10-02-2019 07:46 PM #1
      Seems like the same old stuff, but it just keeps getting worse!


      Barrett Emke for The Wall Street Journal
      Oct. 1, 2019 10:46 am ET
      https://www.wsj.com/articles/the-sev...rs-11569941215

      2009 - 2019


      A third of new-car buyers who trade in their cars roll debt from old vehicles into their new loans, according to car-shopping site Edmunds. That is up from about a quarter before the financial crisis.

      Americans have been borrowing to buy their cars for decades, but auto debt has swelled since the financial crisis. U.S. consumers held a record $1.3 trillion of debt tied to their cars at the end of June, according to the Federal Reserve, up from about $740 billion a decade earlier.


      Just 18% of U.S. households had enough liquid assets to cover the cost of a new car, according to a Wall Street Journal analysis of 2016 data from the Fed’s triennial Survey of Consumer Finances, a proportion that hasn’t changed much in recent years.

      Even a conservative car loan often won’t do it. The median-income U.S. household with a four-year loan, 20% down and a payment under 10% of gross income—a standard budget—could afford a car worth $18,390, excluding taxes

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    3. Senior Member UncleJB's Avatar
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      10-02-2019 07:51 PM #2
      I thought the percentage would be larger to be honest. No different than anything else - mortgages, credit cards, and on and on.

    4. How do I resize a picture? Cabin Pics's Avatar
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      10-02-2019 07:54 PM #3
      Yeah, I'm surprised it's only a third.
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      Quote Originally Posted by cockerpunk View Post
      maybe its just me, but i wouldnt put anything in the circle of "unrealistic" when it comes to sex.

    5. Member kraut_pauer79's Avatar
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      10-02-2019 08:01 PM #4
      Well if people did corny old-fashioned stuff like live within their means and not dump a car every time a valvestem cap falls off it, they could probably pay them off and not deal with negative equity. But I know not caving to the pressures of your equally-broke friends, neighbors and coworkers clowning you over having an old car can be difficult for some.
      Quote Originally Posted by Metallitubby View Post
      Subaru fans chalk their negative experiences up to being part of a smaller brand and character. Something about beards, lesbians, and douche-flutes.

    6. Member 2.0_Mazda's Avatar
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      10-02-2019 08:12 PM #5
      I think my friend is still paying off his 2014 Accent, after he traded it in for a 2015 Wrangler, and now a 2019 Impreza.

      Also surprised its only a third.

    7. Member Shmi's Avatar
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      10-02-2019 08:15 PM #6
      Well with the longer and longer term car loans going out these days, it's only going to get worse.

    8. Member petethepug's Avatar
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      10-02-2019 08:44 PM #7
      Planned Obsolescence or exactly the opposite of how they used to engineer and build vehicles.

      I wonder what disadvantaged up and coming young drivers will do to make hot rods of all the obsolete electric car parts 25 years from now. Tesla guts in Supra body.


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    9. I’m not a loser. I’m a winnah!! patrikman's Avatar
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      10-02-2019 09:00 PM #8
      It’s the American way.
      this signature kills fascists.

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    10. Senior Member Iroczgirl's Avatar
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      10-02-2019 09:44 PM #9
      It's just ridiculous.

      I'll keep driving my daily, '97 Nissan hardbody. Paid for. Mint! Reliable! And without nannies.
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    11. Senior Member Sporin's Avatar
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      10-02-2019 10:01 PM #10
      Quote Originally Posted by petethepug View Post
      Planned Obsolescence or exactly the opposite of how they used to engineer and build vehicles.
      Oh please. It’s not planned obsolescence. Cars are lasting longer and longer. There’s not a single new car sold in the last decade that can’t survive even a longer payment term.

      People CHOOSE to not keep them until paid they are off. They want to upgrade or come up with some other reason the just *have* to get something different.

      If you can’t keep a new car on the road for 60 months (or even 72 months) than that’s on you.

    12. Member
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      10-02-2019 10:01 PM #11
      My payment hasn't changed

    13. Geriatric Member BRealistic's Avatar
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      10-02-2019 10:14 PM #12
      This is nothing new.
      Would like to see some type of comparison to other years for stat to have some actual value.

    14. I need new ones NeverEnoughCars's Avatar
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      10-02-2019 10:16 PM #13
      Quote Originally Posted by patrikman View Post
      It’s the American way.
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      Quote Originally Posted by Turbio! View Post
      Pedantry: winning arguments through exasperation since 1651. An Old World Tradition!
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    15. Member MGQ's Avatar
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      10-02-2019 10:21 PM #14
      The median-income U.S. household with a four-year loan, 20% down and a payment under 10% of gross income—a standard budget—could afford a car worth $18,390, excluding taxes
      haha- there's no way I would buy a car that cost what this works out to if I do the math backwards from 10% of gross income.
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    16. Member Travis Grundke's Avatar
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      10-02-2019 10:59 PM #15
      This is what cheap credit gets you. Same goes for the housing bubble, the academic bubble, and in many regards - healthcare.

      I'm not saying that the answer is to crank interest rates up to 20%, but this is a massive part of the problem.

    17. Member adrew's Avatar
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      10-02-2019 11:37 PM #16
      I did it for the first time when we wanted to dump our old failed Mitsubishi experiment and have no regrets. I was like $2500 upside-down on it, bought the Corolla for $500 under invoice and financed it all at 0% for 6 years. I think the note was for about $21k ($17,500 + 6.25% sales tax + $2500 + a couple hundred in doc fees).

      We've had it for almost 3 years ... I haven't paid any extra and owe $11,700 on it -- just checked KBB and it says "good" trade-in is $11k, so overall I am satisfied with the transaction (just wish I wouldn't have cheaped out to begin with). I did get gap insurance/new car replacement for the first time ever since it is only $8/6 months through my car insurance.

      I did make sure to buy a new car with decent resale value and lots of incentives and negotiating room to minimize the neg equity as much as possible.
      Improving the signal-to-noise ratio

    18. I’m not a loser. I’m a winnah!! patrikman's Avatar
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      10-02-2019 11:41 PM #17
      Quote Originally Posted by NeverEnoughCars View Post
      Makes
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      Again
      !
      Yeezey would wear that hat.
      this signature kills fascists.

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    19. 10-02-2019 11:43 PM #18
      I keep seeing commercials for credit checking/improving websites. It seems Americans think credit is the answer to all their problems, makes me wonder if we're in another credit bubble.

    20. 10-03-2019 12:02 AM #19
      Debt based economy requires debt to function.

      That 1/3 probably has more wasteful spending than I do.

      I have no debt and profit from yours.

      Too bad these losers demand a govt bailout for their stupidity.

      Idiocracy alive and flourishing in the USA.

    21. Member petethepug's Avatar
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      10-03-2019 01:21 AM #20
      Quote Originally Posted by petethepug View Post
      Planned Obsolescence or exactly the opposite of how they used to engineer and build vehicles.
      Quote Originally Posted by Sporin View Post
      Oh please. It’s not planned obsolescence. Cars are lasting longer and longer. There’s not a single new car sold in the last decade that can’t survive even a longer payment term.

      People CHOOSE to not keep them until paid they are off. They want to upgrade or come up with some other reason the just *have* to get something different.

      If you can’t keep a new car on the road for 60 months (or even 72 months) than that’s on you.
      Hmmm ... This is great news! Wonder why it’s not an advertising slogan for the cars people are rolling in and out of?

      Phfwtt ... Obviously it’s not something crazy (like depreciation) that motivates owners like the grim reaper to trade out of those reliable cars. Every owner should earn the right to pay for that 50K or 100K major service on their 60-70% devalued vehicle.

      All drivers are the same right? It’s just Not factual that keeping a car for the entire marriage of their loan term is good for everyone. Stupid people with growing families, long commutes, live in the rust belt or change their RV hauling needs must abide to one, absolute standard right?

      K’mawn, is everyone the 10 to 20 or even the 30 or 40% you’re referring to? Don’t answer that ...



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    22. Member Surf Green's Avatar
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      10-03-2019 06:43 AM #21
      Quote Originally Posted by Sporin View Post
      People CHOOSE to not keep them until paid they are off. They want to upgrade or come up with some other reason the just *have* to get something different.
      Yep. And they're eager to spend big $$$ on tech that inflates the purchase price. The only concern is being able to swing the monthlies.

      There's no one to blame here but the consumer.
      I keep up with traffic with only 90 hp. What's your superpower?
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    23. Member
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      10-03-2019 07:14 AM #22
      Quote Originally Posted by petethepug View Post
      Planned Obsolescence or exactly the opposite of how they used to engineer and build vehicles.
      You mean back in the good old days when cars were actually worn out at 100k miles?
      My dad says he can remember cars in the 70s that would have holes rotted through them within a couple years of rolling off the lot.

    24. Member
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      10-03-2019 07:38 AM #23
      ITT: Ramseyites circle jerk each other over the moral superiority they have achieved through personal finance.

    25. Member
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      10-03-2019 07:44 AM #24
      Quote Originally Posted by g34343greg View Post
      You mean back in the good old days when cars were actually worn out at 100k miles?
      My dad says he can remember cars in the 70s that would have holes rotted through them within a couple years of rolling off the lot.
      Yeah I remember my mother's old 1984 Pontiac being nearly mechanically totaled with about 90k miles. People forget how reliable cars have become.

      With that, though, I think people are using the low lease payments to reach to cars they otherwise couldn't afford. And then after being way over miles or just wanting to make a move before the end of their lease, buyers roll negative equity into the next bad decision.

      But you know what, I get it. I own my Buick outright and the only reason I haven't paid off my wife's Jeep is because it is a 0% loan. But when I see a shiny Tesla M3 Performance or a Guilia QF, I get the itch to make a TFL disapproved decision. I ultimately remember why that's a bad idea when my daughter vomits in my car or I see my Buick getting 30+ mpg on regular.

    26. Member Lujess's Avatar
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      10-03-2019 07:50 AM #25
      From that same article...again no surprise...but the stats/trends on the terms of car loans are sort of astounding to see laid out - particularly how small the % of what I would call "reasonable" terms are (1-48 months)

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