Fourtitude.com - A Third of New-car Buyers Roll Debt From Old Vehicles Into Their New Loans
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    1. Senior Member Sporin's Avatar
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      10-03-2019 07:54 AM #26
      Quote Originally Posted by petethepug View Post
      Hmmm ... This is great news! Wonder why itís not an advertising slogan for the cars people are rolling in and out of?

      Phfwtt ... Obviously itís 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? Itís 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?

      Kímawn, is everyone the 10 to 20 or even the 30 or 40% youíre referring to? Donít answer that ...



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      I think youíre the one talking about edge cases not me but hey if you canít manage to keep a brand new car on the road for the full length of its five-year loan, I donít know what to tell you.

      Either way I was responding to your post that this was the result of planned obsolescence by the car manufacturers and that is simply not supported by facts.

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      10-03-2019 08:18 AM #27
      Quote Originally Posted by tejlab View Post
      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.
      Any economy built around fiat currency is a perpetual credit bubble.

    4. Member col.mustard's Avatar
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      10-03-2019 08:53 AM #28
      Quote Originally Posted by Lujess View Post
      this plot alone doesn't tell the whole story though... a decent amount of folks were/are on the long term loan plan because of the super aggressive low interest rates. If a manufacturer is going to offer me a 72mo/0% loan, I'm going to happily leave that $30k+ in accounts returning ~5% (that's an interest gain of $5,423.39 over the course of that 72mo loan - 18% of the vehicle price). Even if you only have half that, $15k, in those same accounts, you're still earning $1,207.58 in the 36mo it takes to empty that account (4% of the vehicle price).


      In Re the OP, I'm not surprised by the 33% figure, but am a little surprised it's not actually higher, given the systemic completely lopsided distribution of wealth in the USA.... Making Autoloans Great Again.


      Quote Originally Posted by tejlab View Post
      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.
      I've noticed a lot of "credit boosting" commercials as well, and commercials specifically advertising that "if your credit was only better... thru our company, you'd be able to have all that shiny new stuff like your neighbor/coworker/friend."
      praise the lowered
      °save manuel!

      Originally Posted by George Bluth >>
      It's so obnoxious when VW Golf/Jetta owners comment

    5. Senior Member
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      10-03-2019 08:58 AM #29
      Quote Originally Posted by Sporin View Post
      Either way I was responding to your post that this was the result of planned obsolescence by the car manufacturers and that is simply not supported by facts.
      this

      cars last longer.. it isn't really up for debate.

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      10-03-2019 09:07 AM #30
      Something else to consider- used cars are ****ing EXPENSIVE compared to before.

      In 2003 I bought a 10 year old Accord with 90K miles for $2200. That's $3100 today and was in no way an outrageous deal. Today a similar Accord goes for about $7K. A similar year Civic (to normalize for space and performance) costs pretty much the same. I think everything flipped after the recession... but it wasn't the couple thousand cars that went through C4C that did it.

      Whole auto market is in this weird equilibrium with new/used cars and low credit. There's a glut of new cars available pushing prices down, but cheap credit allows for small payments on big balances that push prices up

    7. Member MGQ's Avatar
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      10-03-2019 10:35 AM #31
      Quote Originally Posted by petethepug View Post
      Phfwtt ... Obviously itís 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.
      Mathematically that day is always going to come unless cars suddenly stop depreciating. Buying another brand new car at the top of the depreciation curve to avoid maintenance on a car that has already seen that big depreciation and will now have a much more steady value defies logic.

      Donít put $2000 into servicing your car thatís now worth 20,000, roll the negative equity into another $35,000 car that will lose 30% in value just putting your name on the title.

      Thatís not what planned obsolescence is.
      This is only temporary, unless it works. - Red Green

    8. 10-03-2019 11:52 AM #32
      Quote Originally Posted by col.mustard View Post
      , I'm going to happily leave that $30k+ in accounts returning ~5%
      What account do you have making 5%? I have a money market account only getting ~2%, so I would like to move it over to something like you mentioned (assuming it is stable/guaranteed).

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      10-03-2019 11:56 AM #33
      Quote Originally Posted by Greasymechtech View Post
      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.
      Wall Street and Automotive Industry got one, why not us?

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      10-03-2019 11:58 AM #34
      Quote Originally Posted by CTK View Post
      Something else to consider- used cars are ****ing EXPENSIVE compared to before.

      In 2003 I bought a 10 year old Accord with 90K miles for $2200. That's $3100 today and was in no way an outrageous deal. Today a similar Accord goes for about $7K. A similar year Civic (to normalize for space and performance) costs pretty much the same. I think everything flipped after the recession... but it wasn't the couple thousand cars that went through C4C that did it.

      Whole auto market is in this weird equilibrium with new/used cars and low credit. There's a glut of new cars available pushing prices down, but cheap credit allows for small payments on big balances that push prices up
      I am glad I am not out of touch, because that's what I felt like looking at used car prices recently.

      GF is going to be looking for a new car soon, and we started casually looked at used cars. I find the prices to be insane on a lot of them but I also havent shopped used in awhile. So in my head I was like, am I totally out of touch with used car prices nowadays?

      That's why I am also just thinking we do something like a 0 down lease for low $200s instead, get a warranty and whatever just add the payment into the budget for 3 years.
      Last edited by Bonk2Hossa; 10-03-2019 at 12:09 PM.

    11. Member Egz's Avatar
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      10-03-2019 12:01 PM #35
      I'm guilty of this, but only because I had new car ADD. Bought a Honda Civic when I needed something more reliable as a DD. Got bored after 2 years, traded for a Fiesta 1L. 2 years later, got tired of being cramped, traded for the Fusion.

      Actively working on not doing that again, so I've had the Fusion now for 3.5 years now. Fortunately the car market is in shambles, so there really isn't anything out there I feel the desire to trade in for.

    12. Member The_Real_Stack's Avatar
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      10-03-2019 12:08 PM #36
      Quote Originally Posted by CTK View Post
      ITT: Ramseyites circle jerk each other over the moral superiority they have achieved through personal finance.
      Nothing TCL/TFL loves more.


      And, no, by the way, I haven't done this, and I'm three payments away from owning two of our three cars outright, and the third is a lease with a tiny payment. Ohh, yeah, that circle jerk feels good.
      Quote Originally Posted by Volkl View Post
      My wife wanted a SUV with a manual transmission. I suggested a Wrangler, she said no way, too masculine

    13. Member MGQ's Avatar
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      10-03-2019 12:13 PM #37
      Quote Originally Posted by Egz View Post

      Actively working on not doing that again, so I've had the Fusion now for 3.5 years now. Fortunately the car market is in shambles, so there really isn't anything out there I feel the desire to trade in for.
      Did you know the 2019 Mustang GT has 460 hp now and does 0-60 in under 4?
      This is only temporary, unless it works. - Red Green

    14. Senior Member AZGolf's Avatar
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      10-03-2019 12:14 PM #38
      From the other thread with a similar direction:



      Source: https://fred.stlouisfed.org/series/TDSP

      I know everybody wants to believe that people are further in debt than ever before, but that's not what the data shows in terms of monthly payments. Yes, terms are getting longer due to near-zero interest rates, but that doesn't mean it costs you any more. A 6 year loan at 1.9% costs you much less in interest than the old 4 year loans at 7.9% that were common in the 1990s when I got my first car.

    15. 10-03-2019 12:14 PM #39
      I read that article too - no surprise, but it might be to WSJ readers.

      Quote Originally Posted by UncleJB View Post
      I thought the percentage would be larger to be honest. No different than anything else - mortgages, credit cards, and on and on.
      Quote Originally Posted by Shmi View Post
      Well with the longer and longer term car loans going out these days, it's only going to get worse.
      With new car prices climbing and consumers using longer loan terms to buy them, cars will be treated like mortgages soon/now. *shrug

    16. Member petethepug's Avatar
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      10-03-2019 12:17 PM #40
      1) Planned obsolescence is not what you feel. Itís engineering standards created with a goal in mind. Joe public isnít privy to that information on the window sticker. The jump to assign planned obsolescence as unreliable should also be noted it can mean very reliable.

      2) Current market value is what turns planned obsolescence on its head to allow design, good or bad, to base a vehicles value.

      Either one of the above is a difficult case and point to ascertain. Ultimately, time, through appreciation or depreciation is what assigns the valuation factors of a vehicle. A VW 21 window bus for six figures, a Pontiac Aztec for $5h or an old Honda for $4K.

      https://newatlas.com/the-100-most-re...in-order/5657/

      Itís a pleasant and interesting discussion because the goal post of whoís right can be moved to suit a plethora of scenarios.




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    17. Senior Member
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      10-03-2019 12:27 PM #41
      Quote Originally Posted by petethepug View Post
      1) Planned obsolescence is not what you feel. Itís engineering standards created with a goal in mind. Joe public isnít privy to that information on the window sticker. The jump to assign planned obsolescence as unreliable should also be noted it can mean very reliable.
      What now?


      Itís a pleasant and interesting discussion because the goal post of whoís right can be moved to suit a plethora of scenarios.


      Oh I see you moved the goal posts.

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      10-03-2019 12:27 PM #42
      I don't see a problem with long loans on things that last a long time. The wife's 2014 mazda still runs perfectly and is almost mint inside. There's minor wear on the driver's seat and floor mat. 112k miles and zero need to even think about replacing it... Extra cost has consisted of oil changes every 5k, trans fluid every 50k, one set of winter tires+wheels, one set of summer tires, and one set of brake pads.

      I suspect it'll need a battery at some point too. Better trade it in first!

    19. Member The_Real_Stack's Avatar
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      10-03-2019 12:29 PM #43
      Quote Originally Posted by troyguitar View Post
      I don't see a problem with long loans on things that last a long time. The wife's 2014 mazda still runs perfectly and is almost mint inside. There's minor wear on the driver's seat and floor mat. 112k miles and zero need to even think about replacing it... Extra cost has consisted of oil changes every 5k, trans fluid every 50k, one set of winter tires+wheels, one set of summer tires, and one set of brake pads.

      I suspect it'll need a battery at some point too. Better trade it in first!
      Something reliable, sure.

      I wouldn't want to take a long loan on something unreliable, like potentially my Jeep, because it sucks to be paying for repairs while also making payments.
      Quote Originally Posted by Volkl View Post
      My wife wanted a SUV with a manual transmission. I suggested a Wrangler, she said no way, too masculine

    20. Member
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      10-03-2019 12:31 PM #44
      Quote Originally Posted by petethepug View Post
      1) Planned obsolescence is not what you feel.
      Which makes your posts even weirder- the average age of cars on the road has basically been increasing non stop for the last 50 years. If your planned obsolescence conspiracy theory had any validity whatsoever this would not be the case.

    21. Member MGQ's Avatar
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      10-03-2019 12:35 PM #45
      Oh so the value of a collectible VW bus is why people dump a 2016 on a new shiny X
      This is only temporary, unless it works. - Red Green

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      10-03-2019 12:37 PM #46
      Quote Originally Posted by Bonk2Hossa View Post
      I am glad I am not out of touch, because that's what I felt like looking at used car prices recently.

      GF is going to be looking for a new car soon, and we started casually looked at used cars. I find the prices to be insane on a lot of them but I also havent shopped used in awhile. So in my head I was like, am I totally out of touch with used car prices nowadays?

      That's why I am also just thinking we do something like a 0 down lease for low $200s instead, get a warranty and whatever just add the payment into the budget for 3 years.
      Well I think the curve has changed. I'd say cars 5 years old or less are pretty cheap. It's that 10-15 year old range where things are totally out of control. If a car can keep 50% of its value at 5 years old it holds its value well. So one would guess a 10 year old car might only retain 25% of its value. In reality for a lot of cars it's closer to 30-40%.

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      10-03-2019 12:39 PM #47
      Quote Originally Posted by CTK View Post
      Any economy built around fiat currency is a perpetual credit bubble.
      I'm not disagreeing with this premise, but it would not surprise me if you also believe that income taxation is theft.

    24. Member petethepug's Avatar
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      10-03-2019 12:42 PM #48
      Ha! The only thing thatís weird is quoting a portion of a post to change itís meaning. Then ...

      Quote Originally Posted by CTK View Post
      this would not be the case.
      and thatís not weird, thatís called something else.


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    25. Member
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      10-03-2019 01:08 PM #49
      Quote Originally Posted by oidoglr View Post
      I'm not disagreeing with this premise, but it would not surprise me if you also believe that income taxation is theft.
      No, I'm not some weirdo libertarian gold bug. Countries need govts, govts need revenue, income taxes are the best we have been able to come up with so far.

      But I think a lot of Ramseyites pine for the day when all debt is paid off. Our economy doesn't work that way

    26. Member Alpha-3's Avatar
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      10-03-2019 01:17 PM #50
      Quote Originally Posted by Sporin View Post
      Oh please. Itís not planned obsolescence. Cars are lasting longer and longer. Thereís not a single new car sold in the last decade that canít 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 canít keep a new car on the road for 60 months (or even 72 months) than thatís on you.
      ^^^^^
      There you go. That's it, in a nutshell.
      2014 CSG GTI

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