Just about as dumb as it gets.

[ImnoMensa]

How many of us know people in this situation?

New cars that are fully loaded — with debt - Los Angeles Times

Buying cars with reverse loans tied to them.

Now this practice threatens the economy.

Like buying homes with creative financing, buying cars with reverse loans, using credit cards, shoving mortgage and equity loans and equity lines of credit. people go wild and Charge it. Some never seem to get it. They just keep getting deeper and deeper and the banks and mortgage companies promote it, and when the crash comes, who is at fault. The stupid buyer or the stupid loans given them by banks and finance companies with no ethics.

 

[Pasofever]

I buy nothing new..I have no payments (except fairly small credit card debt) I have never had a NEW car...nor a new horse trailer..I have decent vehicles and nice trailers..all used but paid for..so if I cant work or earn money no one can take them from me..I like it like that.

 

[vraiblonde]

who is at fault.

Here's your answer:

"I didn't realize how much debt was in it," said Jennifer (Dumb As A) Post

Duh.

 

[FromTexas]

"I didn't realize how much debt was in it," said Jennifer Post, who has since moved with her family to Iowa. Now, she'd like to get rid of the truck but can't, because there's so much debt that she'd literally have to pay someone to take it off her hands.

"We have no options," she said.

Yes, you had an option; not to put yourself $44K in debt on a car worth 70% of that from the start. Stupid people...

 

[godsbutterfly]

There's a lot of truth to that saying "If it seems too good to be true it probably is." You would have thought they would have seen the problem after they did the first rollover!

 

[Lenny]

There's a lot of truth to that saying "If it seems too good to be true it probably is." You would have thought they would have seen the problem after they did the first rollover!

roductsofaliberalpublicschooleducation"

 

[Larry Gude]

Nope...

Now this practice threatens the economy.

...it does not. It's bad for the personal economy for individuals but consider;

The Ford got sold which means the manufacturer and dealer got paid as did all their people.

The old Chevy hit the used market and likely got sold so someone made some money on that.

These folks are making payments on the old car so the bank is still making money on the loan for the old car. These folks are making payments on the new one, so, the bank is good to go there as well.

These folks are stuck with a 7 year, $700 a month car payment. They'll keep paying it because;

A. They need wheels.

B. It's really not much more than a typical car payment for a $40-50,000 vehicle. $2,400 more a year is a little more than a $1 an hour over the course of the year.

C. The vehicle will last that long. Then, when they get out of this, they'll get something else and have a brand new $700 a month payment.

Moves like this are stupid only for the individual and, when you look at it, it's not as bad as the article would like it to sound. I mean, these folks are at least admitting it's their fault.

Further, and this is the most important point; discussing used vehicles in terms of what someone owes versus what they are 'worth' is like discussing the value of last nights dinner; there is NONE.

Cars and trucks are NOT investments. They are expenses. Either you are within your monthly budget for a vehicle or you are not. If ones grand retirement plan is centered around getting a car paid off and never having another payment, then you need a new plan anyway.

This is not to say that saving $700 a month isn't great; it is. The people in his article simply had no goal to get a car paid off and keep it in the first place so this much ado about nothing anyway. When someone pays off a car and then gets a bill for another $25,000, call me.

Anyone catch the $575 BILLION a year in NEW car loans? Big number.

 

[ImnoMensa]

Damn Larry you make it sound good to be in debt for twice what their car is worth.

You are right about one thing The car you buy is not worth what you paid for it the day you drive it away from the dealer, and probably isnt for the first two years.

Yes the dealer got his monsy and the cars were sold, but now its gonna be 7 years before they sell another one. Well, probably not because these people havent learned, they will do it again soon.

The vehicle might last them 7 years if thay arent commmuting to Washington from Point Lookout.

Yeah the dealer got paid, the finance company is making money ,but how about the residual business's that dont make money because these people are strapped making loan companies rich.

Now what happens when these folks find that their creative financed home balloon is coming due, their truck they are paying twice what its worth is pulling them under. They may have to file bankruptcy because they cant stay afloat any longer? Their finances are causing emotional problems at home. They may divorce. Who gets paid then?

I do blame finance companies and banks when they loan money to people who cant meet their obligations and then create ways to entice these people into greater debt than they can manage. Certainly these people arent smart to try to buy the American dream on credit, but the people who supply that credit are little better than con-artists themselves.

 

[vraiblonde]

I do blame finance companies and banks when they loan money to people who cant meet their obligations and then create ways to entice these people into greater debt than they can manage. Certainly these people arent smart to try to buy the American dream on credit, but the people who supply that credit are little better than con-artists themselves.

I disagree with that. It is not some bank's responsibility to manage your finances for you. And it's unlikely that you will get a car loan for more than you can afford anyway. What is more likely is that these people could afford their car payment easy - it's the credit card debt and other spending that's putting the nail in their financial coffin.

If people would get a handle on their money and not live beyond their means, they wouldn't have these problems. But to go through five vehicles in three years, as the one gal in the story did, is just ridiculous.

"It's our own fault that we traded in vehicles so many times, but we never thought it would get to this," said Gerhardt, a secretary who lives with her husband and two children in Clinton, Okla. She recently tried to refinance her mortgage, she said, but was declined because her car payments were too high. "Not one dealer ever said this was a problem. Ever. I never had a dealership say no."

So...what? Now it's the merchant's responsibility to manage your money for you? When you go to buy clothes or groceries, should they check your credit card balance and make sure you can afford that, too, before they sell it to you???

I am highly disturbed by this recent trend of the media trying to make it everyone else's fault when some tard spends money they don't have.

 

[GWguy]

I buy nothing new..I have no payments (except fairly small credit card debt) I have never had a NEW car...nor a new horse trailer..I have decent vehicles and nice trailers..all used but paid for..so if I cant work or earn money no one can take them from me..I like it like that.

I do pretty much the same thing. The last new car I bought was from the sale of another vehicle and a credit union secured line of credit. I have nothing but the mortgage. The ex paid all the car loans.

BUT.... very recently I got a note from Progressive with my motorcycle insurance renewal. It noted that they "couldn't give me the best rate" because I don't have a car loan, and there is no record of me having a car loan.

They raised my insurance because I don't have a car loan ....

 

[vraiblonde]

They raised my insurance because I don't have a car loan ....

Time to find a new insurance company.

 

[Larry Gude]

And that...

Now what happens when these folks find that their creative financed home balloon is coming due, their truck they are paying twice what its worth is pulling them under. They may have to file bankruptcy because they cant stay afloat any longer? Their finances are causing emotional problems at home. They may divorce. Who gets paid then?

I do blame finance companies and banks when they loan money to people who cant meet their obligations and then create ways to entice these people into greater debt than they can manage. Certainly these people arent smart to try to buy the American dream on credit, but the people who supply that credit are little better than con-artists themselves.

...is exactly the mindset of the nanny state; It's not YOUR fault. It's those darn corporations that make you do dumb things and, well, we, the state, if you'd kindly fork over some more bling, would be more than happy to relieve you of your commitments.

You can't help it that you smoke! It's cigarette/tobacco complexes fault. We'll fix it!

You can't help it that you drink! It's the alcohol industrial complex! We'll fix it!

You can't help it if you can't do basic math! It's the educational/union compl...err. No, it's uhh...

 

[bohman]

So...what? Now it's the merchant's responsibility to manage your money for you? When you go to buy clothes or groceries, should they check your credit card balance and make sure you can afford that, too, before they sell it to you???

Of course. Haven't you been paying attention?

BUT.... very recently I got a note from Progressive with my motorcycle insurance renewal. It noted that they "couldn't give me the best rate" because I don't have a car loan, and there is no record of me having a car loan.

They raised my insurance because I don't have a car loan ....

You should tell Progressive to go F themselves. I hope that isn't standard practice for all insurance companies.

 

[FromTexas]

Of course. Haven't you been paying attention?



You should tell Progressive to go F themselves. I hope that isn't standard practice for all insurance companies.

I believe what they are charging for is the motorcycle being the primary vehicle with no car ownership. If they don't drive a car, motorcycle ownership as the primary vehicle becomes more expensive due to greater risk; most insurance companies will make it cheaper if it is just a pleasure/recreational vehicle - not your only vehicle.

I will bet they don't have car insurance through Progressive. They can probably convince Progressive to lower the rate back by proving car ownership. Part of them getting their initial rate from Progressive was probably by answering some question which makes the vehicle for recreational purposes only.

I would still leave Progressive, though. You can get cheaper insurance with better service.

 

[Pasofever]

Wow I have never had a car loan I don't even know how one works...