I’m refinancing this terrible loan and the bank person grimaced when they saw this.
hey millenials: car dealers are not a good choice of bank. please tell your generation about credit unions: https://www.logixbanking.com/rates/vehicle-loans
And maybe buying something that isnt sold by a dealer…
Definitely shop around, but sometimes the dealership does have an actual competitive offer. Especially if you threaten to use external financing (and have the pre approval in hand), they might knock down their interest rate to save the deal, as the loan is where the money actually is.
That is, if they approve you at all. Their requirements are higher, which is why you would get a better rate through them. If you can’t, you may need to go through a different company with a higher interest rate. Should that be the case, it’s best to consider getting a car (and the loan) significantly less in than what you’re approved for.
Is cash for a beater car no longer an option? I don’t want to be a “less avocado toast more bootstraps” person but a loan for a used car sounds wild to me. Maybe I’m out of touch. My vehicle is old enough to drink
Cars have been expensive for a few years now, bought an 08 Subaru in 2020, it’s worth more now than what I bought it for.
I have a good '08 car that I bought with cash 10 years ago for $3000. I got it from a guy who exclusively sells and fixes this model of car. I went back last year to get my car fixed and looked at the cars he was selling. '08s were starting at $5000.
And this is gonna get wse with the new car tariffs o
That’s part of why I bought now. Life forced this on me, so I had to take the bad deal now and then refinance.
Yeah it’s gonna get rough. Let’s hope people connect the dots
Older subarus are a high value and age well. I would expect it to hold decent value but that is crazy to be worth more 5 years later
Not often. Used cars, at least where I am, are all pretty pricey, and with rent and shit being out of control, I’m not surprised younger people can’t afford to save enough to buy one outright. I’m lucky to be older and I bought my current car at 0% interest in 2012. I’m keeping it until it gives up because I know we’ll never see that kind of deal again.
0% for a used car?
No idea if it’s still the same nowadays, but I also bought a used car in 2013 at 0% interest. It certainly was possible then.
Its still sometimes possible. Manufacturers will periodically run 0% interest loans specials for people who qualify. Tesla (don’t actually buy one) runs the deals all the time actually.
Nah mine was new but I think my ex only paid 1.9% on a used one. Interest rates were amazing.
Cash for clunkers removed a significant portion of the used cars from the market. It was a while ago but its effects are still very much being felt even if people don’t realize exactly what it is.
That was back in 2009 those cars would.be dead already by now
Sure thing kid.
a loan for a used car sounds wild to me.
Predatory car loans has entered the chat.
I don’t know about Carvana, but plenty of scummy dealers will give insane rates to people with no credit check, repo the car while they’re still underwater on the loan, and sell it to someone else. You can have two or three people paying off the same car.
Oh, also, they somehow encourage the most gullible people who can’t afford their loans to just let the car get reposessed instead of attempting to sell it back to the dealer.
there are a lot of used ~2018 to 2022 cars on the market with not a lot of miles, most go for around $20k (like what I got). True beaters still go for like $10k.
Personally, I agree with your mindset, but I’m pretty handy with fixing/maintaining my own vehicles. For someone needing something to reliably get back and forth to work/school/daycare, I understand why people don’t go this route. Shop lead times have skyrocketed in the last few years, as have repair prices. Sometimes you just need something you don’t have to worry about.
I would strongly advise against drinking your vehicle regardless of how old it is.
A car that is the current model year is “used” as long as it’s had an owner. That’s what these loans are for. You can’t even get a loan for cars past seven years old with most lenders.
I mean yeah, that’s why I said beater. I just wouldn’t expect someone young or looking for a first car to be buying a current model year with low miles anyway.
I guess I was thrown when you said a loan for a used car was wild.
Since this is aimed at Gen Z, if you can buy a car outright or close to it, I would recommend still financing, but paying it off easily to build credit.
Loans with interest rates above inflation are weapons. They are violence. Why should we all have to pay more than something is worth for our education, our transportation, our housing? Why are we paying directly for these things at all?
Government should be providing all this for its people. Higher education should be provided. Starter housing should be provided. Public transportation should be provided.
You pay for the ability to access capital you do not currently have. Nobody owes you thousands of dollars with which to but a car. If you want to buy a car with money you don’t have, then you have to give the bank something in return. That something almost always is “more money than we initially lent you, over the course of the loan period” and if you shut that down, banks just won’t give loans anymore. Suddenly poor and middle class people have lost their biggest tool for accessing capital.
Lack of public transport is a separate problem. The US has dropped the ball across the board there. Only a handful of cities have any reasonable public transport and even those systems are old and often shitty.
Education being so expensive that it needs to be financed, is a separate problem. Education is too important to leave to the free market, letting our system metastacize to this extent is the result of decades of compounding failures.
16.9% interest is predatory, but “interest above inflation” is necessary if you want banks to do anything besides hoard money.
See, that whole entire thought process just doesn’t hold me prisoner anymore like it used to.
If you want the capital to survive (buying a car is survival in most places) or to try and get ahead, you must pay more capital than you have. If the banks don’t make money this way, the poor and middle class will fail.
I don’t think this is true economical theory anymore. It’s corrupted greed that’s overtaken institutionally in every facet of life including academia. It’s like saying nuclear war is the best peace keeping practice.
No no surely making the rich richer will help, it’s done so great the last 50 years!
Cool how you used the quote markdown for a bunch of stuff I didn’t say.
My argument is “The banks have a ton of capital. They are willing to grant lower classes access to that capital, as long as the bank is able to make some profit from it. If the bank cannot profit, they will just sit on that wealth and lower classes will lose the only access to such capital that they currently have.”
Like I said, the fact that many borderline necessities in the US require access to capital beyond one’s individual means, is a real problem but separate from this argument.
Well I’m hoping to live in a world where banks don’t provide loans anymore. I’m demanding a better world than this nightmare that is unregulated capitalism in the US.
I’m demanding a better world than any economic system that incentivizes and rewards screwing each other over and hurting one another in a race to get ahead.
Capital investment is necessary regardless of your chosen economic system. Without banks, you’re relying solely on a central government to dole out capital investment which has historically turned out poorly
Providing loans is a major part of a bank’s job though? Like yes it’s wrong that we need loans for necessities like transportation, education, healthcare etc, but even if all those were unnecessary banks would still need to provide loans so that people can start businesses or build houses.
considering that you likely live in the US, just wait 6 months and this loan would be below monthly inflation
Lol…that’s funny and also so depressing.
Check with and get pre-approval from a credit union or two near you. Go with that pre-approval for the car you want.
Rarely do the dealers find or provide a better deal. DON’T let them focus you on your monthly payment. Look at the complete picture.
Carvana is a sister company of drivetime. Drivetime’s target customer base is sub-prime. Putting 2 and 2 together, this doesn’t surprise me at all. Their lowest interest rate might be 16% (for their target customer base) and goes upwards of 30%
Wild. I bought a car from Carvana in 2022 and the interest rate back then was 6% on a 3-year loan, which was on the high side of normal for the time period.
At drivetime, I’ve been told that my rates might be lower if I got a pre-approval from my bank instead of going through them (if I have the credit score for my bank/credit union to give me a loan)
Always buy from a person not a dealer. Look for a model known to be reliable and cheap to fix and maintain. I bought a 95 Ford Ranger for $1,800 and am still driving it 5 years later. I’ve maybe put another 2k into it from oil changes, tires and brakes. People pay way too much for bells and whistles.
I did this in my younger years and the cars I got always had some hidden fucked up problem.
The most notable was cemented in spark plugs, rip that Honda Civic I drove it till it couldn’t hold on anymore lmao it ended up sitting for a long while then someone stole the catalytic converter lmao
Lol yeah there’s always that risk. Feel like you want to find some boomer that’s selling his daughters car that just went to college or something.
Yeah right on!
I did this in my younger years and the cars I got always had some hidden fucked up problem.
My minivan is (well, was) like this. The person I bought it from said the roof-mounted DVD player was professionally installed. I got it home, pulled the interior apart (I was installing a new headunit, backup camera, and some other things), and found the “professionally installed” wiring crossed in front of the side curtain airbag. It wasn’t secured anywhere at all, either. Just flopping around. I fixed that up along with some other issues I found.
Don’t buy cars. Ban them.
A lot of us wage slaves live in areas that are too spread out to bike, have no public transportation, and we can’t afford to move to a higher COL area that has those amenities. For example, my commute to work is typically 70ish miles, one way. There aren’t better job prospects within my niche industry that are available to me. I’m working towards moving closer to work, but I’ll be moving to a smaller town that is even less bike-able/walk-able. IMO, your position requires an amount of privilege I don’t have.
Facts. I live in Maine. I dare anyone that says to ban cars to come live here without one. The only form of public transportation here is a very shitty public bus system. If you live outside of its route, you are shit out of luck. Its why you have a lot of old people driving here that honestly should have had their license revoked a decade ago. Can’t take their license away cause they will have no way to access the resources they need to survive. But shouldn’t let them keep their license cause they are a major danger on the roads.
My commute is 117 miles one way :(, return to office has really fucked me. I won’t be moving anytime soon but am working on getting a job closer to home.
Yes, let’s ban the single most common form of transportation in the country because you’ve never had to live in an area with zero public transport.
Great line of thinking, there.
I took a loan out on a brand new car many years ago, a 6 year term with 17% interest (don’t do that, kids). But I was able to refinance to ~4% a year later, we knocked another year off the remaining term (5 years to 4 years), and I still ended up paying less per month than the original payment.
I miss that car sometimes. It was a 2012 Kia Soul, and I really liked it. I went on a 3-week business trip a few years ago, and my rental happened to be a 2021 Kia Soul in mustard yellow. I loved every minute of it.
I have a loan right now that is at like 3%. I can pay it off now if I wanted to, but it’s so low that I can easily make more money by putting it away and collect interest on it. It would be kinda nice to get a new car, but where this country is headed, it’s not worth it. I feel bad for the younger generations and what lies ahead for them.
I’ve got four paid-off vehicles (2 cars, 2 motorcycles), and am about to acquire another car (W123 diesel Benz) from my wife’s grandmother who is no longer able to drive.
I don’t care to have any more car payments, and I hope it stays that way for a long time.
I bought a used 2018 Kia Soul about 6 months ago. I love it. Still paying it off, but it’s super, super reliable.
