Absurd Car Loans: Are We on the Edge of Another Bubble?

[veeman]

another argument for getting a bigger car is safety.  Although the government doesn't like to hear it or even acknowledge it, there is no getting around F = m X a.  All the airbags in the world and high strength steel is not going to make you safer as an occupant in a very small car vs being the occupant in a much larger car in a two car collision.  Yes there are many other variables like risk of flipping in an SUV and one car collisions etc., but i personally would drive a camry over a corolla because i "feel" safer on the road.  This is particularly so if your commute involves driving on two lane opposite driving traffic at relatively high speeds. 

[Lebowski]

Yeah, for a mainstreamed I'd always want something bigger than a focus let alone a fiesta. But, I also drive an SUV (and frequently am glad I have the space).

[2o6]

Me personally, I just don't like driving that big of a vehicle. Most midsizers are very disconnected to drive, IMO.

[93JC]

another argument for getting a bigger car is safety.  Although the government doesn't like to hear it or even acknowledge it, there is no getting around F = m X a.  All the airbags in the world and high strength steel is not going to make you safer as an occupant in a very small car vs being the occupant in a much larger car in a two car collision.  Yes there are many other variables like risk of flipping in an SUV and one car collisions etc., but i personally would drive a camry over a corolla because i "feel" safer on the road.  This is particularly so if your commute involves driving on two lane opposite driving traffic at relatively high speeds. 

[Madman]

Don't even get me started about idiots who buy gigantic SUVs then bitch about how much gas it guzzles and how difficult it is to park!

I never hear SUV owners complain about that stuff.

You don't know very many women, do you? 

[Laconian]

How about those minivan prices, though?

My god, the sky's the limit on those things! My friend just laid down $40k on a Sienna!

[2o6]

How about those minivan prices, though?

My god, the sky's the limit on those things! My friend just laid down $40k on a Sienna!

Thats a bargain compared to a similarly sized crossover. Traverse starts at 31K with no options.

[Madman]

for Madman telling people what they need.  People buy what they want, and don't really care about your evaluation of their "needs".

That's exactly how people overextended themselves buying houses they can't afford.  And banks have encouraged this this sort of behaviour.  According to my bank, I can afford to buy a freakin' mansion.  But I know better.  Properly evaluating one's own needs and making smart decisions based on those needs will keep you out of trouble.

The hitch in your premise is the Camcord is for her (and most people) simply a better car than a Focus or a compact in general. First, when comparatively equipped a Camcord is but only 10-15% more cost; this minor bump in costs gets at least 30% more car - more room, more refinement, more safety. Second, a Camcord's ~5-10% less MPG is more than offset in the superior resale value vs. a Focus.

Congrats, you steered her wrong .

She steered herself.  Have you ever known a woman to listen to a man's advice?  Especially THIS woman, in particular.  Trust me on this one, this chick is in her late 40s and still single for a reason!

As for your "numbers", (30% "more car"? WTF?!?) a Bentley and a Ferrari also have better resale value than a Camry.  Does that mean everyone should sell a kidney just so they can roll in a Continental GT or a 458 Italia?  Consumers overextending themselves buying cars and houses beyond their needs and means are what gets them into serious financial trouble.  Besides, I always thought you right-wingers loved it when people take "personal responsibility"?  What can be more "responsible" than being sensible with money?

[SVT666]

You don't know very many women, do you? 

The only people I hear complain about gas prices are those driving sedans and compacts.  The truck and SUV drivers I know suck it up.

[Laconian]

It's possible that you know a more affluent class of truck/SUV owner?

It could be that in some areas, the folks that would normally be driving compacts are driving trucks instead.

[hotrodalex]

Comlaining about prices is more connected to economic status than what kind of car you drive.

[GoCougs]

She steered herself.  Have you ever known a woman to listen to a man's advice?  Especially THIS woman, in particular.  Trust me on this one, this chick is in her late 40s and still single for a reason!

As for your "numbers", (30% "more car"? WTF?!?) a Bentley and a Ferrari also have better resale value than a Camry.  Does that mean everyone should sell a kidney just so they can roll in a Continental GT or a 458 Italia?  Consumers overextending themselves buying cars and houses beyond their needs and means are what gets them into serious financial trouble.  Besides, I always thought you right-wingers loved it when people take "personal responsibility"?  What can be more "responsible" than being sensible with money?

Jesus. "Resale" means depreciation, or in particular, % decrease in value from the purchase price, lol not the gross $ value. A Camcord has way better "resale" than any ultra luxury car. It's odd how you claim to be such a maven in personal finance yet don't understand this .

Drive a 28/39/32 mpg $19k Civic LX and then drive a 27/36/30 mpg $22.5K Accord LX. That $3,500 buys a WHOLE pile more refinement, power, comfort, features (notably, the CVT) and size, and if $3,500 makes one "overextending" one has absolutely no business buying a Civic, Accord, or probably a car in general.

[GoCougs]

The only people I hear complain about gas prices are those driving sedans and compacts.  The truck and SUV drivers I know suck it up.

Ditto, and in particular, Priusists. Fact is many don't care about mpg. Just look at the top 10 sellers.

[CJ]

I took out a loan for the Lexus for 4 years.  It'll be paid off by July 2014 if I keep doing what I'm doing. 

[CALL_911]

I took out a loan for the Lexus for 4 years.  It'll be paid off by July 2014 if I keep doing what I'm doing.

You took a 48 month loan out on a 13 year old car?!

[Cookie Monster]

You took a 48 month loan out on a 13 year old car?!

Yeah I'm surprised they let him do that. When I called about car loans it had to be 2006 or newer.

[CJ]

You took a 48 month loan out on a 13 year old car?!

You think I had $7,000 laying around?  I took out an unsecured loan.  Again, it'll be paid off by July 2014. 

[Madman]

Yeah I'm surprised they let him do that. When I called about car loans it had to be 2006 or newer.

I'm surprised, too.  In 1994, I inquired with my bank about financing a five-year-old car and they told me no because it was "too old"! 

[AutobahnSHO]

You think I had $7,000 laying around?  I took out an unsecured loan.  Again, it'll be paid off by July 2014. 

Don't stray from your plan.!   What was the interest rate on that loan?

[Raza]

Don't stray from your plan.!   What was the interest rate on that loan?

I just refinanced my loan on my Z4.  From 4.3 to 1.7. 

[Secret Chimp]

I got a 3 year loan on a 45 year old car. All they cared was that it was still under 105,000 miles.

[CJ]

Don't stray from your plan.!   What was the interest rate on that loan?

4.5%.

[AutobahnSHO]

4.5%.

Not bad at all for an unsecured loan..

[Cookie Monster]

Not bad at all for an unsecured loan..

+1

They were telling me 10-12% for an unsecured loan for me.

[Lebowski]

How about those minivan prices, though?

My god, the sky's the limit on those things! My friend just laid down $40k on a Sienna!

That doesn't seem unreasonable, $40k isn't what it used to be, hell people spend more than that on pickups. $40k for a well equipped minivan sounds about right, and would serve many better than a $40k crossover.

[Cookie Monster]

I don't know, $40k seems like a lot, but I agree that it isn't what it used to be. A Honda Accord V6 Touring is $35k before any other addons (backup sensors, etc) so minivans topping $40k isn't that much.

I remember my dad bought the '98 Accord V6 loaded with everything for $24k out the door. Crazy how much prices have gone up.

[Lebowski]

I don't know, $40k seems like a lot, but I agree that it isn't what it used to be. A Honda Accord V6 Touring is $35k before any other addons (backup sensors, etc) so minivans topping $40k isn't that much.

I remember my dad bought the '98 Accord V6 loaded with everything for $24k out the door. Crazy how much prices have gone up.

$35k accord in '13 vs $24k accord in '98 is only 3% annual inflation, again not bad considering the increased size + content (and things like safety regs) of the newer cars.


Yes, $40k is a lot which is why it's mind boggling to me how many people who don't really have the income to do so choose to buy new cars every ~3 yrs or so.   But my point is if you compare that minivan to reasonably well equipped mid-sized crossovers or SUVs, it's about inline. I paid $40k for my Fjordrunner fwiw.  I plan to keep it 7-8 years or more (from the time I bought it), I feel over that time frame I'm getting a lot of functionality/capability for $40k.

[GoCougs]

The 2013 Accord Touring V6 MSRP is actually $33k, which is equivalent to 2.1% inflation vs. $24k in 1998 . One can argue that the Accord has moved upmarket since '98 and thus use the $30k EX-L V6 as a proxy, which is 1.5% inflation. In short, the Accord actually got cheaper with either comparison.

[Cookie Monster]

The 2013 Accord Touring V6 MSRP is actually $33k, which is equivalent to 2.1% inflation vs. $24k in 1998 . One can argue that the Accord has moved upmarket since '98 and thus use the $30k EX-L V6 as a proxy, which is 1.5% inflation. In short, the Accord actually got cheaper with either comparison.

It's $34k with destination and over $35k out the door without any options. Adding options pushes you up to $38k easily, which just seems like a lot for an Accord, though I agree you do get a lot of car for your money.

[AutobahnSHO]

Yup- much better value as manufacturing and whatnot gets better and better..