I'm refinancing this terrible loan and the bank person grimaced when they saw this.
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.
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.
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.
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.
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.
I was sold a car with a 14% interest rate after being told I wouldnt be charged for interest if I paid it off in the first month, so I could pay it off when my CD popped that week. The bank then told me that I had to wait to pay it off until it "appeared in their systems". Turns out that happened right when interest ticked! Funny how that works
As a non-American it seems wild to me that you would take out a loan for a car.
The so-called "wealth" you see in the American middle-class is mostly just debt. We have the shiniest toys and the biggest houses here, but it's a giant gilded-cage. Most of us die in debt.
how are you buying cars? Because I'm in Europe and they're expensive here too.
You save up and get a second hand car you can afford. Why buy a new one, even a car with 30K miles or 50K KMs is a lot cheaper, while its still new enough to drive for a while without major repairs.
50k km is still "need a loan" territory for most people. The absolute newest car I've owned was 144k km, 3 years old, and still cost near 30k.
Plus when it's like 2% + 6 months euribor for a lease you get to keep at the end, it starts looking hella more attractive.
Now the APR in the OP, that's predatory af.
Where are you that cars are affordable to a point where this is an usual thing?
Yeah, u buy a used one for like 2,000 - 3,000€. Or you lease. But taking on a loan with 16.9% interest would not cross my mind.
If i cant afford a car, then i aint buyin one.
(This post was presented to you by "living in a livable city" Gang)
it's extremely rare to find such a cheap used car. my partner spent $8k on one that lasted a year. also, you might be surprised to learn that driving isn't optional in most of the US - it's literally impossible to live without a car. I live in a suburb. it's several miles of dangerous roads to get to a grocery store. there is no nearby public transit. even large cities like LA were completely designed around cars. zoning and urban planning here completely screwed us.
yes, it sucks, yes I'm aware, yes I'd love to live in a walkable European city with commuter rail and cafes on the street corner, no I don't have a choice.
Buy the car you can afford. If you can't buy it outright or make a significant down payment (20-30%), don't take out a loan, look for a cheaper option. Those interest rates are insane, I'm amazed how anyone would accept them.
We got rid or public transit because of racism so we are totally dependent on driving to go anywhere
Cars are expensive and necessary in areas without good public transit (read: basically everywhere except a couple of areas in specific cities). Most of us don't have a year's salary just sitting in the bank, especially when you're young.
If you need a car to get to work, you'll pay what you have to because the alternative is no job which means no home, no healthcare, and no food.
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.
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.
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 bought a used 2018 Kia Soul about 6 months ago. I love it. Still paying it off, but it's super, super reliable.
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.
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.
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 paid 1k for my shitty pickup in 2018, it's in worse condition than when I got it, and about 100,000 more miles on it.
It's supposedly worth 3500 now. It needs about $300 worth in parts alone to get it into what I would consider a condition worth buying.
I don't understand.
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.
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.
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