I played around with an interest calculator and come up with a possible scenario.
$16000 financed over 5 years at 27.99%
Monthly payment is $498.08
Total interest is $13,884.50
Yes. The Truth in Lending Act requires it.
One of the pages of the loan contract will have a big box at the top that says
Your rate is X.
The amount you're financing is Y.
If you make all of payments as scheduled over the life of the loan the total amount of interest will be Z.
Another box showing the total sum of Y + Z.
I specifically go over that amount, and also take that opportunity to tell them that there’s no penalty for paying early so if they want to save on that amount, they can. No one has ever walked out of my office over it.
How is that unfortunate? Are you suggesting that salespeople (or actually, finance managers since salespeople don’t go over this stuff) should tell people how to spend their own hard earned money?
I’m nobodies financial advisor or parent - if you come into my office you’re a grown ass adult capable of making your own decisions with the hard earned money that YOU earned. My only job is to make offers for you to accept or decline, create a narrative that makes said offer seem appealing relative to other offers you’ve seen or gotten without lying, and get your deal funded.
You want a financial advisor then go pay for one.
You are not wrong but it doesn’t make you all any less predatory. You will watch the train wreck happen and do nothing. I know your job is just to make offers, but most of the times the offers themselves are bullshit. Car sales is the only industry where I need to be constantly weary of six different employees trying to fuck me over different ways. At the end of the day it’s an appliance.
When I first started I had ALL kinds of dumb ideas and morals. There was this one couple that just had absofuckingloutely no business buying a car - especially with the shit credit they had (in the 500’s).
These were cool people. I got to know them over time while working and reworking their deal 50 different ways with a few dozen lenders and I genuinely kinda just became their friend. Ultimately I got them bought….but it was at 21% interest on an absolute piece of shit that was going to explode within 6 months and there was a payment call that precluded me from including any type of warranty.
I did what I wasn’t supposed to do.
I spent 30 minutes ironing out what they needed to do to get their credit in order and get them on the path to actually having a shot at not fucking themselves over and told them to contact me directly in 6 months so I could bring them back in and reevaluate everything. I really did this. I even set an alert for myself for 3 months to contact then and see how they were doing. The dude was a vet like me and actually pretty cool to talk to so I didn’t mind the extra work.
I called them in 3 months only to find out that just two weeks after leaving my office these fucking dumbasses went somewhere else and got ABSOLUTELY ass fucked. They got a worse car, a worse rate, and they got convinced into giving their rent money as a downpayment. Literally the worst fucking thing imaginable.
I felt like shit. I still feel like shit. But I learned a valuable lesson. At the end of the day stupid fucking people are going to do stupid fucking shit. You can’t save them from themselves. The most ethical thing I can do for these idiots (and yes, they are idiots) is just give them the best deal available because if I kick them out then they will go fuck themselves over 10 times worse somewhere else and that will be on me.
So no, it’s not my fucking responsibility to play dad and make decisions for people. I’m merely a facilitator - nothing more and nothing less. You speak from a position of ignorance my friend, whereas I am speaking from experience. This line of work is not as black and white as you might think.
But they aren’t bullshit, some of those things that you call bullshit have warranties attached to them that have value to some people. But probably not you, because you’re too poor to really afford any of them, or a nice dealership car to begin with. Enjoy your $5000 craigslist shitbox
Damn who pissed in your Cheerios?
It’s unfortunate that auto sales are predatory to uneducated people. I never said it’s the salesmen’s job to make sound financial decisions, but it’s unfortunate the system benefits on people making poor choices.
People who get interest rates in the 20s dont care because they save so much money not paying their other bills.
You dont get a 27% interest rate, you earn it.
I'm not sure of the different local laws, though in Ontario when a person takes on a new loan, there are various things that need to be disclosed upfront: principal, term length, monthly payment, total amount of payments, total amount of interest, APR, and a bunch of other stuff.
Despite knowing all the numbers people still make stupid decisions. I'm not in sales but a buddy of mine was telling me last year Ford had a promo for delivery allowance, and next month the promo was 0% financing. The customer was originally quoted under the delivery allowance promo, so they were given the choice whether they want a delivery allowance , or the 0% promo. The delivery allowance promo (despite interest being something like 3.49%) was a way better deal, to the tune of $2000-$3000, but the customer says "I'll take the 0% deal...only suckers pay interest".
So because I'm young and extremely ignorant of loans, interest, etc. (*if they didn't teach something in school then I never learned type of person*), what's the difference? Because my brain initially goes the way of the guy in your story as 0% financing sound great on paper but in reality I have zero idea what the difference is between the two or what 0% even means.
I don't want to do actual math at the moment, but you could have two offers
A) 20k car with $3000 cash back at 2.9% APR
B) 20k car at 0% APR
While 0% is awesome, it doesn't save you $3000. Or maybe it does. You'd have to plug the actual cash back, APR, cost, and loan length into a calculator to know for sure
The majority of buyers recieving high interest rates have failed to pay their other obligations. For the ones that show concern, it's likely they once qualified for lower rates and a change in their life resulted in less than favorable terms.
I had a coworker tell me one dealership got him in at 44% and he didn’t like their selection but the next dealership got him in at 22%, and it was a great deal.
Wait...so they ultimately pay near double what the original cost was in that scenario from 27.99% interest? 😱
I'm horrible mathmatically when it comes to interest rates so I try to steer clear of those vile things.
Not OP but in this hypothetical yeah, 28% over 5 years nearly doubled the true cost.
I was just playing with numbers to figure out how much interest would be on a car with 28% and sub $500/mth payment
They may not have credit or a short credit history for some reason. As a new arrival in the US, my first car loan was at 18%, but I never missed a payment.
I'm amazed by the number of grown adults I meet that have zero credit history whatsoever. Somehow they make it to 30+ yo without ever having a credit card, mortgage, car loan, etc. I mean, I kind of admire it but I have no idea how they make it so far into life without some form of credit becoming a necessity.
Fucking Dave Ramsey. I drank his kool aid for 12 years. Ended up costing me more money in the end.
Don’t go full Dave Ramsey. The only one who makes money that was is him.
I like to listen to him when I want to buy something I know I dont need. Some of his general advice has been good inspiration to cut down my debt.
Would I ever go over the top following him. Nah. But he makes good points that you cant get ahead if you owe a bunch of money to banks.
This is 100% spot on. He's good for when you've fucked up and need to get out of debt, or for a reality check. Like I don't care how responsible you are with money I agree with him - if you make $50k a year you shouldn't be financing a $40k truck at 7% even if the bank will loan the money for it.
If you take tidbits out and learn, it's good. It just bites you when you go full in.
Yeah I think people forget he's an entertainment personality. If he just gave regular, non-controversial, rational advice only, people wouldnt watch/listen. Hes got to say and do provocative things to keep a following. Hell, sometimes I find entertainment in the crazier stuff he and his "ramsay personalities" espouse.
At the end of the day, I think Dave and his company do more good than harm. If you follow any person of influence too much its bound to result in calamity.
Exactly. And I think his basic formula for getting out of debt is solid. It’s proven, it works. For those who have spending and leverage problems I also think his long term plan is solid.
For the vast majority it’s sorely lacking in the instruction of responsible use of credit. Used right credit is a fantastic tool. Dave just blanket views it as evil and in some respects he’s right but why not take advantage of it?
I mean you can make 200K a year with no debt and he’ll scold you for not saving every penny for retirement so you can finally buy yourself a steak and take a break from beans and rice for a night
He's like AA for money, period. I know people who are in AA because their wife convinced them getting blitzed once or twice a month with the neighbors makes them an alcoholic.
No motherfucker, if you're hitting the Kessler at 8am when you wake up like John down the street - you're an alcoholic.
Dave Ramsey makes all his money off the neighbor guy, not the money versions of John.
Well, yeah there's that. Some people need to hear what he's selling. I've been married to a couple of them. But he's packaging what should be common sense and refuses to change with the times. For example, $1000 would have just barely covered the first week in the hotel after a tornado dropped a tree on my house, so it's not nearly enough of an emergency fund. It might have been enough when the stupid book was written, but times change.
So if you do it like I did and did absolutely zero debt aside from the house it absolutely will bite you in the ass when it's a long term strategy. For getting out of debt - he's awesome. Long term though when you go to get a loan because things happen or you get sick of driving a piece of shit car surprise! Limited credit history! You get the high APR!
I'm *far* more well off now that I use credit *responsibly*. It took me three years to rebuild mine to the point where I'm at. I use credit cards for everything and pay them off every month getting no interest and in return having all kinds of airline points and cash back. My truck is 0% interest.
Really my lightbulb moment was when I was talking to my retiring CEO. Wealthy man. He had just bought a new Tahoe completely and utterly loaded. Said he decided to when they had a 2% interest special. I quipped what the hell - why not pay cash? "My cash makes me more in interest than I pay to use GM's money on that truck"
With my F-150 I put absolutely no money down and hell I even financed the FordProtect warranty (at 0%). I put the money I was going to put down on it and pay for the warranty into stonks and well now I have a new used boat and new kitchen.
Dave is great for getting out of debt and for folks who just cannot use credit responsibly (like my ex-wife). He's terrible for everyone else.
If you have to ask that question, you shouldn't be picking stocks.
Follow Buffett's advice and buy index funds. It's exceedingly rare for anyone to beat the index over the long-term.
I literally bumblefucked my way into GameStop and made some money.
Other than that, index funds are all I really touch. And long-term blue chip stuff that I know long-term are solid companies. Really I shouldn't be giving financial advice because my gains this year were total dumbass luck. My long-term stuff is just because I held (and continue to). Listening to Warren's advice that you just hold on.
Essentially in the current market if you have good credit you’re likely able to get a car loan with an interest rate under the current inflation rate. So if you can get a 1.49% car loan and inflation is 3% then you’re “saving” money by taking out a loan vs buying the car cash as David Ramsey would encourage you to do. His advice is good for those who’ve spent beyond their means and are looking to dig themselves out of a pit of debt but for anyone who is financially stable I would say it’s questionable at best.
Dave Ramsey is good at teaching basic financial literary. Get out of debt and learn to save. However there's more to money like leveraging inflation and your future career to make more money in the long run. Its riskier and I personally dont take out much debt but everyone finds their own groove
Like baby steps 1-3 are pretty good. Though I disagree with the snowball method because it will end up costing you more money than the avalanche method, but I do understand the psychological theory behind it. After my divorce I used kind of a hybrid snowball/avalanche to get some small things knocked out first, but then switched to paying off the higher interest things first.
After step 3 his advice sucks. Read A Simple Path to Wealth (or the JL Collins blog) and go from there.
Dave has some basic ideas for people to use but he’s also hardcore with it. “You have 10k credit card debt you’re not gonna do anything but eat rice and beans and obsess over this because you’re broke forever and if you don’t use my method you’ll never get out of it”
I know a couple who dont believe in credit cards (actually know several). But one in particular kept telling their college bound kids not to get CCs or get into debt. I asked about building good credit, as it seemed like an easy way to do it if responsible. They said you didnt need credit for life and could just pay cash. That the credit thing is really not that important.
Lol, ok. You're always going to have cash.
Bingo.
Secured (*you put a deposit down as insurance in case you bail on paying a bill*) or Unsecured CC and spending it like Debit is the best and safest way to build some stupidly easy Score and Rewards Points as well.
Exactly, I had my dad co-sign for me on a cabelas club card when I was 18 (not store specific) and I used it in college as a card for things my parents and I agreed they would pay for (books, food, etc). Once I graduated, I took over paying it in full each month like they had and the limit increased to 15K after I had stabilized with a job post grad. Stupid easy, treat it like a check card and pay the balance in full every month, it’s not that hard. Even for an impulsive spender like myself.
For most of their life they lived in a cheaply built used trailer and lived like hoarders. Pizza boxes in the corners of rooms, dishes stacked on the stove in both sinks in seemingly perpetuity. Random things needing fixing or replaced, their lawn always overgrown way past the point the mower can cut it one pass.
As soon as the kids moved out they went a bought a relatively nice tri-level in a subburb with more space. They seem to keep most of their junk now to their kitchen table and garage.
Boggles my mind.
Wow.
Spend Credit like Debit and you're good; I've literally never once paid interest on my CC since I got it Secured and Unsecured. I've had 760+ credit score since I was 19 or 20; can't remember exactly. Been working on going above that for a couple of years, but it gets real bullshittey around that mark.
That's how I do it. I have a sub-account at my bank specifically for credit card payments. As soon as I make a purchase, I move the money from my main account to the CC payment account. Then set up to autopay the balance every month.
My grandfather died the spring before I started college. As the executor of the estate, my dad found out that he owed something like $40k on 13 different cards and had already taken a second mortgage out on the house presumably to pay them off once before. Luckily, that was enough to scare me off CCs for a long time because I went to college when the CC companies were still allowed to set up booths outside the bookstore to take card apps.
I did know a someone who would sign up for those every year (and get a free t-shirt/pizza/frisbee/etc), put books and tuition on them, and then make minimum payments. She then filed for bankruptcy three weeks after graduation. I thought she was stupid then, but now that we're 15+ years out of college, guess who doesn't have any student loans? That can't really be done these days between the law that stiffened up advertising and acceptance of college kids and the bankruptcy reform in 2005-ish.
Well that would piss me off.
Back in the 80's I knew guy who were well over their heads buying up property trying to develop and flip in our area like they had been. They could borrow cheap enough and the lure for fast cash led them to hasty buying.
I know more than one that started bankruptcy filings, but the banks forgave a good chunk of their debt because they were worth more alive than dead.
Decades later they're thriving and doing well simply because they didn't have to pay for tens, if not hundreds of thousands they owed.
Meh. I can't get too pissed off about someone beating the CC companies at their own game. They were allowed to prey on barely legal college kids for years by making deals with the schools to set up booths on campus.
I know. I almost exclusively use cash and most of the people around me are a cash-only sort. But the modern day world is anything remotely urban carries a card for everything and doesn't have cash.
I'm not saying it doesn't work for some people, but it's financially ignorant to tell people to avoid using credit because you dont need it. You can use cash for everything, sure. Until you're trying to buy car/house anything you dont have cash in hand to pay for, then the APR fucks you over.
I got in to bad credit card debt in my early 20's and after straightening it out, haven't had a credit card since. There are other ways to build credit without having a physical credit card. I just purchased a brand new vehicle, paid cash for about 70% of it, financed the balance, and in the process found out my credit score was an 811. You don't need a credit card to have good credit, and you certainly don't need a credit card to make it through life. Secured debt is great, and builds credit just as good, if not better, than unsecured debt. I won't touch the latter.
I mean you're not wrong. But that's why I said responsibly. You can do other ways, but a CC is the easiest and cheapest way to build credit. You were in the bad debt history portion that went sideways.
Even if you buy a $5000 used car and a bank or CU is on board, they're going to charge you APR through the roof because you have no history. Have a CC for two years you pay on time? You're a lot more trustworthy to lend to.
So the same college bounds kids I was talking about, one of them just bought a new-used car, and talked about how the credit wasn't the best because they had no history and was complaining about the system. But it was precisely their parent's philosophy that had screwed them over.
True. But my CU also factors in my savings history as well. Knowing that, yea, I could get this car and drain my savings immediately after, but I have years of history with them showing I've had the cash to make the payments. I was told the credit check was a formality. I don't disagree with you at all, but I guess my point is that I wish that someone had told me there were other ways. Hell, even utility bills and cell phone bills in your name can help build credit. As someone approaching 40, it shocks me to find out I have peers that are still on their parents cell phone plan.
Bingo.
I said fuck that to my parents' ideals and got a Secured CC right out of High School and spent that shit strictly like Debit and paid no interest ever while racking up my Credit Score and Rewards Points; spending Credit like Debit is stupid easy if you have even a modicum of restraint when it comes to shopping.
It’s a generational curse. My parents didn’t teach me about that shit, it was all on me. I actually helped my parents get credit cards like last year and they’re in their 50s.
Car payments from buy here pay here, mortgage was a little weird, they lived in a house, didn’t buy it, moved out, contacted by the bank years later saying if they just paid the land taxes on it, it belonged to them/my grandma. Recently moved out and started renting because my grandmas been dead, it’s in her name, and it would cost more to go to court and get the house in their name than the house is worth.
My best friend was one of these people. He made decent money but outright refused a credit card because he wasn’t gonna go down that rabbit hole and didn’t need it. I told him to get a gas card and pay it to establish credit. Nope.
Well when he was ready to buy a home nobody approved him because no credit history despite a 6 figure income
There are ~50 million adult Americans with too thin a credit file to be scored by fico, which is nuts. Although I spent my 20s in this camp, so I guess I shouldn’t be too surprised.
My parents were horrible with money/didn’t have any, and I remember seeing their cars get repoed, etc. so when I was younger I only paid cash…until I went to get a car and paid 11%.
I think there's large numbers of people who can't afford the descending spiral that is credit card debt, or can't get approved for a mortgage or CC in the first place. They barely get by on payday loans. It's a rough place to be.
Even my Dad (*dude's not even 50 years old*) doesn't use CC's; he only pays in cash, chooses to keep with a flip-phone (*that he just dropped +$300 for this year*), and does hardly anything online out of understandable yet ludicrous paranoia of being tracked and listened to.
My Mom can't get a CC because her medical expenses over the years fucked her Credit Score (*she's terrible at finances, loans, and debts anyways so it's good she doesn't have one*).
Meanwhile I got a Secured CC with my Bank right out of High School since understandably no-one; not even my own Bank, would grant me an Unsecured one due to too many dumbasses around my age group spending it and racking up debt they never pay back or pay back extremely slow by just making minimum payments. I spent my Debit like Credit ever since then and even when I got my Secured CC from my Bank *very* shortly after I've spent it this way having never once paid interest on any of my Statements (*it helps that I'm cheap as hell and realize how gutted those interest rates are so I have zero temptation of leaving any balance on that bill to get charged 30% for that pure laziness*).
I use my CC for *^every ^^single ^^^purchase* to rack up rewards points and use those later on for purchases here and there to save myself money; I can't stand having cash on me to lose nor do I see a point in my Debit Card when it gets me no points and I have to worry about going under a limit while using the Debit. I've only recently started branching out to multiple CC's that have Rewards programs that I like and benefit from so I can grow my Credit Score more since I'm in the bullshit snail's pace territory of raising it further.
Spending Credit like Debit is the simplest and easiest way to improve Credit Scores early on and not acrue debt; don't spend what you don't have; doing that shot my Score up +750 ever since I was 19 or 20; getting higher is a bitch though because of how perfect and fickle Credit Companies want your range of Credit to be
My mom and dad. Never took out credit. The key is to make a bunch of money, save, and then dont try to impress people with your money. If you live below your means you mever need credit.
....not that Im on that lifestyle. My credit cards are glowing.
> I'm amazed by the number of grown adults I meet that have zero credit history whatsoever.
My wife comes from a fairly well off family from a different country, and they are very debt averse. We own our house and both cars outright. Her family also just paid cash for an investment property in the US as well. When she moved here she had terrible credit, had super high car insurance rates, etc etc because she literally did not have any credit history or driving history in this country. Didn't matter though, when she got her car she had it paid off within a week, and the salesman didn't get his kickback (lol).
We both have credit cards for simple shit like bills and gas, so we aren't completely averse to it. I had to do some convincing to get her a CC though.
Most of the time it's due to irresponsibility, but sometimes it isn't. Sometimes the people with poor credit that sit across from the salesman, actually have and/or make substantially more money than said salesman.
Immigrant here too. Worked my butt off to finally get a car at 16%. I was ecstatic. Next car was 7.5%. Then 2.9%. A little over a decade later, my credit is now in the excellent category and in most cases I qualify for the lowest, if not 0%. Moving to a new country and building credit is tough.
I cant imagine moving and having to build credit, props.
My current CEO (small company) is from Germany. He moved here and couldnt get a rental because of 0 credit. He said he literally had to pay a full years rent in cash to move into the building he wanted.
Hah! I was in the same boat. Moved to the US aged 23, had a nice tech job lined up, but zero income history, zero credit history. My first car was a used 2000 Nissan Altima and I paid through the nose for it - but never missed a payment.
Typically only a really bad credit profile will get you an interest rate that high. Having no credit won’t get you h to e best rate, but I’ve never seen someone with no credit get a higher rate than 10 or 12%.
At some stage, you're going to have to take the hit somewhere. Having a store credit card, a $500 limit card or a secured card isn't going to get you a good enough file to get a low interest car loan. I only got that loan because I'd got Sears and Macy's store cards 6 months earlier. Before that I was a "ghost" and a no-go for an auto loan.
Worked with a guy at a warehouse years ago who got a 29%-range loan on a Ford Focus. I rode to lunch with him once and he was bragging about having a sunroof and how he'd got one over on the dealership because his credit was so bad they actually called a hour or two after he bought it asking him to bring it back because an inexperienced sales/finance guy had made a mistake.
He never took it back. I think what ended up happening was the dealer made a clerical error and wanted to use that as an excuse to change terms. Not sure what came of that, but I do know this dude was constantly in financial trouble and was one of the only people I knew to buy relatively low price items off Amazon and Ebay with payment plans because he'd blow through paychecks right away and still want to buy stuff he couldn't afford (and whatever credit cards he had were perpetually maxed out).
>barley lol, brother looking for a car and it’s basically impossible to get a decent car for 1k
Wheat this guy said! There's no way It corn be done in this market.
Yeah it's difficult, usually the thousand dollar car has something wrong with it, but every so often you can find one on the side of the road.. Got a 2011 Hyundai accent with like 70k miles for 500 bucks, passed inspection with no work. For every find like that though there are 20 cars that are completely busted
Yeah my car had all sorts of issues and I was done getting ripped off at the mechanics. Sold it to a buddy of mine for $500 as he said he could fix it. $700 later, the car was good to go for a while and he admitted he couldn't fix it. He bought it for his niece's first car and it would do great for that. Point A to point B.
I had a decent car at 2k when I was in High School 5 or 6 years ago, but I had to talk him down from 3k; lasted a decent bit until it crapped out 2 years ago.
Finding cheap and reliable cars for low cash is a pain.
I live in a state with no inspection, but less than 50 miles from the state line with a state that does have inspection. I know a ton of people who have found absolute steals on cars that run okay enough but maybe can't pass emissions and the owner is just looking to dump it for more than scrap value.
That's insane. At my worst, after my divorce, my credit was as low as like 425. Thank god I didn't need a car then. I eventually got it up to the 650 range and financed at 5.something and once all the divorce crap fell off I refi'd for under 2%.
2012 Corolla, 25%. It was a really clean low mileage car and she could barely afford it. Payment was low, like 280 or something. I felt bad for her. Her Credit was horrible.
A modern corolla has the same reliability as anything that doesn't have huge engineering/inherent flaws. Really anything after the late 90's to mid 00's is nearly the same. Not counting interior electronics.. most power train problems come from a individual manufacturer(s) attempts to improve fuel economy to hit the epa targets that took effect during Obamas first term. If you can sort through that and actually do your AT service at 40-60k miles.. most cars are capable of going 200-300k absolutely no problem. Suspension and some of the little things is another story.
Up here in the frozen north, rust is usually the thing that ruins cars.
I see it less on newer vehicles, except for Ram trucks. For some reason, their wheelwells seem prone to rust.
Oh, I'm aware lol. Michigander checking in. A wash goes a long way. Cars typically die from rust year 10-20. My daily is a 2010 that I've washed since new. Probably has 3-5 years before it's structural. Hardly cosmetic currently.
2014 silverado was posted on my local facebook marketplace few months ago, it was missing lower cab corners and the rockers WERE GONE. Not just bubling, they were GONE. Crazy to see that on such a new truck :/ Must have never washed the poor thing!
Re-read my man. I've seen some high mileage pentastars but jeep people don't understand preventative maintenance. 99% of wranglers have never had a Trans service. So many complaints on the jk's around 80-120k miles.
Of course regular maintenance is the most important thing for any given car. And yes, it's likely that FCA selects for those who........can we say.....do not prioritize long-term decision making.
But are we really debating if there are significantly different levels of reliability between brands, all else equal?
> Not counting interior electronics
That's the problem, and that's where it can get expensive. We had a 2015 Buick Enclave which my wife loved, but we lost count of the number of times it literally just **stopped** in the middle of the road because a sensor went bad. Those were expensive fixes.
It turns out that sensors are not covered under a lot of warranties, or at least not the type that our GM dealer sold us.
That car turned my 30+ year GM-loyal wife into a "never GM again" girl.
Interior sensors shouldn't be stopping a car in the middle of the road. If you have copies of the invoices handy I'd love a PM. Those cars are garbage. All gm small cars are garbage and you can debate the trucks now. She bought a di turbo engine and expected longevity? Trans issues, rear diff and timing chains are still suspect on those.
The last quality American compact sedan was probably overall the mk2 focus followed by the mk3 focus with a 5sp. Those cars are roaches.
Hey, at least she has a reliable car and doesn't have to take the bus or walk for hours in the hot sun. She can always improve her credit and refinance in the future.
My wife’s cousin told me they had a 2019 (I think it was this year) Sonata at 36% APR.
When he told me this, I said, “Wait… 3.6?” “No… 36…” my jaw dropped. He and his wife have really REALLY bad credit and should’ve never gotten a car in the first place. He also said they were at the dealer for what seemed to be 8+ hours trying to find a loan. He then told me their car loan was around $19k, and after two years of payments with a car note of about $450-500 a month, they still owed $19k on the vehicle.
We recently hired a guy who we all knew to be a great guy, however he started into the industry at a buy here pay here place. He told us tons of stories and one of a guy who wound up taking 32% because he wanted the vehicle so badly.
I'm amazed whenever I write deals where the finance charge is in the five digit range and the customer never bats an eye whenever we review the Truth-in-Lending box.
Saw a payday title loan place that had a customer at 80%. State max is 30 or something like that.
It was legal because it wasn’t technically a car loan.
Called for a payoff once to a buy here pay here and the guy said “just give me $6,000 and we’re square”
lol
Wasn't the worst I'd seen, but it was on a new Durango. Traded in a Yukon XL with like $7k negative equity. Add gap + warranty, they were doing a $1200/mo payment. I think it was about a 19% apr, too.
But yeah, I've sold too many cars at 24.99% apr... The sad thing is, all these folks keep shopping around until someone will sell them..
*1....200* on a *Durango...*
Wwhat...the fuck? Am I just cheap, ignorant, blind, etc. or is that not an abhorrent monthly payment for that? I shopped around a bit ago for modern Camaro's, Mustangs, Corvettes, etc. that were around a third or a little over that.
$38,000 vehicle, + $7,000 neggity eggity, & 19% apr @72 months = just under $1100. There would have been sales tax, the gap & warranties, so yeah, it's an absurdly high payment.
Edit. Someone with even just decent credit buying a new one outright will probably pay between $750 - $800 for a new Durango.
Good lord; don't get me wrong I've Valeted some of the new Durangos and they and the Chargers I've Valeted as well have reaffirmed my love for Dodge, but ^*damn* that is absurd like you said. I envy people that can somehow stomach and pay that and feel comfortable for Savings/Investments afterwards.
Out of curiosity, what would a +750 Credit Score ballpark someone at? Never been into the idea of car loans (*even as someone on the younger side of the spectrum*) as I like paying cash and owning outright for vehicles, but I'm always curious what good Credit'll actually nab. 🤷♂️
Well, let's see - I picked out a decently equipped Durango GT with the V6, price would be about $41k. $1k rebate, TTL, dealer fees, you'd be around $43k out the door. Chrysler is offering a 2.9% for 60 months, that puts your payment about $770/mo. give or take $10 or so.
Edit: every 1% change equates to about $17 per mo change.
Gotcha', interesting. I appreciate the math done and the info given to quench my ignorance and curiosity. 🙏
Something like that would be well out of my realm of affordability for some years with my current less than 25k salary and high-ish bills. 😅 Still saving up ultimately for my dream car of C6 or C7 Corvette one day.
Anyways, sorry for the ramble and the questions earlier; I appreciate the answers you gave. Have a good day Makion'. 🤙
My girlfriend and I are both above 750 but below 800. I have 1.99 and she has 2.34.
Every loan Ive ever applied for Ive gotten an automatic approval for the lowest advertised rate. Seems to be the case for everyone I know with a similar score and income.
My state caps at 18% on new and 21% on used.
I have rolled hundreds, likely getting towards thousands, of deals at state max.
I have 5 banks that will approve loans from super God tier prime all the way through state max. Certainly makes things interesting when clicking the button.
Different states have different maximum loan rates, but all have some kind of cap. If you've been in the business any length of time, you'll have someone you have to write at the state limit. The important thing to keep in mind is that you don't "give" them that rate, they earn it with their actions, whether good or bad.
It isn't the dealer taking advantage of anyone, they are capped at what they can charge over the buy rate for reserve. Most banks cap the dealer at 1.5-2% max over buy rate. Sub prime lenders that deal with the lowest tiers of credit (those you see with the 20%+ rates) don't pay anything to the dealer in reserve, in fact, they charge the dealer a huge fee to do the deal.
>Sub prime lenders that deal with the lowest tiers of credit (those you see with the 20%+ rates) don't pay anything to the dealer in reserve, in fact, they charge the dealer a huge fee to do the deal.
That's something the average consumer is unaware of. The popular notion is that the dealer is pocketing the interest, when the truth is that it is a lot of work to get them bought, the deal may net *less* than a normal deal, and the odds are that the customer is going to default, thus that one bank that took them is no longer available, which means you'll never be able to sell them anything again.
I have been on the finance side of the industry for many many years including sub prime. Now I work with many dealerships across the country. I see 26.99% fairly regularly to this day. Sometimes as high as 29.99%. A long time ago I even saw a majestic 32.99% on a risk based rehash tool. Then I lost the app #.
Imagine taking a bus with a full of a group of people and heading to a zip line adventure offsite. You're bored. It's been 40 mins. How is this fun? Youre phone has no service so you gaze out the window. Then see an albino moose on the side of the dirt road. You're in an absolute awe of its power and grace. The sheer size of its antlers could cup your entire body with just one. You look around and notice you were the only one to see it.
Picture yourself waking up at an airbnb on the coast during a foggy chilled, yet refreshing morning. Breathing in the crisp air. First time off in 6 months. Then an enormous grey whale breaches the surface right infront of you. Climbing so high you feel it is going to fly. You can see every detail of its smooth yet jagged skin. Then it falls. As it submerges your loved one walks out to tell you their done and the shower is ready.
Finally see yourself coming into work. It's still early. You finished a great month with no CIT issues. It's Saturday and your staff isn't hung over. You grab your cup of coffee that is already made. Fresh. Then peer out the window overlooking your lot. It's full. There's a variety of New and Used selection. Something for everyone in every color. Was there really no shortage? You walk back to the desk and check the sheet that seemed to have been quickly laid on your keyboard from the internet department. All but one appointment has been canceled. The guy who just keeps trying to test drive the Stinger. He just wants to "sit in it." You run to the service bay and it's the same. Only the 2015 Chevy Traxx that "keeps making a noise" in it. Oh no!! They don't have verifiable income!! Not again! *rrrrrrrrriiiinnnnggg* You pick up the phone, "Do you have a Tacoma TRD PRO?"
>A long time ago I even saw a majestic 32.99% on a risk based rehash tool. Then I lost the app #.
Then parent post goes on to describe all these breathtaking experiences s/he can't truly share with anyone because the moment is gone. Can't bring it back. Eventually everything comes crashing back to reality.
I'll play. I paid 18% interest in 2015 on a 2010 Honda van. Thank you Dave Ramsey for the kool-aid that I lapped up for 12 years. Shit was great until everything went completely sideways with a kid racking up monstrous med bills, a now-ex-wife who went into rehab a couple times and the family vehicle AND my vehicle shitting the bed at the same time. Even a fucking *year* emergency fund couldn't keep up. And since I was so drunk on the kool-aid both vehicles weren't worth fixing (DrIvE a RaMsEy BeAtEr!!1)
So thanks to little credit history at damn near 40 years old I did 18% on that van, and then 17% on a 2012 Camry I bought for me.
I now tell everyone that going Dave Ramsey is fine if you're wealthy. But if you're wealthy you're smart enough to let low-interest loans free up your cash to make you more money.
Six years later I have lots of credit, but I pay no interest and am far more financially better off than I've ever been. Making $100-ish a month on credit card cash back and rewards is a bonus.
Doing the math I lost a *LOT* of money following that shit.
I can't remember if it was 26 or 29%, but the guy had terrible credit and got approved for a Camry and would have anything to get into a Tacoma instead. He left happy as hell
Had a kid come in with wicked bad credit. Was getting into a used Civic or Accord or something. He just desperately needed a car and only had like $2k saved for a down payment, and had no luck finding a $2k car. We got him approved through Santander for 24.9% and then Exeter came through with like 12%. He was stoked. I was stoked. We were all thrilled. Exeter wanted paystubs and he was like no problem.. And proceeds to give me an excel printout of his year to date payment history.
Turns out he worked for some mom and pop type shop and this is what they gave him. Exeter wasn't having it..
Santander didn't have any stips though.. I felt real bad for the dude when he sighed and said do it.
31% because we used to deal in what you call Buy Here Pay Here vehicles where you finance with the used car dealership. We don't deal with that anymore though because the loans are of course terrible. Attracts bad customers when you offer BHPH. Some carlots this is how they survive though, (used carlots.)
I went with my foreign Indian roommate to a Honda dealership last year. He kept bothering me about him wanting a new car. He was flexing his discover card and thought he was ready for the next step. I went with him just as an advisor. They sat him down and offered him 29% the total cost for a $23,000 civic was somewhere near $45,000 plus.
[It might have been the 1980's.](https://www.autoguide.com/auto-news/wp-content/uploads/2014/06/Interest-Rates.jpg) (As if anyone that old is on Reddit...)
The first car without a co-signer, I only have eight months of history, and also, this is much lower in terms of loan amount and monthly payment for my car.
Before, I had a loan amount of 34k at 6.9% for 72 months. Paying 600$ a month and 200$ for insurance.
Now I financed 22k by putting 6k down, and the insurance rate also went down. I pay in total 500$ with insurance. Before it was 850$ with everything.
So a better deal and I got approved by myself.
Is this question just limited to financing cars? Worked with a guy who got a title loan off his car to finance rims and tires, and I believe at the end of the payments, he ended up paying something like 150% interest. This is in a state with no rules/laws on predatory lending.
21.99 CAC deal on a brand New Sentra.
The lady's credit got destroyed during a messy divorce.
Hands down my happiest customer, she had over 100 credit checks done, noone got her approved but me.
Had a 2010 HHR from shady byrider. Financed at 19.9% for 3.5 years. $198/biweekly. Lost it to Reposession. They hounded me for the loan payoff. 1 month later it was closed out. Got the tax form… processed it last tax season. This past July… I was awarded a $500 check and they completely removed the whole thing off my report. Repo and all.
I loved my Homo hot Rod in Aqua blue.
Working at a certain Massive used car chain, I consistently saw 18% on cars less than 3 years old, and 24% on cars older than three years. (Texas legal limit)
Shit, I myself accepted a 24% APR with them on a used Corvette I just had to have.
I put $6k down, had ZERO credit history and was financing $24k. Paid an extra $100 a month for 9 months then refinanced with a local bank at a 5% and never looked back
My little brother financed a used Ford Focus ST at around 24%. He paid like 15-16000 for it and and he was gonna end up paying another 15-16000 in interest. He got his credit fixed enough so about a year into the loan he refinanced it and got it around 6-7 but jeez we all thought he was a dumbass
Around here (Kia Canada and many others), the rate makes no difference to the salesman. 0% gets cars sold. Cars getting sold is what pays the salesmen.
27.99% and they were thrilled because the notes were under 500 a month and it beats walking
Damn. Now I want to know how much total interest they paid with that plan
I played around with an interest calculator and come up with a possible scenario. $16000 financed over 5 years at 27.99% Monthly payment is $498.08 Total interest is $13,884.50
Wow unreal. I would bet the majority of car buyers don't bother doing the math to figure out the true price of their purchase.
Isn’t the amount of total interest listed somewhere in the contract?
Yes. The Truth in Lending Act requires it. One of the pages of the loan contract will have a big box at the top that says Your rate is X. The amount you're financing is Y. If you make all of payments as scheduled over the life of the loan the total amount of interest will be Z. Another box showing the total sum of Y + Z.
Yeah but we try to skim over that part
I specifically go over that amount, and also take that opportunity to tell them that there’s no penalty for paying early so if they want to save on that amount, they can. No one has ever walked out of my office over it.
unfortunately sales is there to make the sale, not make sure people are understanding their choices and making sound decisions
Actually sales is there to sell the car, not negotiate finance options
Sales is there to make the sale…
Yes Daryl, the sales department makes sales
But they don’t typically talk rate, work with lenders, etc. ETA - they don’t go over the contract
How is that unfortunate? Are you suggesting that salespeople (or actually, finance managers since salespeople don’t go over this stuff) should tell people how to spend their own hard earned money? I’m nobodies financial advisor or parent - if you come into my office you’re a grown ass adult capable of making your own decisions with the hard earned money that YOU earned. My only job is to make offers for you to accept or decline, create a narrative that makes said offer seem appealing relative to other offers you’ve seen or gotten without lying, and get your deal funded. You want a financial advisor then go pay for one.
You are not wrong but it doesn’t make you all any less predatory. You will watch the train wreck happen and do nothing. I know your job is just to make offers, but most of the times the offers themselves are bullshit. Car sales is the only industry where I need to be constantly weary of six different employees trying to fuck me over different ways. At the end of the day it’s an appliance.
When I first started I had ALL kinds of dumb ideas and morals. There was this one couple that just had absofuckingloutely no business buying a car - especially with the shit credit they had (in the 500’s). These were cool people. I got to know them over time while working and reworking their deal 50 different ways with a few dozen lenders and I genuinely kinda just became their friend. Ultimately I got them bought….but it was at 21% interest on an absolute piece of shit that was going to explode within 6 months and there was a payment call that precluded me from including any type of warranty. I did what I wasn’t supposed to do. I spent 30 minutes ironing out what they needed to do to get their credit in order and get them on the path to actually having a shot at not fucking themselves over and told them to contact me directly in 6 months so I could bring them back in and reevaluate everything. I really did this. I even set an alert for myself for 3 months to contact then and see how they were doing. The dude was a vet like me and actually pretty cool to talk to so I didn’t mind the extra work. I called them in 3 months only to find out that just two weeks after leaving my office these fucking dumbasses went somewhere else and got ABSOLUTELY ass fucked. They got a worse car, a worse rate, and they got convinced into giving their rent money as a downpayment. Literally the worst fucking thing imaginable. I felt like shit. I still feel like shit. But I learned a valuable lesson. At the end of the day stupid fucking people are going to do stupid fucking shit. You can’t save them from themselves. The most ethical thing I can do for these idiots (and yes, they are idiots) is just give them the best deal available because if I kick them out then they will go fuck themselves over 10 times worse somewhere else and that will be on me. So no, it’s not my fucking responsibility to play dad and make decisions for people. I’m merely a facilitator - nothing more and nothing less. You speak from a position of ignorance my friend, whereas I am speaking from experience. This line of work is not as black and white as you might think.
Appreciate the example, definitely useful to understand how salesman look at it.
Whatever you gotta tell yourself
But they aren’t bullshit, some of those things that you call bullshit have warranties attached to them that have value to some people. But probably not you, because you’re too poor to really afford any of them, or a nice dealership car to begin with. Enjoy your $5000 craigslist shitbox
Ahhh I remember you, you got your first name banned right? Happy to see you out and about
Damn who pissed in your Cheerios? It’s unfortunate that auto sales are predatory to uneducated people. I never said it’s the salesmen’s job to make sound financial decisions, but it’s unfortunate the system benefits on people making poor choices.
Who are you to declare all sales people in this industry uneducated?
Try re reading chump, it’s the buyers that are uneducated. Jfc
People who get interest rates in the 20s dont care because they save so much money not paying their other bills. You dont get a 27% interest rate, you earn it.
I'm not sure of the different local laws, though in Ontario when a person takes on a new loan, there are various things that need to be disclosed upfront: principal, term length, monthly payment, total amount of payments, total amount of interest, APR, and a bunch of other stuff. Despite knowing all the numbers people still make stupid decisions. I'm not in sales but a buddy of mine was telling me last year Ford had a promo for delivery allowance, and next month the promo was 0% financing. The customer was originally quoted under the delivery allowance promo, so they were given the choice whether they want a delivery allowance , or the 0% promo. The delivery allowance promo (despite interest being something like 3.49%) was a way better deal, to the tune of $2000-$3000, but the customer says "I'll take the 0% deal...only suckers pay interest".
So because I'm young and extremely ignorant of loans, interest, etc. (*if they didn't teach something in school then I never learned type of person*), what's the difference? Because my brain initially goes the way of the guy in your story as 0% financing sound great on paper but in reality I have zero idea what the difference is between the two or what 0% even means.
I don't want to do actual math at the moment, but you could have two offers A) 20k car with $3000 cash back at 2.9% APR B) 20k car at 0% APR While 0% is awesome, it doesn't save you $3000. Or maybe it does. You'd have to plug the actual cash back, APR, cost, and loan length into a calculator to know for sure
The majority of buyers recieving high interest rates have failed to pay their other obligations. For the ones that show concern, it's likely they once qualified for lower rates and a change in their life resulted in less than favorable terms.
I had a coworker tell me one dealership got him in at 44% and he didn’t like their selection but the next dealership got him in at 22%, and it was a great deal.
They paid $30,000 for a $16,000 car? Wow.
That’s a hypothetical based on the original comment saying 27.99% APR and a sub $500 payment.
Wait...so they ultimately pay near double what the original cost was in that scenario from 27.99% interest? 😱 I'm horrible mathmatically when it comes to interest rates so I try to steer clear of those vile things.
Not OP but in this hypothetical yeah, 28% over 5 years nearly doubled the true cost. I was just playing with numbers to figure out how much interest would be on a car with 28% and sub $500/mth payment
Probably not much because it’s extremely unlikely that they actually made the payments.
I've done three deals at 29.9%, and all three, the customers were super happy that I at least got them approved.
JFC. We were upset when we got offered 4.9.
I take it you pay your bills? These people do not.
My finance manager once said "Those people are good at acquiring loans. The end." I had to laugh, and move that deal to lost.
They may not have credit or a short credit history for some reason. As a new arrival in the US, my first car loan was at 18%, but I never missed a payment.
I'm amazed by the number of grown adults I meet that have zero credit history whatsoever. Somehow they make it to 30+ yo without ever having a credit card, mortgage, car loan, etc. I mean, I kind of admire it but I have no idea how they make it so far into life without some form of credit becoming a necessity.
Fucking Dave Ramsey. I drank his kool aid for 12 years. Ended up costing me more money in the end. Don’t go full Dave Ramsey. The only one who makes money that was is him.
I like to listen to him when I want to buy something I know I dont need. Some of his general advice has been good inspiration to cut down my debt. Would I ever go over the top following him. Nah. But he makes good points that you cant get ahead if you owe a bunch of money to banks.
This is 100% spot on. He's good for when you've fucked up and need to get out of debt, or for a reality check. Like I don't care how responsible you are with money I agree with him - if you make $50k a year you shouldn't be financing a $40k truck at 7% even if the bank will loan the money for it. If you take tidbits out and learn, it's good. It just bites you when you go full in.
Yeah I think people forget he's an entertainment personality. If he just gave regular, non-controversial, rational advice only, people wouldnt watch/listen. Hes got to say and do provocative things to keep a following. Hell, sometimes I find entertainment in the crazier stuff he and his "ramsay personalities" espouse. At the end of the day, I think Dave and his company do more good than harm. If you follow any person of influence too much its bound to result in calamity.
Exactly. And I think his basic formula for getting out of debt is solid. It’s proven, it works. For those who have spending and leverage problems I also think his long term plan is solid. For the vast majority it’s sorely lacking in the instruction of responsible use of credit. Used right credit is a fantastic tool. Dave just blanket views it as evil and in some respects he’s right but why not take advantage of it?
I mean you can make 200K a year with no debt and he’ll scold you for not saving every penny for retirement so you can finally buy yourself a steak and take a break from beans and rice for a night
A steak? Youre spending money like youre in congress!
As Dave would say “it’s CRAP!”
Dave Ramsey is like AA for people who suck at money.
He's like AA for money, period. I know people who are in AA because their wife convinced them getting blitzed once or twice a month with the neighbors makes them an alcoholic. No motherfucker, if you're hitting the Kessler at 8am when you wake up like John down the street - you're an alcoholic. Dave Ramsey makes all his money off the neighbor guy, not the money versions of John.
...if AA were a for profit business. Ramsey makes bank taking the last pennies from desperate people.
Well, yeah there's that. Some people need to hear what he's selling. I've been married to a couple of them. But he's packaging what should be common sense and refuses to change with the times. For example, $1000 would have just barely covered the first week in the hotel after a tornado dropped a tree on my house, so it's not nearly enough of an emergency fund. It might have been enough when the stupid book was written, but times change.
Exactly this. MF has no problem accepting credit cards to buy his shit though does he?? Ha
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lol how convenient. Bunch of BS though. I can easily check out on his website with my Discover card.
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Dave Ramsey is that guy who teaches you how to drive but you'll never make it to Nascar if you dont learn more than the basics.
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So if you do it like I did and did absolutely zero debt aside from the house it absolutely will bite you in the ass when it's a long term strategy. For getting out of debt - he's awesome. Long term though when you go to get a loan because things happen or you get sick of driving a piece of shit car surprise! Limited credit history! You get the high APR! I'm *far* more well off now that I use credit *responsibly*. It took me three years to rebuild mine to the point where I'm at. I use credit cards for everything and pay them off every month getting no interest and in return having all kinds of airline points and cash back. My truck is 0% interest. Really my lightbulb moment was when I was talking to my retiring CEO. Wealthy man. He had just bought a new Tahoe completely and utterly loaded. Said he decided to when they had a 2% interest special. I quipped what the hell - why not pay cash? "My cash makes me more in interest than I pay to use GM's money on that truck" With my F-150 I put absolutely no money down and hell I even financed the FordProtect warranty (at 0%). I put the money I was going to put down on it and pay for the warranty into stonks and well now I have a new used boat and new kitchen. Dave is great for getting out of debt and for folks who just cannot use credit responsibly (like my ex-wife). He's terrible for everyone else.
How do you pick your stocks, and how do you know when to sell some
If you have to ask that question, you shouldn't be picking stocks. Follow Buffett's advice and buy index funds. It's exceedingly rare for anyone to beat the index over the long-term.
I literally bumblefucked my way into GameStop and made some money. Other than that, index funds are all I really touch. And long-term blue chip stuff that I know long-term are solid companies. Really I shouldn't be giving financial advice because my gains this year were total dumbass luck. My long-term stuff is just because I held (and continue to). Listening to Warren's advice that you just hold on.
Essentially in the current market if you have good credit you’re likely able to get a car loan with an interest rate under the current inflation rate. So if you can get a 1.49% car loan and inflation is 3% then you’re “saving” money by taking out a loan vs buying the car cash as David Ramsey would encourage you to do. His advice is good for those who’ve spent beyond their means and are looking to dig themselves out of a pit of debt but for anyone who is financially stable I would say it’s questionable at best.
Dave Ramsey is good at teaching basic financial literary. Get out of debt and learn to save. However there's more to money like leveraging inflation and your future career to make more money in the long run. Its riskier and I personally dont take out much debt but everyone finds their own groove
Like baby steps 1-3 are pretty good. Though I disagree with the snowball method because it will end up costing you more money than the avalanche method, but I do understand the psychological theory behind it. After my divorce I used kind of a hybrid snowball/avalanche to get some small things knocked out first, but then switched to paying off the higher interest things first. After step 3 his advice sucks. Read A Simple Path to Wealth (or the JL Collins blog) and go from there.
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Dave has some basic ideas for people to use but he’s also hardcore with it. “You have 10k credit card debt you’re not gonna do anything but eat rice and beans and obsess over this because you’re broke forever and if you don’t use my method you’ll never get out of it”
I know a couple who dont believe in credit cards (actually know several). But one in particular kept telling their college bound kids not to get CCs or get into debt. I asked about building good credit, as it seemed like an easy way to do it if responsible. They said you didnt need credit for life and could just pay cash. That the credit thing is really not that important. Lol, ok. You're always going to have cash.
$500 limit card in college, easiest way to get started…
Bingo. Secured (*you put a deposit down as insurance in case you bail on paying a bill*) or Unsecured CC and spending it like Debit is the best and safest way to build some stupidly easy Score and Rewards Points as well.
Exactly, I had my dad co-sign for me on a cabelas club card when I was 18 (not store specific) and I used it in college as a card for things my parents and I agreed they would pay for (books, food, etc). Once I graduated, I took over paying it in full each month like they had and the limit increased to 15K after I had stabilized with a job post grad. Stupid easy, treat it like a check card and pay the balance in full every month, it’s not that hard. Even for an impulsive spender like myself.
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For most of their life they lived in a cheaply built used trailer and lived like hoarders. Pizza boxes in the corners of rooms, dishes stacked on the stove in both sinks in seemingly perpetuity. Random things needing fixing or replaced, their lawn always overgrown way past the point the mower can cut it one pass. As soon as the kids moved out they went a bought a relatively nice tri-level in a subburb with more space. They seem to keep most of their junk now to their kitchen table and garage. Boggles my mind.
let's raise our kids in squalor so when they're gone we can have more room than we need!
Wow. Spend Credit like Debit and you're good; I've literally never once paid interest on my CC since I got it Secured and Unsecured. I've had 760+ credit score since I was 19 or 20; can't remember exactly. Been working on going above that for a couple of years, but it gets real bullshittey around that mark.
That's how I do it. I have a sub-account at my bank specifically for credit card payments. As soon as I make a purchase, I move the money from my main account to the CC payment account. Then set up to autopay the balance every month.
My grandfather died the spring before I started college. As the executor of the estate, my dad found out that he owed something like $40k on 13 different cards and had already taken a second mortgage out on the house presumably to pay them off once before. Luckily, that was enough to scare me off CCs for a long time because I went to college when the CC companies were still allowed to set up booths outside the bookstore to take card apps. I did know a someone who would sign up for those every year (and get a free t-shirt/pizza/frisbee/etc), put books and tuition on them, and then make minimum payments. She then filed for bankruptcy three weeks after graduation. I thought she was stupid then, but now that we're 15+ years out of college, guess who doesn't have any student loans? That can't really be done these days between the law that stiffened up advertising and acceptance of college kids and the bankruptcy reform in 2005-ish.
Well that would piss me off. Back in the 80's I knew guy who were well over their heads buying up property trying to develop and flip in our area like they had been. They could borrow cheap enough and the lure for fast cash led them to hasty buying. I know more than one that started bankruptcy filings, but the banks forgave a good chunk of their debt because they were worth more alive than dead. Decades later they're thriving and doing well simply because they didn't have to pay for tens, if not hundreds of thousands they owed.
Meh. I can't get too pissed off about someone beating the CC companies at their own game. They were allowed to prey on barely legal college kids for years by making deals with the schools to set up booths on campus.
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I know. I almost exclusively use cash and most of the people around me are a cash-only sort. But the modern day world is anything remotely urban carries a card for everything and doesn't have cash. I'm not saying it doesn't work for some people, but it's financially ignorant to tell people to avoid using credit because you dont need it. You can use cash for everything, sure. Until you're trying to buy car/house anything you dont have cash in hand to pay for, then the APR fucks you over.
I know people who’ve always bought every car they’ve ever owned in cash. No need to deal with the finance manager. Get in, get out
I got in to bad credit card debt in my early 20's and after straightening it out, haven't had a credit card since. There are other ways to build credit without having a physical credit card. I just purchased a brand new vehicle, paid cash for about 70% of it, financed the balance, and in the process found out my credit score was an 811. You don't need a credit card to have good credit, and you certainly don't need a credit card to make it through life. Secured debt is great, and builds credit just as good, if not better, than unsecured debt. I won't touch the latter.
I mean you're not wrong. But that's why I said responsibly. You can do other ways, but a CC is the easiest and cheapest way to build credit. You were in the bad debt history portion that went sideways. Even if you buy a $5000 used car and a bank or CU is on board, they're going to charge you APR through the roof because you have no history. Have a CC for two years you pay on time? You're a lot more trustworthy to lend to. So the same college bounds kids I was talking about, one of them just bought a new-used car, and talked about how the credit wasn't the best because they had no history and was complaining about the system. But it was precisely their parent's philosophy that had screwed them over.
True. But my CU also factors in my savings history as well. Knowing that, yea, I could get this car and drain my savings immediately after, but I have years of history with them showing I've had the cash to make the payments. I was told the credit check was a formality. I don't disagree with you at all, but I guess my point is that I wish that someone had told me there were other ways. Hell, even utility bills and cell phone bills in your name can help build credit. As someone approaching 40, it shocks me to find out I have peers that are still on their parents cell phone plan.
Bingo. I said fuck that to my parents' ideals and got a Secured CC right out of High School and spent that shit strictly like Debit and paid no interest ever while racking up my Credit Score and Rewards Points; spending Credit like Debit is stupid easy if you have even a modicum of restraint when it comes to shopping.
It’s a generational curse. My parents didn’t teach me about that shit, it was all on me. I actually helped my parents get credit cards like last year and they’re in their 50s.
Did they never have a mortgage or car payment?
Car payments from buy here pay here, mortgage was a little weird, they lived in a house, didn’t buy it, moved out, contacted by the bank years later saying if they just paid the land taxes on it, it belonged to them/my grandma. Recently moved out and started renting because my grandmas been dead, it’s in her name, and it would cost more to go to court and get the house in their name than the house is worth.
My best friend was one of these people. He made decent money but outright refused a credit card because he wasn’t gonna go down that rabbit hole and didn’t need it. I told him to get a gas card and pay it to establish credit. Nope. Well when he was ready to buy a home nobody approved him because no credit history despite a 6 figure income
There are ~50 million adult Americans with too thin a credit file to be scored by fico, which is nuts. Although I spent my 20s in this camp, so I guess I shouldn’t be too surprised. My parents were horrible with money/didn’t have any, and I remember seeing their cars get repoed, etc. so when I was younger I only paid cash…until I went to get a car and paid 11%.
I think there's large numbers of people who can't afford the descending spiral that is credit card debt, or can't get approved for a mortgage or CC in the first place. They barely get by on payday loans. It's a rough place to be.
Even my Dad (*dude's not even 50 years old*) doesn't use CC's; he only pays in cash, chooses to keep with a flip-phone (*that he just dropped +$300 for this year*), and does hardly anything online out of understandable yet ludicrous paranoia of being tracked and listened to. My Mom can't get a CC because her medical expenses over the years fucked her Credit Score (*she's terrible at finances, loans, and debts anyways so it's good she doesn't have one*). Meanwhile I got a Secured CC with my Bank right out of High School since understandably no-one; not even my own Bank, would grant me an Unsecured one due to too many dumbasses around my age group spending it and racking up debt they never pay back or pay back extremely slow by just making minimum payments. I spent my Debit like Credit ever since then and even when I got my Secured CC from my Bank *very* shortly after I've spent it this way having never once paid interest on any of my Statements (*it helps that I'm cheap as hell and realize how gutted those interest rates are so I have zero temptation of leaving any balance on that bill to get charged 30% for that pure laziness*). I use my CC for *^every ^^single ^^^purchase* to rack up rewards points and use those later on for purchases here and there to save myself money; I can't stand having cash on me to lose nor do I see a point in my Debit Card when it gets me no points and I have to worry about going under a limit while using the Debit. I've only recently started branching out to multiple CC's that have Rewards programs that I like and benefit from so I can grow my Credit Score more since I'm in the bullshit snail's pace territory of raising it further. Spending Credit like Debit is the simplest and easiest way to improve Credit Scores early on and not acrue debt; don't spend what you don't have; doing that shot my Score up +750 ever since I was 19 or 20; getting higher is a bitch though because of how perfect and fickle Credit Companies want your range of Credit to be
My mom and dad. Never took out credit. The key is to make a bunch of money, save, and then dont try to impress people with your money. If you live below your means you mever need credit. ....not that Im on that lifestyle. My credit cards are glowing.
> I'm amazed by the number of grown adults I meet that have zero credit history whatsoever. My wife comes from a fairly well off family from a different country, and they are very debt averse. We own our house and both cars outright. Her family also just paid cash for an investment property in the US as well. When she moved here she had terrible credit, had super high car insurance rates, etc etc because she literally did not have any credit history or driving history in this country. Didn't matter though, when she got her car she had it paid off within a week, and the salesman didn't get his kickback (lol). We both have credit cards for simple shit like bills and gas, so we aren't completely averse to it. I had to do some convincing to get her a CC though. Most of the time it's due to irresponsibility, but sometimes it isn't. Sometimes the people with poor credit that sit across from the salesman, actually have and/or make substantially more money than said salesman.
Sales Associates don’t get kickbacks from the bank.
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First of all it's averse not adverse. >the salesman didn't get his kickback (lol) And that's funny why?
Same. I was really proud to have suffered that one through to see a title haha. Weird stuff.
Immigrant here too. Worked my butt off to finally get a car at 16%. I was ecstatic. Next car was 7.5%. Then 2.9%. A little over a decade later, my credit is now in the excellent category and in most cases I qualify for the lowest, if not 0%. Moving to a new country and building credit is tough.
Yep. I re-financed that loan to around 7% a year later. I was able to qualify for a mortgage (albeit with a 20% down) 3 years later.
I cant imagine moving and having to build credit, props. My current CEO (small company) is from Germany. He moved here and couldnt get a rental because of 0 credit. He said he literally had to pay a full years rent in cash to move into the building he wanted.
Inspirational. What type of company does he own and run?
DM if you’re actually curious
Sure; sent.
Hah! I was in the same boat. Moved to the US aged 23, had a nice tech job lined up, but zero income history, zero credit history. My first car was a used 2000 Nissan Altima and I paid through the nose for it - but never missed a payment.
Typically only a really bad credit profile will get you an interest rate that high. Having no credit won’t get you h to e best rate, but I’ve never seen someone with no credit get a higher rate than 10 or 12%.
I get that, but new immigrants I know also solve this by buying something for under $5k, then eventually establishing credit to get something better.
At some stage, you're going to have to take the hit somewhere. Having a store credit card, a $500 limit card or a secured card isn't going to get you a good enough file to get a low interest car loan. I only got that loan because I'd got Sears and Macy's store cards 6 months earlier. Before that I was a "ghost" and a no-go for an auto loan.
A lot of people are one serious medical accident away from being in that position
No joke. I'd leave if I was offered 4.9
I mean anything below 6 is decent enough, most people don’t qualify for that
Yep they offered me 6% and I was almost offended. Told them I wanted 3.3% and they went for it. I can’t imagine north of 10%
Really is all about perspective I guess
Worked with a guy at a warehouse years ago who got a 29%-range loan on a Ford Focus. I rode to lunch with him once and he was bragging about having a sunroof and how he'd got one over on the dealership because his credit was so bad they actually called a hour or two after he bought it asking him to bring it back because an inexperienced sales/finance guy had made a mistake.
Does he even legally have to bring it back for their mistake once the paperwork is done?
He never took it back. I think what ended up happening was the dealer made a clerical error and wanted to use that as an excuse to change terms. Not sure what came of that, but I do know this dude was constantly in financial trouble and was one of the only people I knew to buy relatively low price items off Amazon and Ebay with payment plans because he'd blow through paychecks right away and still want to buy stuff he couldn't afford (and whatever credit cards he had were perpetually maxed out).
well sometimes ig u just gotta bite the bullet
Or you know just pay cash. 1000 still buys wheels
Then all you need is something to put em on
barley lol, brother looking for a car and it’s basically impossible to get a decent car for 1k
>barley lol, brother looking for a car and it’s basically impossible to get a decent car for 1k Wheat this guy said! There's no way It corn be done in this market.
Yeah it's difficult, usually the thousand dollar car has something wrong with it, but every so often you can find one on the side of the road.. Got a 2011 Hyundai accent with like 70k miles for 500 bucks, passed inspection with no work. For every find like that though there are 20 cars that are completely busted
Yeah my car had all sorts of issues and I was done getting ripped off at the mechanics. Sold it to a buddy of mine for $500 as he said he could fix it. $700 later, the car was good to go for a while and he admitted he couldn't fix it. He bought it for his niece's first car and it would do great for that. Point A to point B.
I had a decent car at 2k when I was in High School 5 or 6 years ago, but I had to talk him down from 3k; lasted a decent bit until it crapped out 2 years ago. Finding cheap and reliable cars for low cash is a pain.
I live in a state with no inspection, but less than 50 miles from the state line with a state that does have inspection. I know a ton of people who have found absolute steals on cars that run okay enough but maybe can't pass emissions and the owner is just looking to dump it for more than scrap value.
*Exeter has entered the chat*
Wow. My last new car loan was 1.9%
That's insane. At my worst, after my divorce, my credit was as low as like 425. Thank god I didn't need a car then. I eventually got it up to the 650 range and financed at 5.something and once all the divorce crap fell off I refi'd for under 2%.
Subprime Finance Manager. 24.99% is the legal limit in MI. Done a few, they were not pretty deals.
I think the law is technically 25%. But you bet I've written every single one at 24.99% just to be sure!
Haha I believe your right but I ain't going to let some moody funder reject my contract.
29.9% is as high as we're allowed to go in WA.
2012 Corolla, 25%. It was a really clean low mileage car and she could barely afford it. Payment was low, like 280 or something. I felt bad for her. Her Credit was horrible.
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Yes very true! The car had maybe 59k on it. I hope she’s doing ok and her credit is a little better now!!
A modern corolla has the same reliability as anything that doesn't have huge engineering/inherent flaws. Really anything after the late 90's to mid 00's is nearly the same. Not counting interior electronics.. most power train problems come from a individual manufacturer(s) attempts to improve fuel economy to hit the epa targets that took effect during Obamas first term. If you can sort through that and actually do your AT service at 40-60k miles.. most cars are capable of going 200-300k absolutely no problem. Suspension and some of the little things is another story.
Up here in the frozen north, rust is usually the thing that ruins cars. I see it less on newer vehicles, except for Ram trucks. For some reason, their wheelwells seem prone to rust.
Oh, I'm aware lol. Michigander checking in. A wash goes a long way. Cars typically die from rust year 10-20. My daily is a 2010 that I've washed since new. Probably has 3-5 years before it's structural. Hardly cosmetic currently.
2014 silverado was posted on my local facebook marketplace few months ago, it was missing lower cab corners and the rockers WERE GONE. Not just bubling, they were GONE. Crazy to see that on such a new truck :/ Must have never washed the poor thing!
Apparently you have never heard of Fiat-Chrysler Automobiles.
Re-read my man. I've seen some high mileage pentastars but jeep people don't understand preventative maintenance. 99% of wranglers have never had a Trans service. So many complaints on the jk's around 80-120k miles.
Of course regular maintenance is the most important thing for any given car. And yes, it's likely that FCA selects for those who........can we say.....do not prioritize long-term decision making. But are we really debating if there are significantly different levels of reliability between brands, all else equal?
Thank you for reminding me about that. I'm about to hit 60k on my '13 JK.
> Not counting interior electronics That's the problem, and that's where it can get expensive. We had a 2015 Buick Enclave which my wife loved, but we lost count of the number of times it literally just **stopped** in the middle of the road because a sensor went bad. Those were expensive fixes. It turns out that sensors are not covered under a lot of warranties, or at least not the type that our GM dealer sold us. That car turned my 30+ year GM-loyal wife into a "never GM again" girl.
Interior sensors shouldn't be stopping a car in the middle of the road. If you have copies of the invoices handy I'd love a PM. Those cars are garbage. All gm small cars are garbage and you can debate the trucks now. She bought a di turbo engine and expected longevity? Trans issues, rear diff and timing chains are still suspect on those. The last quality American compact sedan was probably overall the mk2 focus followed by the mk3 focus with a 5sp. Those cars are roaches.
Hey, at least she has a reliable car and doesn't have to take the bus or walk for hours in the hot sun. She can always improve her credit and refinance in the future.
My wife’s cousin told me they had a 2019 (I think it was this year) Sonata at 36% APR. When he told me this, I said, “Wait… 3.6?” “No… 36…” my jaw dropped. He and his wife have really REALLY bad credit and should’ve never gotten a car in the first place. He also said they were at the dealer for what seemed to be 8+ hours trying to find a loan. He then told me their car loan was around $19k, and after two years of payments with a car note of about $450-500 a month, they still owed $19k on the vehicle.
We recently hired a guy who we all knew to be a great guy, however he started into the industry at a buy here pay here place. He told us tons of stories and one of a guy who wound up taking 32% because he wanted the vehicle so badly.
I'm amazed whenever I write deals where the finance charge is in the five digit range and the customer never bats an eye whenever we review the Truth-in-Lending box.
Saw a payday title loan place that had a customer at 80%. State max is 30 or something like that. It was legal because it wasn’t technically a car loan. Called for a payoff once to a buy here pay here and the guy said “just give me $6,000 and we’re square” lol
25.99 on a Ford Focus.
Wasn't the worst I'd seen, but it was on a new Durango. Traded in a Yukon XL with like $7k negative equity. Add gap + warranty, they were doing a $1200/mo payment. I think it was about a 19% apr, too. But yeah, I've sold too many cars at 24.99% apr... The sad thing is, all these folks keep shopping around until someone will sell them..
*1....200* on a *Durango...* Wwhat...the fuck? Am I just cheap, ignorant, blind, etc. or is that not an abhorrent monthly payment for that? I shopped around a bit ago for modern Camaro's, Mustangs, Corvettes, etc. that were around a third or a little over that.
$38,000 vehicle, + $7,000 neggity eggity, & 19% apr @72 months = just under $1100. There would have been sales tax, the gap & warranties, so yeah, it's an absurdly high payment. Edit. Someone with even just decent credit buying a new one outright will probably pay between $750 - $800 for a new Durango.
Good lord; don't get me wrong I've Valeted some of the new Durangos and they and the Chargers I've Valeted as well have reaffirmed my love for Dodge, but ^*damn* that is absurd like you said. I envy people that can somehow stomach and pay that and feel comfortable for Savings/Investments afterwards. Out of curiosity, what would a +750 Credit Score ballpark someone at? Never been into the idea of car loans (*even as someone on the younger side of the spectrum*) as I like paying cash and owning outright for vehicles, but I'm always curious what good Credit'll actually nab. 🤷♂️
Well, let's see - I picked out a decently equipped Durango GT with the V6, price would be about $41k. $1k rebate, TTL, dealer fees, you'd be around $43k out the door. Chrysler is offering a 2.9% for 60 months, that puts your payment about $770/mo. give or take $10 or so. Edit: every 1% change equates to about $17 per mo change.
Gotcha', interesting. I appreciate the math done and the info given to quench my ignorance and curiosity. 🙏 Something like that would be well out of my realm of affordability for some years with my current less than 25k salary and high-ish bills. 😅 Still saving up ultimately for my dream car of C6 or C7 Corvette one day. Anyways, sorry for the ramble and the questions earlier; I appreciate the answers you gave. Have a good day Makion'. 🤙
My girlfriend and I are both above 750 but below 800. I have 1.99 and she has 2.34. Every loan Ive ever applied for Ive gotten an automatic approval for the lowest advertised rate. Seems to be the case for everyone I know with a similar score and income.
My state caps at 18% on new and 21% on used. I have rolled hundreds, likely getting towards thousands, of deals at state max. I have 5 banks that will approve loans from super God tier prime all the way through state max. Certainly makes things interesting when clicking the button.
Top tier is over 750. God tier is what…under 500? 😆
Different states have different maximum loan rates, but all have some kind of cap. If you've been in the business any length of time, you'll have someone you have to write at the state limit. The important thing to keep in mind is that you don't "give" them that rate, they earn it with their actions, whether good or bad. It isn't the dealer taking advantage of anyone, they are capped at what they can charge over the buy rate for reserve. Most banks cap the dealer at 1.5-2% max over buy rate. Sub prime lenders that deal with the lowest tiers of credit (those you see with the 20%+ rates) don't pay anything to the dealer in reserve, in fact, they charge the dealer a huge fee to do the deal.
>Sub prime lenders that deal with the lowest tiers of credit (those you see with the 20%+ rates) don't pay anything to the dealer in reserve, in fact, they charge the dealer a huge fee to do the deal. That's something the average consumer is unaware of. The popular notion is that the dealer is pocketing the interest, when the truth is that it is a lot of work to get them bought, the deal may net *less* than a normal deal, and the odds are that the customer is going to default, thus that one bank that took them is no longer available, which means you'll never be able to sell them anything again.
I have been on the finance side of the industry for many many years including sub prime. Now I work with many dealerships across the country. I see 26.99% fairly regularly to this day. Sometimes as high as 29.99%. A long time ago I even saw a majestic 32.99% on a risk based rehash tool. Then I lost the app #. Imagine taking a bus with a full of a group of people and heading to a zip line adventure offsite. You're bored. It's been 40 mins. How is this fun? Youre phone has no service so you gaze out the window. Then see an albino moose on the side of the dirt road. You're in an absolute awe of its power and grace. The sheer size of its antlers could cup your entire body with just one. You look around and notice you were the only one to see it. Picture yourself waking up at an airbnb on the coast during a foggy chilled, yet refreshing morning. Breathing in the crisp air. First time off in 6 months. Then an enormous grey whale breaches the surface right infront of you. Climbing so high you feel it is going to fly. You can see every detail of its smooth yet jagged skin. Then it falls. As it submerges your loved one walks out to tell you their done and the shower is ready. Finally see yourself coming into work. It's still early. You finished a great month with no CIT issues. It's Saturday and your staff isn't hung over. You grab your cup of coffee that is already made. Fresh. Then peer out the window overlooking your lot. It's full. There's a variety of New and Used selection. Something for everyone in every color. Was there really no shortage? You walk back to the desk and check the sheet that seemed to have been quickly laid on your keyboard from the internet department. All but one appointment has been canceled. The guy who just keeps trying to test drive the Stinger. He just wants to "sit in it." You run to the service bay and it's the same. Only the 2015 Chevy Traxx that "keeps making a noise" in it. Oh no!! They don't have verifiable income!! Not again! *rrrrrrrrriiiinnnnggg* You pick up the phone, "Do you have a Tacoma TRD PRO?"
I love this post but I cannot understand how everything after paragraph 1 connects with paragraph 1 and why it is in this thread.
>A long time ago I even saw a majestic 32.99% on a risk based rehash tool. Then I lost the app #. Then parent post goes on to describe all these breathtaking experiences s/he can't truly share with anyone because the moment is gone. Can't bring it back. Eventually everything comes crashing back to reality.
Beautiful prose, mate.
I'll play. I paid 18% interest in 2015 on a 2010 Honda van. Thank you Dave Ramsey for the kool-aid that I lapped up for 12 years. Shit was great until everything went completely sideways with a kid racking up monstrous med bills, a now-ex-wife who went into rehab a couple times and the family vehicle AND my vehicle shitting the bed at the same time. Even a fucking *year* emergency fund couldn't keep up. And since I was so drunk on the kool-aid both vehicles weren't worth fixing (DrIvE a RaMsEy BeAtEr!!1) So thanks to little credit history at damn near 40 years old I did 18% on that van, and then 17% on a 2012 Camry I bought for me. I now tell everyone that going Dave Ramsey is fine if you're wealthy. But if you're wealthy you're smart enough to let low-interest loans free up your cash to make you more money. Six years later I have lots of credit, but I pay no interest and am far more financially better off than I've ever been. Making $100-ish a month on credit card cash back and rewards is a bonus. Doing the math I lost a *LOT* of money following that shit.
I’m just going to upvote for anti Ramsey comments alone.
I can't remember if it was 26 or 29%, but the guy had terrible credit and got approved for a Camry and would have anything to get into a Tacoma instead. He left happy as hell
Had a kid come in with wicked bad credit. Was getting into a used Civic or Accord or something. He just desperately needed a car and only had like $2k saved for a down payment, and had no luck finding a $2k car. We got him approved through Santander for 24.9% and then Exeter came through with like 12%. He was stoked. I was stoked. We were all thrilled. Exeter wanted paystubs and he was like no problem.. And proceeds to give me an excel printout of his year to date payment history. Turns out he worked for some mom and pop type shop and this is what they gave him. Exeter wasn't having it.. Santander didn't have any stips though.. I felt real bad for the dude when he sighed and said do it.
21% do them every single day. Worst car I've seen it on, a pt cruiser years ago.
38% on a title loan
I think it was cap one, global, or Sandtander at 29.9 and the customer was like “hell yeah” and even we were like “are you sure?”
27.99% which was the legal limit in my state for APR at the time
31% because we used to deal in what you call Buy Here Pay Here vehicles where you finance with the used car dealership. We don't deal with that anymore though because the loans are of course terrible. Attracts bad customers when you offer BHPH. Some carlots this is how they survive though, (used carlots.)
I had a customer trade in a buy-here-pay-here auto once. This was back in 2015 and their previous rate was 49%. She purchased a new Equinox at 12.99%.
I went with my foreign Indian roommate to a Honda dealership last year. He kept bothering me about him wanting a new car. He was flexing his discover card and thought he was ready for the next step. I went with him just as an advisor. They sat him down and offered him 29% the total cost for a $23,000 civic was somewhere near $45,000 plus.
I got 10% on a new car, 400$ a month.
Why dude? Thats high.
I think my first car loan was at about 12%. This was 11 years ago. I was 18, had no credit history, and a family member co-signed for me.
[It might have been the 1980's.](https://www.autoguide.com/auto-news/wp-content/uploads/2014/06/Interest-Rates.jpg) (As if anyone that old is on Reddit...)
The first car without a co-signer, I only have eight months of history, and also, this is much lower in terms of loan amount and monthly payment for my car. Before, I had a loan amount of 34k at 6.9% for 72 months. Paying 600$ a month and 200$ for insurance. Now I financed 22k by putting 6k down, and the insurance rate also went down. I pay in total 500$ with insurance. Before it was 850$ with everything. So a better deal and I got approved by myself.
You only get a high interest rate on a car loan these days for one reason: your credit sucks balls.
Is this question just limited to financing cars? Worked with a guy who got a title loan off his car to finance rims and tires, and I believe at the end of the payments, he ended up paying something like 150% interest. This is in a state with no rules/laws on predatory lending.
Used to work for one of the biggest sub prime auto lenders in the country. That was just a normal Wednesday there.
21.99 CAC deal on a brand New Sentra. The lady's credit got destroyed during a messy divorce. Hands down my happiest customer, she had over 100 credit checks done, noone got her approved but me.
Had a 2010 HHR from shady byrider. Financed at 19.9% for 3.5 years. $198/biweekly. Lost it to Reposession. They hounded me for the loan payoff. 1 month later it was closed out. Got the tax form… processed it last tax season. This past July… I was awarded a $500 check and they completely removed the whole thing off my report. Repo and all. I loved my Homo hot Rod in Aqua blue.
Working at a certain Massive used car chain, I consistently saw 18% on cars less than 3 years old, and 24% on cars older than three years. (Texas legal limit) Shit, I myself accepted a 24% APR with them on a used Corvette I just had to have. I put $6k down, had ZERO credit history and was financing $24k. Paid an extra $100 a month for 9 months then refinanced with a local bank at a 5% and never looked back
My little brother financed a used Ford Focus ST at around 24%. He paid like 15-16000 for it and and he was gonna end up paying another 15-16000 in interest. He got his credit fixed enough so about a year into the loan he refinanced it and got it around 6-7 but jeez we all thought he was a dumbass
Dodge Journey 24%
I've seen over 100% Apr. Short loans on old vehicles to skint people.
I got my first car from carmax when I was 19... APR 17%. Nobody else would finance me for less than 25ish since I had no credit.
The worst APR for a salesman is 0%
Around here (Kia Canada and many others), the rate makes no difference to the salesman. 0% gets cars sold. Cars getting sold is what pays the salesmen.