A record 7 million Americans are 3 months behind on their car payments

[Trill Clinton]

A record 7 million Americans are 90 days or more behind on their auto loan payments, the Federal Reserve Bank of New York reported Tuesday, even more than during the wake of the financial crisis.

Economists warn that this is a red flag. Despite the strong economy and low unemployment rate, many Americans are struggling to pay their bills.

https://www.washingtonpost.com/business/2019/02/12/record-million-americans-are-months-behind-their-car-payments-red-flag-economy/?utm_term=.7ab0465b2f94

[Trill Clinton]

I know this doesn't affect ST posters but gotdayum.

[FrostKing]

Living in a metropolitan area and needing to own an automobile is at best poor/lazy city planning and at worst a deliberate scam by industry.

[hater]

The “strong evconomy” is mostly bullshit inflated with the fake Stock Market runs. They are all artificial and a facade.

22 trillion debt is a killer and now many big markets are dumping the dollar (china, india, etc)

Shit is about to hit the fan you jigas better save your stocks

[CosmicCowboy]

Serves them right. The majors (Ford, GM, etc.) Basically got into second chance financing for people with shitty credit just to sell more new cars. People buying cars that cost twice their annual income and financing it for 7 years is just dumb for the buyer and the lender.

[CosmicCowboy]

The “strong evconomy” is mostly bullshit inflated with the fake Stock Market runs. They are all artificial and a facade.

22 trillion debt is a killer and now many big markets are dumping the dollar (china, india, etc)

Shit is about to hit the fan you jigas better save your stocks

I know San Antonio has been kicking ass. Lots of money getting spent.

[Chucho]

The “strong evconomy” is mostly bullshit inflated with the fake Stock Market runs. They are all artificial and a facade.

22 trillion debt is a killer and now many big markets are dumping the dollar (china, india, etc)

Shit is about to hit the fan you jigas better save your stocks


If the shit is going to hit the fan and the economy is going to tank, wouldn't you want to get your money out the market and into something more stable?

[spurraider21]

i dont think i would ever finance a car tbh. my wife and i are still driving our respective first cars (05 camry and 08 civic). im by no means "all in" when it comes to dave ramsey stuff, but one thing i agree with him on is his stance on vehicles.

if we end up having to move across the country, we'll probably just dump the camry, or give it to her parents or something... maybe drive the civic across and buy a used car over there.

[Chucho]

i dont think i would ever finance a car tbh. my wife and i are still driving our respective first cars (05 camry and 08 civic). im by no means "all in" when it comes to dave ramsey stuff, but one thing i agree with him on is his stance on vehicles


Exactly. If you can manage not to be in debt with a car, do it. I've put myself in the perpetual "new vehicle before 90,000 miles" cycle I've been in since moving here as I have a fear of getting too far into a car life cycle and then going from car payments to car repair and maintenance bills.

[CosmicCowboy]

i dont think i would ever finance a car tbh. my wife and i are still driving our respective first cars (05 camry and 08 civic). im by no means "all in" when it comes to dave ramsey stuff, but one thing i agree with him on is his stance on vehicles

That's smart. I don't buy personal vehicles new, but do certified used and pay cash. I do buy new vehicles for work and finance for 4 years for tax reasons.

[FrostKing]

If one commutes 30-1hr to work each day (not uncommon in America), I sympathize with prioritizing a luxury car.

Personally a few years ago I foresaw myself living car free as my sister does in Berlin. If they need a car for transporting objects then they borrow friends car or rent q car thru simple pick up/drop off street service (think bikes/scooters in America)

[hater]

If the shit is going to hit the fan and the economy is going to tank, wouldn't you want to get your money out the market and into something more stable?

Yeah thats what I meant tbqh

My bad I meant save your stock money by taking it to safer markets

[hater]

I financed a 40k bimmer a while ago. Yeah its dumb but I was single and had steady work.

Nowadays I drive a 97 lexus as Im not single thus dont need the bimmer anymore :lol

But its crazy to think there are retards out there with family and kids and 2 financed cars with a $600/month payment :lmao

[spurraider21]

That's smart. I don't buy personal vehicles new, but do certified used and pay cash. I do buy new vehicles for work and finance for 4 years for tax reasons.
i'm not totally against buying new cars. i just think its a luxury, and not something that should be the default choice. leasing is absurd unless you have good, specific reason to do so (ie you know you will live in a certain area for ~3 years and dont want to drag an old car with you)

when our student loans are cleared and we have a paid off house, yeah we'll probably get new cars at that point, provided we can make a cash purchase

[CosmicCowboy]

i'm not totally against buying new cars. i just think its a luxury, and not something that should be the default choice. leasing is absurd unless you have good, specific reason to do so (ie you know you will live in a certain area for ~3 years and dont want to drag an old car with you)

when our student loans are cleared and we have a paid off house, yeah we'll probably get new cars at that point, provided we can make a cash purchase

New cars are fine if you can pay cash. The nice part of getting certified used is they are usually returned lease cars so low miles, totally checked out, with a warranty, and half the cost of new. I keep them 2-3 years and the flip them into a new certified used. I do Mercedes SUVs for the wife and they don't lose that much value from being 3 years old with 25,000 miles and 6 years old with 60,000 miles.

[spurraider21]

New cars are fine if you can pay cash. The nice part of getting certified used is they are usually returned lease cars so low miles, totally checked out, with a warranty, and half the cost of new.
yeah certified used is great. your car's rate of depreciation is at its highest usually in the first few years until ~30k miles or so, so you avoid that. you know it won't be a lemon (or some janky new model that had recalls), you can still drive it for nearly a decade. like you said, you know it's been looked after/maintained

downside is that for all you know some disgusting sex occurred in the car tbh :lol

[hater]

Dont get me wrong its smart to finance part of a car as rates are very low

But anything over 300/month payment is nuts unless you have 1 million in the bank

[koriwhat]

A record 7 million Americans are 90 days or more behind on their auto loan payments, the Federal Reserve Bank of New York reported Tuesday, even more than during the wake of the financial crisis.

Economists warn that this is a red flag. Despite the strong economy and low unemployment rate, many Americans are struggling to pay their bills.

https://www.washingtonpost.com/business/2019/02/12/record-million-americans-are-months-behind-their-car-payments-red-flag-economy/?utm_term=.7ab0465b2f94

tell that to all the of the hood tbh.


I know this doesn't affect ST posters but gotdayum.

not i; paid my car off the day i drove it off the lot. fuck car payments!

[DarrinS]

i dont think i would ever finance a car tbh. my wife and i are still driving our respective first cars (05 camry and 08 civic). im by no means "all in" when it comes to dave ramsey stuff, but one thing i agree with him on is his stance on vehicles.

if we end up having to move across the country, we'll probably just dump the camry, or give it to her parents or something... maybe drive the civic across and buy a used car over there.


:tu

[spurraider21]

:tu
as an aside, i was always amused when fellow law students would ask me when i was getting a new car, as if i was in some dire situation with mine... or "when you pass the bar will you get a new car" :lol... silly people

[MultiTroll]

New cars are fine if you can pay cash. The nice part of getting certified used is they are usually returned lease cars so low miles, totally checked out, with a warranty, and half the cost of new. I keep them 2-3 years and the flip them into a new certified used. I do Mercedes SUVs for the wife and they don't lose that much value from being 3 years old with 25,000 miles and 6 years old with 60,000 miles.
A great read and site.
I am confident you will get it and like the site. Whether it fits your timing or not, another story. Among the site, click on "Latest deals" and scroll down to see some of the ish that is shared on the site. Pickups too, just scroll back.
For real, we've done it twice:

www.leasehackr.com (http://www.leasehackr.com)

[DarrinS]

as an aside, i was always amused when fellow law students would ask me when i was getting a new car, as if i was in some dire situation with mine... or "when you pass the bar will you get a new car" :lol... silly people

I bought three used vehicles cash. Gently used Lexus, Toyota, and Honda. Total < 30k.

[BD24]

Had to buy the wife a new car here recently. Unfourtanetly the transmission crapped out on her car, luckily we are pretty good with our money and just bought her new car in cash. I remember the dealership kept trying to get us to finance :lol

my car is paid off, but approaching the 100k mike market. Hoping it will last me to at least 150k if possible

[spurraider21]

Had to buy the wife a new car here recently. Unfourtanetly the transmission crapped out on her car, luckily we are pretty good with our money and just bought her new car in cash. I remember the dealership kept trying to get us to finance :lol

my car is paid off, but approaching the 100k mike market. Hoping it will last me to at least 150k if possible
what car you driving? jap cars like toyotas/hondas should get you to 200k unless you just ignore maintenance.

i'd consider it a failure if i ever own a car that doesn't reach 200k miles tbh. just ride that puppy and when you begin to have legit concerns that reliability has been compromised, just dump it off to a charity, get a small write-off, and get another.

[DarrinS]

If the gas mileage didn't suck so bad, I'd seriously consider an old Land Cruiser. That vehicle has epic reliability.

[DarrinS]

I may just get an old Tundra and give my 04 4Runner to my son.

[AaronY]

Just buy a good used car instead. Car value depreciates like drastically right when you drive off the lot. Stupid buying a new car unless you're financially secure

[Chris]

People are making bad financial decisions? Americans who are taught to consume with profligacy, victims of a public education system with an overbearing Federal Government and Department of Education. Useful idiot repeaters making bad financial decisions? Once they turn off the welfare spigot for the nation's net drain freeloaders we will see some really bad financial decisions. The Trump administration may have saved the Millenial from certain doom and indentured servitude to what Hillary had planned for our great nation. Thank God for that.

[midnightpulp]

People are making bad financial decisions? Americans who are taught to consume with profligacy, victims of a public education system with an overbearing Federal Government and Department of Education. Useful idiot repeaters making bad financial decisions? Once they turn off the welfare spigot for the nation's net drain freeloaders we will see some really bad financial decisions. The Trump administration may have saved the Millenial from certain doom and indentured servitude to what Hillary had planned for our great nation. Thank God for that.

Doubt they'll ever cut military spending.

[Xevious]

Had to buy the wife a new car here recently. Unfourtanetly the transmission crapped out on her car, luckily we are pretty good with our money and just bought her new car in cash. I remember the dealership kept trying to get us to finance :lol
Of course. Dealerships make their money from financing and extended warranties, not the vehicles themselves.

So many millennials today are drowning in student loan debt. Add a $600 car payment on top of that and you're one job loss or one medical event away from being completely fucked.

[DMC]

A record 7 million people shouldn't have qualified for an auto loan.

[DMC]

People are making bad financial decisions? Americans who are taught to consume with profligacy, victims of a public education system with an overbearing Federal Government and Department of Education. Useful idiot repeaters making bad financial decisions? Once they turn off the welfare spigot for the nation's net drain freeloaders we will see some really bad financial decisions. The Trump administration may have saved the Millenial from certain doom and indentured servitude to what Hillary had planned for our great nation. Thank God for that.

YOLO bitches! Where's my iPhone 12?

[boutons_deux]

Of course. Dealerships make their money from financing and extended warranties, not the vehicles themselves.



https://www.edmunds.com/car-buying/where-does-the-car-dealer-make-money.html

[hater]

A record 7 million people shouldn't have qualified for an auto loan.

Its an american dream to be able to make 35% of your income into a car payment. Fuck it its an american right!

[Will Hunting]

What happened to the mortgage industry 10 years ago is going to happen to the consumer lending/auto lending industry in the next 10. Securitization has made it easy for lenders like GM Financial to make a dogshit subprime auto loan that’s off the books less than a week later.

The part that still doesn’t make sense to me is why there’s a securitization market for these loans at all. Who the fuck wants to buy the risk that someone who makes $40k a year and has a sub-600 FICO score will keep making the payments on his BMW?

[BD24]

what car you driving? jap cars like toyotas/hondas should get you to 200k unless you just ignore maintenance.

i'd consider it a failure if i ever own a car that doesn't reach 200k miles tbh. just ride that puppy and when you begin to have legit concerns that reliability has been compromised, just dump it off to a charity, get a small write-off, and get another.
Chevy Malibu, so American made unfortunately. Next car is most likely going to be a Camry or corrola. I have had far to many issues with this car for the amount of miles tbh. American made cars are pretty garbage, bought it right when I got out of college because it was cheaper than a Camry. Wish I could go back and redo that tbh

[Brazil]

I don't own a car.. fortunate enough my company is paying one for me and change it every three year tbh... :lol

[SpursforSix]

Of course. Dealerships make their money from financing and extended warranties, not the vehicles themselves.

So many millennials today are drowning in student loan debt. Add a $600 car payment on top of that and you're one job loss or one medical event away from being completely fucked.

Don't forget the service on the car. And now, with the automatic notifications, it seems like there's always something telling you to go in to do something. And every time you go in, they'll suggest a couple of other things you need to do.
And charge 50% more than a local repair shop.

[spurraider21]

Don't forget the service on the car. And now, with the automatic notifications, it seems like there's always something telling you to go in to do something. And every time you go in, they'll suggest a couple of other things you need to do.
And charge 50% more than a local repair shop.
i would never go to a dealership unless my car was under warranty

[Xevious]

https://www.edmunds.com/car-buying/where-does-the-car-dealer-make-money.html
Aw yes, the service department also.

[Xevious]

What happened to the mortgage industry 10 years ago is going to happen to the consumer lending/auto lending industry in the next 10. Securitization has made it easy for lenders like GM Financial to make a dogshit subprime auto loan that’s off the books less than a week later.

The part that still doesn’t make sense to me is why there’s a securitization market for these loans at all. Who the fuck wants to buy the risk that someone who makes $40k a year and has a sub-600 FICO score will keep making the payments on his BMW?
I've wondered that myself. When you give somebody an auto loan for ~15% interest with negative equity rolled in... you must be counting on the fact that the car is going to get repossessed at some point and the borrower is going to get sued.

[ducks]

My 2 cars paid off
And motorcycle

[Will Hunting]

I've wondered that myself. When you give somebody an auto loan for ~15% interest with negative equity rolled in... you must be counting on the fact that the car is going to get repossessed at some point and the borrower is going to get sued.
I don’t think that’s the angle because there’s billions in trash consumer debt that gets bought in the securitization market when that debt has no collateral and is junior to almost everything else in terms of who gets paid should the borrower declare bankruptcy.

I think it’s very similar to the early 2000s where we have too much money chasing speculative investments and the result is a failure to accurately price risk.

[DMC]

I don’t think that’s the angle because there’s billions in trash consumer debt that gets bought in the securitization market when that debt has no collateral and is junior to almost everything else in terms of who gets paid should the borrower declare bankruptcy.

I think it’s very similar to the early 2000s where we have too much money chasing speculative investments and the result is a failure to accurately price risk.

I was going to say that.

[florige]

That's smart. I don't buy personal vehicles new, but do certified used and pay cash. I do buy new vehicles for work and finance for 4 years for tax reasons.


It's like a tax write off or something like that right? My former boss used to do the same thing.

[Pavlov]

A lot of these people will ditch their cars when the Uber/Lyft driverless fleets roll out.

[resistanze]

It's been almost 4 years without a car. May switch jobs and trying everything possible still not to buy one (there are carpool apps). The cost of even a used beater with a parking spot would be barely worth it tbh

[DMC]

Its an american dream to be able to make 35% of your income into a car payment. Fuck it its an american right!

Every American deserves a new home and a new car, free healthcare and funds even if they can't work or don't even want to work. This is 'Murica goddamn it.

[DarrinS]

A lot of these people will ditch their cars when the Uber/Lyft driverless fleets roll out.

Fuck that

[rmt]

I don’t think that’s the angle because there’s billions in trash consumer debt that gets bought in the securitization market when that debt has no collateral and is junior to almost everything else in terms of who gets paid should the borrower declare bankruptcy.

I think it’s very similar to the early 2000s where we have too much money chasing speculative investments and the result is a failure to accurately price risk.

The whole credit/loan business is upside down. Dd has a good job, no car loan, no student loan, no mortgage and has a room mate - yet they turned her down for a credit card (was only authorized user on my cc previously). She had to get a secured cc - unlike STUDENTS (not yet working fulltime) with car payment and student loans who have no problem getting cc.

[baseline bum]

The whole credit/loan business is upside down. Dd has a good job, no car loan, no student loan, no mortgage and has a room mate - yet they turned her down for a credit card (was only authorized user on my cc previously). She had to get a secured cc - unlike STUDENTS (not yet working fulltime) with car payment and student loans who have no problem getting cc.

cool story bro

[Xevious]

The whole credit/loan business is upside down. Dd has a good job, no car loan, no student loan, no mortgage and has a room mate - yet they turned her down for a credit card (was only authorized user on my cc previously). She had to get a secured cc - unlike STUDENTS (not yet working fulltime) with car payment and student loans who have no problem getting cc.
Bullshit. Most banks will issue credit cards to dogs and dead people.

[Pavlov]

Fuck thatYou're old. I'm not talking about you.

[CosmicCowboy]

Bullshit. Most banks will issue credit cards to dogs and dead people.

She is correct. CC companies don't like applicants with zero credit history. I had my kids get sears credit cards in their name (easiest card to get) when they were in high school and make a few purchases that I paid off on time so they could establish credit history.

[Will Hunting]

The whole credit/loan business is upside down. Dd has a good job, no car loan, no student loan, no mortgage and has a room mate - yet they turned her down for a credit card (was only authorized user on my cc previously). She had to get a secured cc - unlike STUDENTS (not yet working fulltime) with car payment and student loans who have no problem getting cc.
I don’t necessarily disagree but I wasn’t talking about that, I was talking about securitization and the fact that subprime auto loans are easier to make when the lender has their risk of its balance sheet less than a week later.

To your point though, it seems like FICO score matters a lot more than it should and income doesn’t matter as much as it should on stuff like credit card applications and auto loans. It also makes no sense to me that someone in their 20s with no credit history has more trouble getting a credit card than someone with extensive but bad credit history. My deadbeat uncle has a personal bankruptcy from less than 5 years ago where 100k of credit card debt was wiped out and he openly brags about being able to get credit cards that he has no intention of paying off.

[boutons_deux]

A lot of these people will ditch their cars when the Uber/Lyft driverless fleets roll out.

the driverless cars on demand is several, maybe many, years away.

[rmt]

I don’t necessarily disagree but I wasn’t talking about that, I was talking about securitization and the fact that subprime auto loans are easier to make when the lender has their risk of its balance sheet less than a week later.

To your point though, it seems like FICO score matters a lot more than it should and income doesn’t matter as much as it should on stuff like credit card applications and auto loans. It also makes no sense to me that someone in their 20s with no credit history has more trouble getting a credit card than someone with extensive but bad credit history. My deadbeat uncle has a personal bankruptcy from less than 5 years ago where 100k of credit card debt was wiped out and he openly brags about being able to get credit cards that he has no intention of paying off.

Her FICO score is fine - in the 700s - it's that she has no credit history in her own name - as an authorized user under my cc (she had her own number), it was reported but specified as under another user. I didn't say the other students had BAD credit history - just that they were carrying other student/car loans (and so less able to tolerate taking on more credit). She can prove income and has no debt (so can carry debt). Well, live and learn, my other kids won't be so. BTW, CC, Sears was MY first credit car out of college, followed by gas card but I had a car loan (she feels no need to get a car - rides the bus/uber). Now, I don't know how long Sears will be around.

[Will Hunting]

Her FICO score is fine - in the 700s - it's that she has no credit history in her own name - as an authorized user under my cc (she had her own number), it was reported but specified as under another user. I didn't say the other students had BAD credit history - just that they were carrying other student/car loans (and so less able to tolerate taking on more credit). She can prove income and has no debt (so can carry debt). Well, live and learn, my other kids won't be so. BTW, CC, Sears was MY first credit car out of college, followed by gas card but I had a car loan (she feels no need to get a car - rides the bus/uber). Now, I don't know how long Sears will be around.
I wasn’t saying they had bad credit history, I was speaking in more general terms. People with 20+ years of questionable credit history have a much easier time getting a credit card than someone fresh out of college in a good job with no credit history which is retarded imo.

[Xevious]

She is correct. CC companies don't like applicants with zero credit history. I had my kids get sears credit cards in their name (easiest card to get) when they were in high school and make a few purchases that I paid off on time so they could establish credit history.
I don't buy that. CCs are usually the first form of debt people carry to "establish credit", unless you have 100k in Sallie Mae loans like a lot of kids today. I don't know if they still do it, but banks would fill up your mailbox with CC applications once you approached eighteen, and they'd hang out outside collage campuses and military bases to sign teenagers up. I certainly had no issues getting a couple cards with no credit history, no renter history, etc.

[rmt]

I don't buy that. CCs are usually the first form of debt people carry to "establish credit", unless you have 100k in Sallie Mae loans like a lot of kids today. I don't know if they still do it, but banks would fill up your mailbox with CC applications once you approached eighteen, and they'd hang out outside collage campuses and military bases to sign teenagers up. I certainly had no issues getting a couple cards with no credit history, no renter history, etc.

Just sharing my (family) experience. She had renter/utility history but I don't think that mattered - it was very quick - almost immediate decline - I guess what they call a "soft" inquiry.

You are free to buy or not.

[Trill Clinton]

Must have changed. Cc companies were sending me $5000 limit CC's as soon as I turned 18 with no credit history.

[spurraider21]

My first card was a secured cc. Got the deposit back in a year

[Xevious]

Must have changed. Cc companies were sending me $5000 limit CC's as soon as I turned 18 with no credit history.
If what they are saying is true, it must have.

My oldest is 18 and she has not applied for one (nor do I think she needs to). But they were passing cards out like candy when I was a teenager.

[elbamba1]

If what they are saying is true, it must have.

My oldest is 18 and she has not applied for one (nor do I think she needs to). But they were passing cards out like candy when I was a teenager.

It was the same for me when I was in college - I had a USAA cc without any problem. My mother-in-law and my assistant both recently went through divorces and have zero for their credit scores. Both were denied credit cards from their banks. I helped my MIL get one to help establish some credit. It was explained to me that it is easier to get a cc with bad credit than no credit at all.

[SpursforSix]

Must have changed. Cc companies were sending me $5000 limit CC's as soon as I turned 18 with no credit history.

I made the mistake of getting an American Express card when I was 18. Thinking it was like all the others. Quickly maxed it out without realizing that I was supposed to pay the full balance off every month.

[Trill Clinton]

I made the mistake of getting an American Express card when I was 18. Thinking it was like all the others. Quickly maxed it out without realizing that I was supposed to pay the full balance off every month.


Same here fam. I had to learn about credit the hard way.

[CosmicCowboy]

Now that you guys figured that out, get a cash back credit card and pay it off every month. I clear about 4K a year on free money from cash back.

[spurraider21]

Now that you guys figured that out, get a cash back credit card and pay it off every month. I clear about 4K a year on free money from cash back.
i get 2% cash back on all purchases on my citi card... which is good enough. i know there are some cards that have 5% on certain categories for certain months or shit like that.

i apply it all as a statement credit for the following month. dont spend nearly enough to clear 4k a year though :lol

[Will Hunting]

Now that you guys figured that out, get a cash back credit card and pay it off every month. I clear about 4K a year on free money from cash back.
Which one do you have? I have an Amex platinum and put A LOT of reimbursable business stuff on it this past year but have maybe half of that in money I can clear as cash back.

[CosmicCowboy]

Which one do you have? I have an Amex platinum and put A LOT of reimbursable business stuff on it this past year but have maybe half of that in money I can clear as cash back.

I do the chase straight 1% + 5% quarterly specials. I do everything with cards plus a lot of shit through the business.

[DMC]

Same here fam. I had to learn about credit the hard way.

Shocker

[Trill Clinton]

Now that you guys figured that out, get a cash back credit card and pay it off every month. I clear about 4K a year on free money from cash back.

That was over 10 years ago and I have since mastered credit. I only use my card for hotels and car rentals now.

[Chris]

YOLO bitches! Where's my iPhone 12?

https://pbs.twimg.com/media/DzfDU2gUUAEPCYZ.jpg:large

"YOLO BITCHES!"

[resistanze]

Must have changed. Cc companies were sending me $5000 limit CC's as soon as I turned 18 with no credit history.

The US company that hired me has a preferred relationship with a bank, which allowed me to get a 10K CC. Otherwise, I would've needed a secured CC (like a friend that moved to the states a year later) even though I had a decade of credit in Canada.