Fantastic post from WC Varones the other day, highlighting just how ridiculous automobile financing has become.
He's stubborn, stupid, and suicidal as a lemming.It's not just houses. Joe Six-pack has found a way to get into house-sized debt on a car:
When Jennifer and Bobby Post traded in their 2001 Chevy Suburban last year for a shiny new Ford F-350 turbo diesel with an extended cab, it seemed like a great deal. Even though they still owed $9,500 on their SUV after the trade-in value, they didn't have to put a penny down.
The dealership, near the Posts' home in Victorville, made it easy; it just added the old debt to the price of the new truck and gave the couple a seven-year, $44,276 loan.
I live in the middle of Oil Country. We're like the Texas of the Arctic Circle, and that means that this town is full of pickup trucks. Big, gas guzzling, chromed out pickup trucks with HEMIs and other redonkulasly large power plants, and all the aftermarket accessories.
It also means this town is full of dudes earning six figures who even so, are living paycheck to paycheck.
I'm not normally one for negativity, but when I see a $70K truck with two $3K quad ATV's strapped down in the back, my first thought isn't "Wow, he must be really doing well" it's "How much of that is financed?"
As I said on WC Varones' blog, a guy I know got into selling motor homes and RV's a few years ago. His best customers are oilfield workers from Newfoundland. They trade up every year or two to a bigger/better RV. I am not making this up. They're never concerned about the 30-40% thwack of depreciation they take when they trade in a barely used model, all they ever ask is "What will my payments be then, eh?"
You want to talk about "house-sized debt?" How about being upside down $50K on a motor home?
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