Financing a car with unemployment check.

[HousingCounselor]

I went to a couple of dealers after doing massive research online about the type of SUV I wanted. I was really feeling the 2011 models for most SUV's from Ford, Dodge, and Jeep. I have this weird thing about buying used cars in the future but doing research on the cars as they come out so I know what I'll be getting into feature, safety and reliability wise when I buy a current for now model car used a few years down the road.

Anyway, despite going in looking like I don't have a dime to my name, -I do this on purpose so the salespeople assume I don't have any money and decent credit- I get hounded by a salesman who is asking about my income. He wanted to be sure that I was actually working because they always get a stream of car buyers wanting to finance the purchase with their unemployment checks. Really??

I was totally stunned when he told me this. Why on earth would you want to take on NEW debt and you don't have a job? The irony of it all. The fact that they probably lost their jobs due to the credit crisis and how they'd be pro longing the financial crisis by once again abusing the very system that caused them to lose their jobs.

The salesman was however equally stunned when I kindly thanked him for the information about the SUV and then turned and walked out the door.

[disneysteve]

Originally Posted by HousingCounselor

they always get a stream of car buyers wanting to finance the purchase with their unemployment checks. Really??

Doesn't surprise me at all. What's that line from Forest Gump - stupid is as stupid does.

Despite the folks who hang out here, most people out in the world simply don't get it. If you'd ask someone doing this, they'd see absolutely nothing wrong with it. They'd likely say that the unemployment check is a steady predictable income source. They know how much it is and how long it will last. They probably consider it even better than when they were working.

Most people who experience a drop in income do little to nothing to reduce their expenses and that's what gets them into trouble more than the income drop itself.

[HousingCounselor]

I understand not wanting to cut back on expenses because I deal with it all the time in foreclosure. People wanting a loan modification but only because they'll be able to keep up their dining out, clothing, hair, nails, spa and other crap that wastes money. I never heard of someone increasing their expenses after their income has been cut in half. I couldn't believe it.
You're right Steve. That's one of the reason's why I joined this site and have been lurking for years. No one I know manages their finances like we do and no one faces up to mistakes and debt repayments like we do either.

[photo]

Originally Posted by HousingCounselor

People wanting a loan modification but only because they'll be able to keep up their dining out, clothing, hair, nails, spa and other crap that wastes money.

People can pretty much find the money to do whatever they want. I'm no longer shocked to hear that people "can't afford" basic necessities for their children (dental care, notebooks for school, etc) yet they can always find the money for artificial nails, cigarettes, beer, and so forth. And for that reason, when I hear on the news about people living in poverty in the US, I also know that some of those people living in poverty drive newer cars than I do (and I can afford to buy a brand-new one in cash tomorrow if I wanted) and spend money on things that I can but do not. There's usually a good reason that some people have money in life and others do not.

We afford what we want in life, regardless of our incomes.

[disneysteve]

Originally Posted by photo

There's usually a good reason that some people have money in life and others do not.

We afford what we want in life, regardless of our incomes.

We should certainly acknowledge that there are those who are actually poor and struggling to get by for legitimate reasons but that said, I completely agree with you. Most "poor" people who I encounter, and I encounter a lot working in one of the poorest cities in America, perpetuate their condition due to a stream of bad choices and bad habits.

Education and environment definitely play into that. When all you see and all you are surrounded by 24/7 is people just like you, living just like you, making the same choices as you, it's tough to know any different way to live. And not to get too political but our welfare system is definitely broken and encourages the poor to stay poor by punishing them if they do anything to try and get ahead.

[feh]

Originally Posted by HousingCounselor

I went to a couple of dealers after doing massive research online about the type of SUV I wanted. I was really feeling the 2011 models for most SUV's from Ford, Dodge, and Jeep. I have this weird thing about buying used cars in the future but doing research on the cars as they come out so I know what I'll be getting into feature, safety and reliability wise when I buy a current for now model car used a few years down the road.

Anyway, despite going in looking like I don't have a dime to my name, -I do this on purpose so the salespeople assume I don't have any money and decent credit- I get hounded by a salesman who is asking about my income. He wanted to be sure that I was actually working because they always get a stream of car buyers wanting to finance the purchase with their unemployment checks. Really??

I was totally stunned when he told me this. Why on earth would you want to take on NEW debt and you don't have a job? The irony of it all. The fact that they probably lost their jobs due to the credit crisis and how they'd be pro longing the financial crisis by once again abusing the very system that caused them to lose their jobs.

You seem to be making a lot of assumptions about the financial situation of such a theoretical buyer.

[snafu]

Most people [not at this site] seem woefully ignorant about money and how to use it. Our school system doesn't teach basic money mgmt. Many people are unaware of the difference between gross and net income. They fall prey to every hustler, and advert that tells them they deserve_________ toy of the season. People are trying to fill the hole in their heart with the excitement of buying. Love is not equated to stuff was not taught by their parents.

[disneysteve]

Originally Posted by feh

You seem to be making a lot of assumptions about the financial situation of such a theoretical buyer.

While that's true, can you think of a scenario where using one's unemployment income to purchase a brand new car is a good idea? I can't.

[Nightfly]

While I'm in agreement that using a UP check is a pretty dumb idea to buy a car, I have a theory: I'm guessing that these folks run up their debt, including purchasing a car, and then declare bankruptcy. They assume - probably correctly, depending on their state of residence - that they can keep the new car as it's "necessary" for commuting to/from work. The dealership doesn't care or even know - they got their money from the corporate leasing plan that they purchase cars from. That's my guess...

[bjl584]

I know someone that did this. He bought a new car right after losing his job and used his unemployment check to make the payments.

[KennySoward]

Let me be the first to say that there is a fraction of the population who actually do need assistance; some disabled, some with physical conditions, etc.

But, this particular situation is not surprising. You can get a lot of stuff with welfare and food stamps that falls outside of reason.

The fact of the matter is that some people just don't care. They have been on assistance their entire lives and so they don't understand what it means to acquire/save/make good financial decisions. We have created a couple generations of people who can't take care of themselves (physically and mentally) and so they come up with some very good excuses why they can't work.

Like someone else said. Most people will figure out a way to afford what they want, even those below the poverty line.

[photo]

Originally Posted by Nightfly

I have a theory: I'm guessing that these folks run up their debt, including purchasing a car, and then declare bankruptcy.

Why not? Donald Trump's companies have filed for bankruptcy (I think it is) 4 times.

I think I need a fleet of Rolls Royces and a private yacht and jet. How about you?

[SnoopyCool]

Originally Posted by HousingCounselor

Anyway, despite going in looking like I don't have a dime to my name, -I do this on purpose so the salespeople assume I don't have any money and decent credit- I get hounded by a salesman who is asking about my income.

Bill Cosby did this once on The Cosby Show. Then his kid came in and, in front of the salesperson, spoke about how he was a Dr. and his wife a lawyer. Funny.

[HousingCounselor]

Originally Posted by feh

You seem to be making a lot of assumptions about the financial situation of such a theoretical buyer.

How is the buyer theoretical? Their intentions were to purchase the car. The only reason they couldn't is because the dealers and finance companies don't provide financing based on unemployment income. Unless they had a million dollars in the bank (which I assume they wouldn't seeing as they're financing the car and not buying one outright) they should be buying a car if they're unemployed. It may make me sound judgmental to have such an opinion but it is what it is.

@SnoopyCool I'm cracking up. I later learned that most salespersons will approach you no matter what you look like because they can't tell by the way you dress anymore.

Alice Cooper tells a story how walked into a dealership with torn jeans and messed up hair. Nobody wanted him so they made the rookie salesman approach him. He ended up buying six cars from him by the time he left.

[Frugal]

I wouldn't finance a car period, since we only pay cash for our cars. I could see though how someone on unemployment might have no other way to purchase a car (For instance, if their original car broke down) to attend interviews and help them to actually get a job. It takes a car to get to most job interviews, and a lot of places that require you to apply in person.