17.5% of Auto Loans Have a $1000 per month or More Payment

[bjl584]

****Disclaimer****
Most of this article is click bait and pretty busch league. I just thought this was an alarming statistic.

A record number of Americans are grappling with $1,000 car payments and many drivers can't keep pace. Here are 4 ways to stay ahead (msn.com)

[disneysteve]

I didn't read the article but I wonder how many of those people have such high payments because they rolled an old loan into a new loan. I used to work with someone who did this. She bought a new car and a year or two later decided she wasn't happy with it so she bought another one. Of course she still had a balance on the first one so she rolled that into the loan on the new one. I don't recall the exact numbers but I'm pretty sure she owed more than the car was worth. I don't know why lenders are allowed to do that.

[LivingAlmostLarge]

I believe it for sure. I don't think I know anyone with a less than $1000 a month payment. Most people are buying $50k plus cars

[disneysteve]

I believe it for sure. I don't think I know anyone with a less than $1000 a month payment. Most people are buying $50k plus cars

You know me . Three cars. Three drivers. Zero car loans. I’ve had my car the longest at 3 years. DW and DD both got theirs last year. All paid off.

[ua_guy]

High sales tax and registration fees rolled into the loan are starting to really inflate payments too. On a $35k car registered in a metro area that's $3500 tax assuming no trade credit, plus probably about $1000 to register it, adding $4500 to the price of an already expensive car.

Roll that once or twice between loans and it's easy to see how people get upside down so quickly in things, even before depreciation.

[srblanco7]

You know me . Three cars. Three drivers. Zero car loans. I’ve had my car the longest at 3 years. DW and DD both got theirs last year. All paid off.

We have four cars ranging from 2018 to 2021 model years. All paid off. Car values at time of "new to us" purchase ranged from $22k to $42k - not cheap but not outlandish.

I contrast this with a good friends family where I know there are four car payments, three of which were related to new vehicle purchases. To each their own.

My hatred of car payments is endless. Trying to instill this into my children as I think the normalization of always having a car payment is one of the largest hindrances to saving/building a nest egg.

[bjl584]

We have four cars ranging from 2018 to 2021 model years. All paid off. Car values at time of "new to us" purchase ranged from $22k to $42k - not cheap but not outlandish.

I contrast this with a good friends family where I know there are four car payments, three of which were related to new vehicle purchases. To each their own.

My hatred of car payments is endless. Trying to instill this into my children as I think the normalization of always having a car payment is one of the largest hindrances to saving/building a nest egg.

People look at me like I just landing from another planet when I say I don't have a car payment and that I don't believe in financing depreciating assets.
I don't say anything unless someone asks, but the resistance that I receive is pretty intense.
Car payments are engrained in American culture apparently.

[kork13]

People look at me like I just landing from another planet when I say I don't have a car payment and that I don't believe in financing depreciating assets.
I don't say anything unless someone asks, but the resistance that I receive is pretty intense.
Car payments are engrained in American culture apparently.

I think debt generally is deeply engrained in American culture. But yes, car loans especially. When the topic comes up, I generally only make vague statements like "Not owing a dime on our cars helps alot." Although, most of my peers are pretty reasonable/responsible, so probably half or more are in the same situation, at least when it comes to cars. Funny enough, it's our youngest folks (19-22y/o) who buy extravagant muscle cars on beastly loans, and of course struggle with it because they're earning beans... Meanwhile most of us mid-/upper-level bosses are driving sedate, reasonable cars that are paid off. Strange dynamic in the military....

Occasionally one of the young folks will listen to us 'old' Bobs (35+ is "old" in the military btw ), and either sells off the expensive car for something smart, or just avoids the mistake in the first place.

[LivingAlmostLarge]

car payments are a way of life for most people. I know very few you pay cash. I mean really when you buy $80k cars how many have $80k to shell out? I say that when I gently suggested to a friend they be carefuly about buying theTesla Model X. It was $90k after taxes and fees but before the $7500 tax credit. His income? $90k/year. I mean I he could afford the monthly payments because it's 84 months, but still it's a lot of money. He thought it okay since he was trading in a gas guzzling SUV that he paid off $30k on from the original $50k.

Even when we made good money I'd be hesistating to spend $80k on a car. Personally if we can't afford it on base salary it's likely not affordable has been my mantra. That's not to say we haven't had car payments. We have. We had car payments from 2000-2003. Then 2010-2021 we got into the car payment trap. Only because it was 0.9 and 1.9%. But I hated it. When DH decided he was taking a new job with salary cut I wrote a check and paid it off.

2010 - new subaru with 5 year loan of less than $20k, sold in 2017
2012 - used hyundai took out $5k loan (bought for $10k) for 3 years and 0.9%, sold in 2015
2015 - leased subaru for $28k, buy out in 2018 for $16k
2017 - bought sienna minivan for $28k borrowed $20k and paid off in September 2020, I think we had a 5 year loan but I recall an 10k check to pay off

It's so nice to not have a car payment for 3 years again. I'm struggling with ever wanting a car payment and everytime I think of it I shudder at how much it will be.

[kork13]

Yikes, an $80k car loan on a $90k/yr income is pretty perilous..... That's the size of (maybe bigger than) a house payment! I wouldn't do that on double his income!

I've definitely used car loans before as well, but you can be responsible with it or not. Large DP, short duration, paid off quickly or cash in the bank to do so whenever needed/desired ... Only in college did my car loan not meet those wickets, and once I realized how dumb it was, I paid off the car within the following year.