25% on a Car Loan?! That's Brain Damage!
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- Опубліковано 15 чер 2024
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25% is hood interest.
F165 mob
@@hermanrogers1325 mob?
The mob only takes 20%
😂
Mhmmm 🧐
25% he would've been better off putting it on a credit card!
Just another example of generational poverty and lack of financial education. This situation is quite common in some areas.
@@matilda628 Even if it were taught in school, it would be minimal improvement because its not taught in the home (except where it is).
Financially illiterate youth often have financially illiterate parents, who often had financially illiterate parents themselves. People learn through example, not instruction. If we raise kids in an environment full of materialism, instant gratification and image being valued over substance, we shouldn't act shocked when the apple doesn't fall too far from the tree.
Faffy
I already learned reading and math from 1-12 grade.
I just used the school and public library. Tons of books on personal finance,economics,home buying,etc..
Mom and dad
After school and night classes.
Online courses
Asking math teacher.
Glad I’m not brain damaged.
scarpfish Exactly. Majority of the time bad habits are generational.
scarpfish this exactly some people just want nice things and have no self control.
@@scarpfish well said!!
33k a year. Single guy with no major debt. No worries. Learn from the 25% interest rate.
I wonder how does his schedule works
@@godofdestruction3446 it’s actually closer to 36,500k a year. That puts him at making 10hr for each job. Working 12hrs a day for 6 days a week.
This young man has learned a valuable lesson. At least he is now aware of how people will take advantage of your lack of worldly experience.
Agreed or just take advantage period. Only going to get worse as millions more get desperate to make a buck and survive. Hopefully the majority won’t give in and stay strong and realize we’re all in this world together.
We'll know if he learned his lesson when he doesn't make the same mistake twice.
To be honest, I am devastated. I feel so sorry for this guy.
Good example how dishonest people are out there. How could you do this 25% to ANYONE?!
I was in a similar situation, except my parents tried to talk me out of it. They frontloaded the interest so i was upside down on the loan by the time i made the first payment. Never financing a car again
I once took a $10,000 loan out at 46.7% interest 😂 I use to pay the $213 every two weeks. It was the most disgusting thing I’ve ever done to myself.
Well I Loan money out at 28% incase you need a loan in the future.
I'll loan ya at 27.5
@@austintomkewitz7206 he will still choose me
I'll loan you 10k for 26.9%
Dam
This guys story is pretty much exactly like mine. I just paid off my own 23.5% interest car loan. Basically paid $30K for a car that is worth $6K today. The most expensive lesson I have ever learned and a mistake I will never make again!
Man, that is brutal!
I just got into a similar situation with a 29% rate..payoff is 7k 🤦🏾♂️thought if I went to a dealership with a healthy downpayment they would give me something reliable at a fair price...found out thr kbb is only 6k on a 08 used car..Never Again!...just gonna pay it off this yr price of this lesson 14k😥
why couldnt you refinance?
@@DrNickRiveria My credit was never good enough.
To live is to learn!
This kid is financially clueless and so are his folks
Liberal democrat
My parents are, too.
@@microspect u can be liberal with good finances, grant chardon e
my thoughts exactly! Smh
I give him credit for calling Dave for advice.
1. Never let car dealerships use their own financing
2. Car sales people are not your friends
3. Always find your own financing and shop before going to the dealership
4. Always be willing to walk out of the dealerships. They need you more than you need them
5. Before you buy a car, ask yourself ether or not you’re trying to impress others. How much does it cost to impress people that you’ll never see again
6. Save as much as possible for a downpayment so you won’t have to get a big loan
7. Always say no to add ups
8. Buy a car with a manufacturers warranty if possible
9. Have a firm budget. Don’t go over even it’s $100
10. Watch multiple UA-cam videos on “how to not get ripped off at the dealership” videos
I would re-word #6. Make your downpayment the price for the car.
Then once you do all that leave the dealership and buy cash
He put $2000 down on what sounds like a $9000.00 car. So he had saved, sounds like maybe he planned to get a car closer to the $2000.00 amount and get talked into a car loan without having established any credit. He should have searched online first. Its like he just went down to the used car lot in town and it was run by crooks.
11. buy an old Toyota on Craigslist for $2k and then don't buy a nice car until you're so rich you don't need to finance
Never buy a new car the depreciation on cars means it's never worth buying a new one
Really sad that neither of his parents said "hey, this is a dumb idea"
Him working 70-80 hours a week to only make 33k is what I would be worrying about
When I still lived with my parents around 19 years old I once mentioned to my dad I was thinking about financing a car. He told me "I don't think that such a good idea. I'd rather not have the repo man in my driveway" 🤣🤣. That was his shuttle financial advise 🤣🤣.
Because their credit sucks too.
Steve E yes
Middle class family
How is charging 25% interest even legal? Insanity!
yes, but some states have APR limit laws, that stop banks from charging to much APR on a car loan. I was a sales associate in Indiana at the largest used car dealership in the US and the cape was 25%.
The max is 30%
There’s a sucker born every minute, that’s how it’s legal.
I bought a car to drive uber when I was 24 with no credit history and mine was just around there. Still a dumb idea but 0 credit history...
The silence was deafening when the caller said 25% ☠️
“Did they say 25% is brain damage”😂😂😂
Yes, yes they did.
More like brain dead
One thing in life I learned. More you work, less you spend. You don't have time to spend it.
So true!
When I was working 12 hours a day, six days a week, I didn't even have time to do anything much less spend any money. On my day off, I just stayed home and rest, getting ready for work the next day.
Amen
I love how Dave can call someone “Honey” and “Sir” in the same call😂😂😂
😭😭😭😭
Early in the call, Zach told Dave he got "Honey Potted." Perhaps, Dave calling him "Honey" was his way of agreeing with Zach's comment. 🤣
I thought 5% was bad, lol
Hahaha In Mexico we have an average of 17%, and you could see go up to 30% or 40%
5% is definitely high. But if you don't have any credit, then 5% is amazing lol
I won’t buy a car over 0.99% APR lol
@@miguelcoronel7672 they have cars in Mexico? 30% on a donkey is a lot
@@miguelcoronel7672 in Brazil if you finance thru a bank the normal would be around 20-30%. But if you don't have good credit, it will surpass 50% for sure for a 5y contract. I guess Brazil and Mexico are really alike in this situation.
“Really, really cray cray”
-Dave Ramsey 2020
😂 😂
Yup that sums it all up! 😂
Rofl
"Your mom and dad let you wander down and get shot in the face."
Best line from Dave this episode
I didn't even know you could get 25% interest in a car
Yes buy hear pay hear . If I see that sign I run away .
@@josephcronin4209 *here...not *hear
Ohh 🍯, it can get up to 29% depending on the state you buy the car in😑
Legal loan sharping.
@@howlbigbadwolf 36% in California
Lol Dave sounding like my grandpa calling everyone honey.
Then a moment a later he says the car interest is really really cray cray🤣
lol, right?
I know, right? LOL
@@And1one757 LOL
Dave -"What other expenses do you have, gas, and partying."
Caller-"I wish"
🤣
LOL
😂😂😂😂
I bought my first car for 4k with cash from working construction jobs. Honestly, patiently saving up and then buying a cheap (reliable) car is the best way to introduce yourself to car ownership
I struggled with a 2.9% interest car loan. Thank God it's over.
I'm not even in the US and Dave Ramsey's advices get through...they are universal!
Uk?
Daniel Martinez his advices are for people not for Americans
@@ThatSecondaryGamer Costa Rica
Croatia
Czech Republic it works everywhere. Although you do have to take into consideration the percentage for retirement, mortgage etc. might be a bit different.
You can tell Dave is exploding inside but the professionalism comes out and says no 😂
Uncle Dave is actually 'insulting'you when he calls you honey😅
“You have to buy groceries at your house?!!” 😩 Dave is too funny!
I laughed when he said “partying”
The kid said "eh" because he knew the truth Lol
Arturo Torres He said “I wish”
I hope he is partying. I tell younger people in their early 20’s to party hard within reason to have memories so they don’t feel like they missed out when they settle down. I remember going on road trips and traveling to other countries with my friends during that time.
This is insane.
@@arturotorres6251 You didn't listen clearly. He said "Um..I wish" as in "that's' not me...I'm not partying because I am working all the time". Dave shouldn't assume every 20-year-old parties all the time. I knew some who didn't either back in the day.
When asked what he spends his money on, "food and stuff like that" is the best he can come up with. THAT is why he didn't bat an eye at 25% interest. That is Bad Credit Card interest rates.
"no honey" lolol
LOL
Haha endearing, yet patronizing
Everyone calling him a kid- when I was 20 I was 2 years in the service. I definitly knew how to calculate interest. This is a bit frustrating in that the public education system doesnt have basic financial requirement courses.
It’s so bad I swear it’s on purpose. I went through all of junior high, high school and even college without so much as a mention of personal finances. Sure they covering compounding interest in say a basic math class, but it is meaningless then. It only really sinks in when you maybe make an amortization table and see how such and such $10k loan can cost you $25k, or even $30k or $40k...
I work in auto insurance and unfortunately I see people make these kind of mistakes a lot. I had a 19 yr old girl finance a jeep for 6 or 7 years at $700 a month. I asked what her dad told her about that and she said he co-signed. I just about fell out of my chair. By the way she works at T-mobile as a service rep. The vehicle is twice her income
I’m in the same situation.. mine is 26% I finance through Santander...and when I bought my car I didn’t even know much about interest rates. I just know my wife’s car broke down and we needed a new car immediately because the military doesn’t care if you don’t have transportation. Long story short I’m struggling and I’ve tried everything to try and get out this car loan..
I’ve learned a lot since I’ve had this car though, and I always give advice to my friends when they talk about buying cars because they will take advantage of you!
When I was 18, I went in car loan with 32% interest. I got into car accident. And insurance paid off the loan for me. I bought really cheap car cash.
Since my car is cheap, insurance money actually went down. That was good experience.
Poor guy 🤭this happened to me when I was 19! 16.75% interest 😫had no idea what I was getting myself into!
Same first car 16% interest ,my mom had terrible credit and had no idea that it was excessive
In February i got into a 23% one :( trying to figure out what to do
@@ZyanBeast soooo what did you do ?
How do y’all get it that high. I’m 19 and recently got a car completely all in my name and my interest is 6.4%.
I paid $2200 for my 2005 Acura TSX, after a couple of upgrades I managed to up the value of the car to $3500 and always gets mistaken for a 2010-2015
Willing to bet there is a penalty for doing early payoff.
Wouldn't that be illegal. It's entrapment
jcrowley1985 it’s legal. when I paid extra to get rid if my previous car note , the bank would charge me about $50 in prepayment penalties... It really sucks. But the car is gone now and I’m free
@@linonator ah, still sounds like a scummy practice . I heard with mortgages prepay penalties are illegal so I thought it was the same for all loans
jcrowley1985 Lol I was shocked the first time I saw it .. thought I missed a payment somehow ... But the dealers are great at making you not notice those things . Never again
@@jcrowley1985 that's when the police/government sets you up
Thought the 16% I had on 15k was bad. Worked 7 days a week and paid it off in 6 months. Never again.
Your videos are always helpful! Thank you for helping my generation make the right financial choices Dave!
I think this was one of the worst deals I've heard from a 20-year old. He would have done better buying into the stock market this past February before the March plunge.
At least that money came back.
He is an idiot
Wished I bought more stocks in February. Would be up alot by now.
Who here really thinks he is going to pay it off right away? My guess is he is going to stick to the payments.
It wasn't originally a good deal that became bad. It was always bad they just are good at making you focus on the short term good and later on learn of the long term bad
Right, almost every bad deal in history could be described as a good deal at first that later became bad.
Exactly, when he said this I knew he didn't know how stupid this mistake was and that he doesn't understand not to get debt. Working 75 hours a week he should be able to save money to pay cash on a reliable 10k dollar car.
Ramsey is not even mad, just disappointed lol
He's 20... LOL
There's no reason to be mad.
I am so happy for this guy. He is learning these valuable lessons so young.
I did the same thing about 2 years ago. I got a loan at 24.99% and I knew I was gonna need to refinance so I paid the absolute biggest payments I could for 6 months and refinanced and got it down to 6% then paid it off as fast as I could
Still dumb.
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3,4,5,6% is normal intrest rates on a car!!
I always love how Dave always looks completely unsurprised at whatever his callers say. He's like a relative and you can tell him anything and he'll never judge you
I was in a similar situation while in college. The dealership stuck me in at 18%, I was only 19. I learned from it. It really does matter when you’re young, that you have people around you that can help guide you and develop financial literacy.
I now have 726 Cs. No debt and am now saving for a house. Moral of the story save money pay cash!
He’s 20 years old. He’ll be fine.
Just focus and go for it like Dave said. Just 5 months bro. U got this!!
Love this show
I feel so much better about my debt when I hear these calls.
My cousin did that with her student loan. I asked her why she would agree to a 25% on a loan using her father's income (worked in IT). She said no one thinks like that when they need money. I said "no one does math? So you agreed to pay back 25 dollars on every 100 dollars? Its not that hard to figure out." She interest is now more than the initial loan
If Dave Ramsey college course were created:
Semester 1: Your Stupid
Semester 2: That’s Brain Damage
Semester 3: Rice and Beans From Here On
All kidding aside they really should incorporate his courses into high school, many costly mistakes could be avoided.
*you're
He's young and didn't know better. Just surprised he's folks didn't give their thoughts prior to him buying the car. I was ignorant when I purchase my first car from a crooked dealership when I was 19 and I was forced to learn the hard way because I didn't had parents. But he has a good head on his shoulders working two jobs, knowing the value of work. He'll be okay and be better because of this
No excuse. He could’ve watched UA-cam videos on “how to not get ripped off” or “do’s and don’t s at the car dealership” etc.
Only mistake if you don’t learn the lesson. He’s young just paid for a valuable lesson. Time to break family patterns kid. You can do it. Keep following Dave’s team.
The best decision he made was calling Dave. I hope this experience ignite financial literacy in him so as to rescue himself and also break the generational curse since it is obvious his parents are equally clueless.
My brother almost made the same mistake, a stealership convinced him it's a good idea to buy a nissan sentra for 20k (car is worth 12k) with 25% interest. Luckily he told me this before he signed his life away so I was able to stop him.
That's ridiculous. They need to go buy a cheap used car for a few thousand and move on. That interest will cripple them.
Who is “they”? Boy has to pay for his own groceries, there is no unity there.
@@thecatnextdoor12 Meant just the kid. Not the family. He's got it good not having to pay for the roof over his head, so he needs to take advantage, save, and use his money more responsibly.
What would be the best option then? Cause I’m kinda of in this situation... but I’ve had the vehicle for a year. Trust me, I’ve thought about returning it or selling.
I would do either one of :
1)Refinance it at a lower rate
2) pay it off in 4-5months
3) sell it and lose 1k (for that example given) and learn the lesson.
ALWAYS research before you do ANY big purchase
What I did in my case was refinance it from 11.5% to 3.25% in less than 2 months
Why does everyone assume you dont have expenses when you live at home?
Kbb is no longer independent and non profit. Their estimates are just that. I wouldnt even bother.
I use edmunds
Refinance the loan under a credit Union Bank.youll get 3 to 7% rate depending on your credit
Some do flat interest rates regardless of score; but he may have too much negative equity in this
Wish I'd found Dave Ramsey at 20.
Oh so he doesn’t know how interest works ... 😳
And that is why SOOO many people make stupid financial mistakes like this. From my experience dealing with idiot friends, ALL they worry about is the monthly payment.... not even worry about the 84 months of paying it.
Michael Sumner facts !
Wow that’s bad. Even higher interest than a credit card
Don’t even know or care about the interest rate on my credit cards.
Yeah exactly! Only thing worse would be a payday loan to finance the car!
This happens all the time around US Army bases. Young Privates and Specialists have a habit of learning this the hard way
I bought a 2016 Ford Fiesta Se when I was 20 the car was priced at 10000$ and 18% interest rate, so in total was about 17,000$ . At the time of the purchase my mom was there telling me that it was not worth it and that I should look else where but I was too stubborn not to listen. A year later I regret not following my moms advice but you live and learn still owe for the payoff about 9,300 and with interest about 14,300.
not me being in this same exact situation, however i refainced my car then it got totaled it out. having a 25% interest rate was the biggest life learning experience ever.
Man I wish I had learned this in high school...I took my bad habits and financial knowledge from one mistake to another, “living life” along the way. Realizing what Dave has said many times, that had I just saved the money, and had had patience, I could have easily have purchased the item I wanted a few years later.
It happens to a lot of people, dealerships take advantage of people that don’t know much about interest or are barely building there credit. From experience my first car loan interest was 21% and it didn’t seem right to me. After 1 year of building credit I refinanced with a good credit union and dropped the interest rate to 3%, paid off my car in 11 months after that.
I love when Dave calls the guys honey - it’s like he’s being the dad figure
Haha when he said "I wish" right after Dave said "and partying..." 😂😂
I really like DR, and his messages to people and educating people on how to become wealthy. I really wish he could channel that much energy and knowledge to help people not stay poor. How to motivate people to want better for themselves and not end up in these situations. Although he hates payments and debt, they are very common in peoples every day life, and to help them make a better decision, although he doesn't agree with them would be very beneficial to his audience. He has a great cast and crew to help.
I feel this guy's pain. Thirty something years ago I made the same mistake. I knew nothing about interest and got financed through the dealership when I had great credit and could have gone to my credit union and gotten a wayyyyyyyyyyyyyyyyy lower interest rate. I wasn't by myself, I took my then-boyfriend with me because I thought that just having a guy there would help--nope. Pay that car off today if you can!
Ya right, this kid isn't going to stop partying lol.
it hearts my heart see that much on a car loan.
Did he call him honey? Check out the other guys face at 1:40 😂
Common address in the south
Brian McGrath, thanks I never knew that 👍🏻
Dave you are awesome. You and Graham Stephan are my favorites to watch.
They have common sense finance advice locked down!💰
Graham talks too fast and loud, it’s giving me a headache.
That’s a shame. I’ve only gotten one personal loan and it was for a car and I used my bank because I’ve heard horror stories like these about using the dealer financing. Now, looking to be debt free on 2021 with my husband.
Im 20 got my car at 19 for 14000 i discovered dave and now im realizing how much if a hole im in 😥
You can dig out of it. You can. Believe in yourself and learn from what happened.
@@BusArch42 thanks man I really need the push
Sounds like we're in the same boat ! When I got the car the salesman had me sign about 30 papers we went over only 3 of them and I still signed the loan idk what I was thinking
@@Maddenfinesser00 the Japanese have a saying, “fix the problem not the blame”. Don’t dwell in the past with its useless guilt and focus on the future - yours is bright. Side hustle etc whatever is needed to get out of the mess you are in. I suggest a chart on the frig so you see your progress constantly.
I'm paying 0.9% and I still feel the pinch.
That's a nice rate
@run teldat I don't need any certificate from u..I was offered 0% for 60 months and I foolishly went for 0.9% for 72 months
@@bhupesh0111 .9% on 100,000 is 900$ a year. Nice brag
I pay 0% interest on nothing for my cars
@@usernameluis305 my car is only $29500 no 100,000
Saw a guy in FB group purchase a car for a little over $60K+ with 29% interest rate for 96 months. Only thing I want over 5% is capital gains.
This kid isn't paying off this car fast, or selling it and his life won't change. He didn't learn this lesson. Multiple things in the call signifies this.
like what? I think he will.
@@phatcrayonz he said "it was a good deal" and throughout the call continued this thought. But mostly he didn't understand any of the stuff he actually bought or terms of condition. Especially when he is trying to sell the car for the value of the entire cost of the loan. Which Dave was trying to explain isn't needed. But this kid probably got his first couple jobs making a little money and so he did whatever he wanted. 2800$ a month is a ton for someone living at home. Expenses for bills and maybe even extra 500$ top. He can put 1500 to 1800$ at least towards the car payment. Dave is generous with the 800$. But this kid went into this call trying to qualify himself for buying this car on a loan. He only said that he messed up on the loan negotiation, not that he shouldn't have even taken a loan. Which signifies that he would do this again but try to not have 25% interest.
William Nett wow. I see now.
It didn't sound like the caller really understood what Dave was saying.
I don't necessarily agree with this. Sometimes people need time to think things through. It was obvious that Dave said things he had never heard about so he just wasn't educated. So, he could be the type who would get off the call and start looking stuff up to better understand his situation. I agree he didn't fully understand what Dave was saying at first. Well, that happens when all of this information is new to you. His parents clearly didn't know enough to teach him. So...the hope is that he did do more research after the call and now he is on to recovery.
Wow I am at a loss of words.
Cars are the new 2008 crisis in the making. These loans and prices on these depreciating assets are insane.
I would never pay 25% interest on anything, least of all a car. I hope he learns his lesson on this one.
I work in auto loan servicing I’ve seen 27.9%. With per diems close to like 20 bucks a day.
This poor kid is a car salesman's dream.
Ken has become so wise. Great to see.
I can see why the dealer got away with bamboozling this guy with 25% APR and getting him to drop $2k. He didn't even know what pay off meant.
Sadly this is common in the military and it’s not always the buy here pay here places that do it
It's a life lesson, the guy will not forget this and in the long run that's a good thing. I've been there and made super stupid financial decisions that took me years to sort out. If the guy follows Daves advice then he is out of the woods in 4-5 months,. We no longer have to worry about getting eaten by the lions, but there are plenty of (financial) predators out there, as this caller proves.
For %25 interest you might as well apply to the dealership.
And to think I was fighting to bring down the interest rate on a car loan from 3.4% to 3%.
'you ain't got nothing to do but work'--I love Dave
I see this everyday. They are told that they can refinance. Wrong. What you get is what you get. NEVER listen to the salesperson.
I can't believe this! That is absolutely crazy. You tell them uncle Dave.
My dad use to say there is nothing as blinding as a shiny car badge, I guess he was right!
Literally was in the same situation as this kid when I turned 19