And if you maintain your old but reliable car you save big. I am happily driving my 2015 Camry with 105.000 Miles and no issues. I will only buy a new Camry if the 2015 model had a catastrophic engine failure. With proper care i expect another 100.000 Miles out of the Camry at least.
I purchaded older vehicles with low miles. "Old lady" cars. Lower purcase price and lower insurance cost. Drove one for 12 years. On year 4 with my current vehicle a 2010.
As a former car salesman I can tell you pat is right people don’t care about the interest rate. That’s how we sold, we’d surprise them that they could finance a $70,000 truck with their $40,000/y pay (84+ months). Those are the same people getting repoed now🤷🏻♂️
It’s not that they don’t care, it’s that people are so inept at finance that they don’t understand what they’re getting into. Y’all are preying on the uneducated lol
I havent jad a car payment in 12 years. Married my wife got rid of her payment in 6 months and she hasnt had one in 3 years. True financial freedom is no debt
@@Samsonight33 like i said true fincial freedom is having no debt. Dont need much money if you have no debt. Dont have to jave this job you hate with bo debt.
@@inmate0054 Wow. You've really got it figured out, dont you? I guess all of the billionaires out there that leverage debt as a pillar of amassing more wealth are suckers. Guess you also don't need to be very good at spelling when you have no debt either.
Right, there are plenty of sub-$15k used cars that will get you where you need to go in comfort every day, if you research which models are reliable and you find one with a solid service record and minimal rust. The repair costs of an older vehicle are much lower than a new car payment, about $50-$150 per month on average.
My first car was a 2008 kia optima, it was $5k with 124k miles. I put $1000 down, financed it through my credit union, 2.99% on the interest rate. My payments were about $90 a month. Drove the car from 124k miles to 250k miles. Made over $60k driving it for Uber too. And I still sold it for $1400 after all.
If you only consider car payments rising it’s scary but at the same time car payments rose so did EVERYTHING else. When you think about how people afford those car payments in addition to food, housing and utilities, that’s terrifying
Everything went up, except for inflation adjusted wages. Those took a cut. But J Powell will tell you the hot job market is responsible for inflation 🤡
Think of a $75,000 household income and divide it between a husband, wife and 2 kids. I don't see how they can afford a middle class lifestyle---unless they live in some rural part of America where the cost of living is very cheap. My household income is $60,000 with 2 adults. We drive very cheap cars.
Its absolutely true, most auto shoppers are focused only on the monthly payment amount. One of the first questions a dealership sales rep is what kinda monthly payment do you want, but never tell the customer about the interest.
@@allyfizzle403you say depreciating asset as if the average person even knows what am asset is, much less one that retains value or increases in value. Common sense comes about from people being commonly taught something. Money is intentionally not taught in this society unless one takes the incentive to teach themselves. The whole monetary system is dependent on people being dumb.
@@allyfizzle403many people get a car note because they need to get a car. Which is a need in today's society, they arent worried about a depreciation asset, they are worried on how they will get to work on time and drop their kids off at school.
There is a flaw in PBD's argument and here is the correct one: He incorrectly assumes that the 60% increase in car payments has to be matched with a 60% pay hike. This is a false logic because the salary someone makes in 2023 is $78K which is a % increase from $64,000 in 2018 whereas the price of the car went from $32,000 to $46,000 which is sufficient to cover the increased monthly payment for the car
@@user-ml6jb8hr4i no what you don't understand is that 78k increase number in 2023 is fools gold because of higher inflation your purchasing power is much less today 🤔
I'm still driving my 1997 F250 XLT HD 4×4. Paid 6k cash 10 years ago, and I've never had a car payment. That truck brand new off the lot was $25,900. And I still like mine more than the new ones.
I once paid off a computer in 1 year. It was zero interest so I thought why not. After paying less than $100 per month for 12 months I was happy to be done, can't imagine paying $600+ for 8 years for a car. After 8 years that car is going to be worth less than 1/2 of starting price, if it's not wrecked completely.
Do you think alot of people do that to get a lower monthly payment so they can pay extra of necessary? And just incase they can only make the payment due it wont be too high?
@@hebrewharv8018 well they apply for these extended loan payment schedules to bring their pti down enough where we'll approve them. Its mostly higher risk borrowers where they're interest rates are fairly high. If they went with a typical 60 month loan on 35k they'd be playing close to $900/month. We LOVE these loans because we milk the interest out of you but most people don't think that way. They just see a lower payment and sign the paperwork
Talked to a local repo guy yesterday while he was working he said they could work day and night and not even make a dent in the outstanding requests. He also said he has never seen anything like it and he has been doing it for 20 years.
The data speaks for itself, but interviewing people on the ground actually participating in the data adds a lot of weight. With the market right now, when I drive I just guess how much people's payments are looking at their cars. Such a waste. Especially when it's not a Honda or Toyota.
Finished paying a $400 car payment 5 months into covid. After that I felt so good to start saving more money considering how this pandemic would be. People don’t understand how much a relief it is to be debt free even if u make good money.
I'm not a bot or anything but if I were in your shoes I would learn about crypto and instead of simply saving that $400 put $300 into Ethereum every month and get as much as you can while it's under 2k before the next big run up comes. I hope this message helps you random person on the Internet.
Some of those savings will go back into major car repairs at some point. Then more savings into a down payment for a new car. The cycle never ends. You get short breaks or the illusion of freedom.
I sold cars and its wild the people that come in and actually buy from a dealer. Even my coworkers thought i was wild for driving cash cars but i was always hearing about them stressing over bills. I always did fine because i was working for commission and never wanted to put myself in a bad spot to begin with.
My man. What’s up with dealer websites??? They are loaded with fucking pop ups and chat windows. Are they purposely trying to get you to leave the website? Lol. I can’t stand them.
@@tdz69 lol usually they are just simple virtual tools on the manufacturers site that just let you look at different options. The goal of the websites is for you to put your information so a local dealer can begin to harass you. Try just looking directly at dealer inventory sites and avoid putting info down.
As a young guy who didn’t know much about interest rates and such. Went to a Toyota dealership trying to buy a 2016 Camry, the guy finessed me and told me the bank didn’t want to give me the loan but would for a 2019 Camry. I took it and I’m paying $800 every month. Have a year and three months to go. Worst mistake I’ve ever done and I’ve learned my lesson.
I remember business class in high school. The very first day, the teacher got excited, walked over and swung the door shut and said, "Today, were going to learn all about car lots".
I am 73 years old. As a kid, my family always drove used cars. It wasn't until I was in high school did my dad ever come home in a new car, and then, it was a Rambler. My dad was a Senior Research Chemist for The Eastman Kodak Company in Rochester, NY. He was paid $12,000 a year. We owned a home, had a boat, took vacations, never wanted for anything (3 kids - stay at home mom). That Rambler cost over $2,500. Even then, cars were a big ticket item.
I lived for a long time with no car payments and it made a lot of sense. It allowed me to get to the point that I make more in just dividends than my house payment would be. I now allow myself one car payment at a time.
Your always consistent and relatable. I’m on the low income side of life. 3 years of sobriety starting over. My credit score went from 400 to now 700. I’m paying my vehicle off this year. So I have been learning a lot from your content thank you for doing this.
@@StrongerThanBigfoot basically living off cheap home made food. Paying off debts with every extra bit I had. Not going out to restaurants. I haven’t even been dating. It’s finally after a year and 4 months paying off
Honestly listening to this channel and others. And actually doing what they suggest. That’s been a tremendous underlying force for my commitment to becoming successful ✌️
My father has sold cars for 40 years and I sold cars with him for one year 20 years ago. Let me tell you and it’s still true to this day, people only care about what their monthly payments are going to be. When a dealer hears a customer ask that question they also hear “CHA-CHING” at the same time!
my father explaind to me this way.......say your boss cut you a check for entire years salary say 50k.....would you go run down to the dealer and buy a car for 30k ?? of course not because you would have no money for food and shelter after... if your making 50k you should be driving a 10k car max....
@@workingshlub8861 I hear you, how about if you don’t have the cash then you can’t afford it! Only finance cars and homes if its going to generate cash flow!
I’m a nurse and I haven’t got an annual raise in two years despite being employee of the month. Being thrifty and playing the cash back credit card game has become a necessity.
Yep. I’m in the car business and have been through the whole pandemic. It was wild. With Honda and now Mercedes. I feel bad for the people who were buying. I am in accounting and the amount that people were overpaying was wild. The people who got the best deals were the ones who did a lease buyout. They even restricted those after about a year.
@@victorecheverria9269 I am in the same position, not worth it to be honest with you.. if you have the opportunity I suggest store your value, not sure what role transportation plays in your life obviously
Prices are never gonna go down buddy. Its only going to get more expensive from here on out. Why don't you just buy a used car and fully pay for it with your saved money? Last February I bought a 2000 Honda Civic EX with 168,000 miles. Paid $1,200 with insurance. It's beat up but hasn't given me any problems at all. It has 202,000 miles now.
The broad-based Standard & U.S. consumer confidence has sunk to record lows, thanks mainly to inflation. Retail spending, home-building, and manufacturing output all declined and those who drive the U.S. economy, are starting to cut back on discretionary purchases, such as appliances and services. Regardless of our market conditions, however, we should continue to promote savings and smart investments.
There is very critical situation for US people and other countries people. The global economy is going to very poor situation. Inflation and unemployment are on the rise۔
There are several reasons I have been investing under the counsel of an advisor which are someone who sets asset allocation that fits my tolerance and risk capacity, investment horizon, present and future goals ‘’Eleanor Annette Eckhaus’ has provided all that and I don’t want to go into ROI on a public space.
What the pandemic showed is that people are a lot more secure if they have an emergency fund and a financial plan; one with a Plan B and Plan C. Also the war in Ukraine are both wake-up calls that stock market crash can happen abruptly in a recession and inflation may rise. Hence, everyone needs a crisis investment plan...
Thank you roddy for this tip. it was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her résumé..
Yup. I bought a 2012 ram in 2015 it’s Deisel, only had 40k miles on it and I paid 40k for it. A brand new one three years newer was almost 80k! I’m still driving it, it’s got 82k miles on it now and it’s paid for!!! 👀💪🇺🇸💯😎
Pat is cookin' this episode. Seems like he's done a bit of research after the past few interviews that he's had up here. Wages are not going up. Prices on everything has always been going up and has far outpaced the increase of wages. Thank you for bringing it to the forefront of the conversation Pat.
I have a degree in finance and worked very briefly at a car dealership. The biggest problem I saw was payment shoppers. The only four components relevant are the interest rate, the number of payments, the principal (or price of the vehicle), and the monthly payment.. Dealers tweak every other variable just to get the monthly payment acceptable to the buyer. Never mind the fact that they probably just added two years to your loan, at a much higher interest rate then you may well qualify for and certainly did not lose any money on the car price itself, despite what they say. My simple advice: go online and access an auto loan calculator. Plug in the numbers- right in front of them, and if they don't add up, something is very wrong. Note: the down payment will, or should, reduce the principal used in the formula.
After being ignorant to that for years the last 2 cars I purchased I went to my credit union first to secure a loan that I found acceptable within my budget. The interest rate was far lower than any dealership would have given as they get $$ on the back end for jacking the interest up.
The problem Ive always had at dealerships is I come in pre-approved for the vehicle I want, at the price Im willing to pay. They hate me because I know what the vehicle is worth and they cant finesse me. Ive walked out of dealerships because the salesman and manager arent willing to come down on the price, and they cant make extra money via financing. They get really pissed when I tell them the only thing I care about is the principle because Ive already got a loan. Monthly payments dont matter, interest rate doesnt matter, and duration doesnt matter, just the price of the car lol.
Its crazy that in 2023 people are still payment shopping, I bought my first car in 2018 and literally the advice I kept seeing on the internet is not to payment shop, I thought it was common sense smh
No car payment is the best way to go. My last car had no payment, and it was so nice to not worry about it. Unfortunately, I had to get rid of it and didn’t have cash to pay for a safe and reliable used car because of what used car prices are now. Car prices are just insane.
Pat is absolutely right. Most people only care about how much their monthly payment is. When I bought my first new car in 1995, the sales person asked me how much I wanted my monthly payment to be. I told him that I wanted a 36 month loan not a 60 month. He kept telling me what my monthly payment would be so much lower if I did 60. I said, “I only care about how much the bank is making off of my loan in interest. I’m not giving the bank anymore money than I have to.” He was surprised. My eyes are always on the interest when it comes to loans.
It's also important to ask the total price. I went in for a new phone the other day and the lady told me the monthly. I asked her the total cost of the device, and she repeated the monthly and looked at me like a fish. Like, lady, how much does the phone cost? 😂
@@tylersingleton9284 Well done! Those that don't understand that are the ones that have caused a 50% increase in new vehicle prices over the last 3 years.... they just don't focus on the MSRP or interest rate.... just that one magnitude (monthly payment)
I personally am more focused on the opportunity cost. if you paying x % of your income to a reoccurring bill. your income and ability to utilize it in any other way is stunted until its gone. if you're spending 1000 a month on car payments. that's 12k less in getting ahead every year.
Same here Linda. When I was 23 I was looking at new corvettes. They did all my paperwork and come back at 11% interest. The payment was 1100.00 a month. And I knew I could afford that but I'd be barley scraping by. Went back to the dealer a couple months later I dealt with a salesman and the manager. I bought the car at 0% interest and a 900.00 a month payment. And I saw the first salesman when I was doing the paperwork for the car. He looked pissed. This was in 2003. I know longer finance cars. It was a young and dumb kinda thing.
Seeing this really makes me appreciate owning my car, just a humble 02 Honda Civic ex but it beats being in debt for the rest of my life. Being a private reptile breeder is my only income and there's only such a slight margin for profit and that's taken up usually by adding new animals or traveling so I couldn't imagine how much harder it could have been with hefty payments like that. I can only imagine what it's going to lead to.
I had a 98 civic dx and a 2003 lx (destroyed by hurricane Sandy, recieved 500 more than I paid from Geico after using it 4 years) and a 2005 ex limited edition. Those cars were great, the first one had no ac or antilock brakes but the mileage was in the high 30s. Old school Hondas are the best. I live in PH now and mostly drive my Honda 110cc scooter, $4 to fill the tank. Bought it new for $1,150 cash 4 years ago. I go to the beach and play tennis at 45 because I never wanted a BMW. A dream car is the one that will lead to your dream life.🤙
My HS history teacher once dedicated a day to car finance and why you shouldn't buy brand new off the lot. Learned a lot that day, and it has since deterred me from even looking at new cars. I'm happy in my late 2000s car for now, and when Im sick of it ill be buying used again most likely
Used car prices were bad back then and worse now. Sometimes new is better. For example a basic trim sedan, under msrp, and financed through a credit union.
True. In 2019 we bought a 2017 Volvo S90, certified pre owned, with only 6000 miles on it. Paid only $35k, about half of what a brand new S90 would've cost. Best car purchase I've ever had. And with a better warranty than you get if it was new. Only problem today is you can't find many CPO cars because nobody is buying right now. I have no idea how many dealerships are going to survive, let alone the manufacturers. Got a feeling we're going to see some major downsizing in the auto industry soon.
Was looking to buy a car 3 years ago planned on just financing with 0 down but my older brother convinced me to at least save up 40% of the car, while saving up a year later ended up finding a 2015 Kia with 65k km ended up buying it for 8k (which was less than what I saved up) BEST advice and decision I made especially after seeing my friends car get repoed
To bad you bought a foreign piece of crap. That has a good chance of catching on fire, that’s the problem with ppl like you buy American. If we all bought American cars they wouldn’t be so expensive… unreal
Me too, I bought a new truck in '17 and paid it off very quickly. Never again though. What I paid seems cheap compared to now. No way in hell am I dropping $50K on a vehicle.
8 years ago I bought a house, the payments were $900. I just sold my house for double what I payed, the new payments are $2000 a month for the new homeowners, a 30 year old house.
Did you notice how dude was quick to call people idiots for not knowing or wanting to learn. Did you see how Patrick corrected him for saying that horrific statement?
Pat your 100% right if people actually cared about interest rates instead of the payment each month places like rent-a-center and Arron’s wouldn’t be in business.
I worked at a rent to own, soul crushing. I couldn’t sell to people because I was like you are willing to pay 150 bucks a month for a 4 year old tv for 18 months when you could save for 3 months and buy it straight off. Only 39.99 a week!
@@DC-bx8ww if you think that’s soul crushing, do a deep dive on the cash now places giving people $5000 loans around Christmas for 46% interest rates… ive heard stories from an employee of absolutely devastated people signing for near 50% interest on a loan they literally will carry for the rest of their lives if their situation doesn’t change
@@Okeen12 yeah I've said they should make it illegal to do rates so high.... They prey on the poor who are at hard times and then wonder why ppl have to rob gas stations and steal.
I got lucky to have gotten my house in September 2020 and then had to get a new car in March 2021. Everything started going crazier shortly after that. All my payments are locked in at low interest and I bought what I needed instead of all the wants. It took a couple of years to build my credit to get there but glad I pulled the trigger . I feel bad for others that can’t take advantage of the financial situations that were available. Hopefully everything goes better than what it looks like.
Three years for a car payment was the norm a decade or so ago with 0% interest. Crazy days!!!!!!! I'm with Adam. Interest matters! My Uncle taught me a simple lesson many years ago. Interest in your pocket great, interest out of your pocket terrible. Live by it, and you will get ahead.
@@keeganrobbins-pu6cb A 2013 Chevy Malibu with 105k miles on it. So far I’ve had to replace the wheel bearings and do an oil change but that’s about it. I thought it was a pretty fair deal at the time for 7500 with a 3500 down payment.
Pat is so right about those. I moved to the US in 2020, bought a cheap car and had to spend all kinds of money on it, 3 weeks ago I bought a car and my APR is 19%, couldn’t get any better rates because im new in this country and I have no credit history. I care about the APR but I needed the car to commute to my new job which is one hour away, hopefully next year I’ll refinance but he’s absolutely right, people care more about the monthly payment.
I got in same ordeal with 15.9% paud payments for 6 months and the value has went down a lot whereas been paying so much interest now underwater to try to refinance even tho got higher credit score. Was told if paid 3k on car, credit score was good but too far under water to refi to get a lower apr
@DomT0311 The guy clearly he said his credit history is non-existent and he really needs the car and he already bought a used car that ended up being expensive. Sometimes you are smart enough to save but you just can't due to circumstances.
I just bought a car over the weekend. And the question i was consistently asked is "what do you want your payment to be" and luckily im a little smarter than that but i definitely see how it gets people. I shut down several lots by saying i wouldnt pay more than xx total, and needed a good rate.
Haha. I just inquired on a used car off of AutoTrader. Dealer got back to me. Jessica asked me similar “what monthly payment are you looking for? Do you have a trade in?” Two questions, if answered, will benefit the dealer and not you. I told Jessica I do not have a trade in and my first priority is arriving at a sale price for the vehicle after I see it. Jessica apparently fell into a hole as I have not heard from her. I hope she’s ok. Lol.
The worst part is some lenders will bait you into setting up your monthly payments on auto-draft from your bank account by offering a small “discount.” What they don’t tell you is that the loan interest is front-loaded meaning a larger portion of your monthly payment goes toward interest and less toward the principal balance. So the entirety of the loan is dragged out longer and you end up spending more WITH that measly “discount” than without it. This is especially true if you choose the minimum payment amount, like most people do.
@@jerryb5631 well damn, Jerry. You sound exactly like Adam 🚩 People who grow up in households with poor financial hygiene likely don’t have access to what you consider “common knowledge.” Please enlighten us as to where one would acquire this knowledge to avoid learning from experience and piling on more debt during the process.
@@kurtnewman7182 My point is really less about the interest structure. It is more about the way they use human behavior against our own detriment to make a profit beyond what is necessary. Offering a discount to influence consumer behavior whilst knowing the likely outcome is in their favor. They clearly know that most people (who are more concerned with that monthly payment amount) if given a choice will choose the minimum (which is now even lower with said discount applied). They also know once you set up auto draft, you are less likely to go in and make adjustments for each payment when you have a few extra bucks to spare. That’s what they are banking on…
My car is from 2003, 99k miles and still holding strong! Meanwhile, everyone around me is getting new cars, and asking "man when you're going to get a new car?"
2004 Subaru outback rebuilt motor here. Got it for $2,500 paid cash. Pre covid by 6 months. Still runs great. No way will I ever get a bank loan for a car for rest of life, have saved enough for a decent used car once mine dies.
I couldn't agree more. I've been thinking about this same stuff for the last 3 years wondering how the F people are buying new cars and trucks. The other piece of this is showing what you pay in interest over the course of these loans. I know you see it on the calculator but to emphasize how much that interest rates will cost you over the course of that loan. Great stuff keep it up on the channel!
Same dude, I have friends who are way more "broke" than me, driving $90k-$100k new trucks...and I cannot physically comprehend how they're able to do that...these are "young" kids too 24-27 years old.
People used to lease cars instead of buying with a payment of around $199/m vs $500+/m when fully financed. But now, the interest rates for lease are way more than for financing which makes the payment the same. I knew this was going to happen, so I refinanced my previously leased car last June, 7 months before lease maturity with 1.7 APR. I also made sure my mom got a car as well with the same APR. Best decisions ever! Now buying some gold and I’m ready for what’s coming!
The craziest thing is we used to have bare bones stripped back versions of specific cars for 10k roll down windows no AC etc... we had a variety. Now everything starts at 20/25k with interest trucks are minimum 50k there is little to nothing in regards to competition.
@@Billy-rq9hs Big facts my grandp tells me that all these fancy cars are just big waste of money, you just need a good reliable car to get you from Point A to Point B
Yup better off getting an pre 2010 car and just maintaining yourself these modern cars require so much to upkeep you cant work on them yourself anymore especially the electric ones
What Adam started to say was: you cannot get a 108 month car loan for the same interest rate as a 60 month loan. When loans get longer than 60 months, bank added .5% or so for every extra year.
I almost made the mistake of buying a new truck half way paid in my current truck (Toyota Tacoma)fully loaded with all the bells and whistles 600 monthly pmt at 2 percent for 66 months. Was going to trade in was not getting much for trade in and my new truck pmt was 900 with 5 percent for 72 months for a Toyota tundra mid grade nothing fancy. It’s good to watch videos like this it opens your eyes for mistakes that might do in life.
Adam has never been in a position where he’s struggling…if a person has to get to work, they get what they can pay for…been there done that…now everything is paid for and I’m going to drive my car until the wheels fall off! 😊
Right...he's obviously never been in a situation where he didn't have the luxury to worry about turning down a car due to how much interest would be paid. When you NEED to get to work etc you get what you can get to survive and worry about the rest down the road. The only thing that can be done is educate yourself beforehand to escape becoming a victim.
Big facts. You also have the people who are knowledgeable on personal finance but make decisions based off of emotions, or obtain satisfaction through material items.
It’s so true what Patrick says most people look at the payments per month and don’t look at the interests rate talking of experience l remember when l bought my car the interest rate was 20% and my insurance company told me why l bought a car with the interest rates that high but l didn’t really know or looked into it because l needed a car
You are 100% correct, the average family is not thinking about how much they pay in interest, they are only looking at the monthly payment they're making and if they need to lower the monthly payments they are ok with increasing the number of payments to be made. And the sad part is they end up grossly overpaying for the car (a depreciating asset) by the time they've paid it off. And if they have a 72 month or 84 month plan, by then the car is prob worth 30% of its actual value (not based on inflated value). if things normalize in a few years, let's say the Honda Accord goes back to $33,000 from $38,000. That means the buyer just lost $5000 on his purchase not to mention the insane interest amount they paid on $38,000 loan. DO NOT buy a car unless your livelihood depends on it.
It's been a long time (years) since I've had a car payment but I still remember that feeling the week the payment came due. Stress and worry will shorten your life.... I couldn't imagine what I must be like to have a 7 year auto loan....
Don’t be a leach either. Don’t take advantage of working class families who are low income and charge them astronomical rent for a shoe box apartment either, just so you can maintain your lifestyle.
Thank you for addressing this. Auto affordability, or lack thereof, is becoming more and more mainstream by the day. I watch several auto market channels, and see what is happening. To make matters worse, auto manufacturers such as GM are holding back some truck production to keep inventory low so that prices stay at the current profit margins. Even worse than that, many new car dealerships are still marking up over msrp. When one channel host ask ed his audience, "Who is buying new trucks at these high prices", in that case F150's, and F250's, he answered himself. He said "No one is! That's why you're seeing rows and rows of new trucks covered in dust!" They are no longer the working man's truck. Neither is Ram, because Stellantis is also increasing prices.
You make an intention you will be financing through them. Then at the last minute you surprise them with a credit union check and outside cheaper financing.
Just finance it and pay it off the next day, it's not that complicated. Everyone knows they don't like cash, they get kickbacks from the financing companies that operate out of their dealerships.
This is a great point! I got a 2020 4Runner during the pandemic. Its my first new car. I was debt free, and got the OTD price of $41k. The finance charge on my 72 month loan is 3.23% but I'm keeping my credit going by having a loan. Anyway, it will be paid off this December by making double payments. I plan to own it for the next 20 years and only put maybe 12,500 miles on it so far. Get out of debt people and live like no one else so you dont get caught in the future storms that surely will come!
I explained this to my wife but she was adamant she wanted the car. After 2 months of trying to explain it to her she still didn't get it. Anyway she ended up buying the car and now complains about the payments and duration. I have now banned her from any and all financial decisions. I make all the financial decisions now on my own. I think it is just emotion that ends up selling the car.
Man that sucks when couples can't be on the same page. It hinders growth to wealth. Sell the car and get something for cash. Save up for the car of your dreams but pay cash. 💰
I only buy $3000 cars. They get older every time... And I learned how to turn a wrench. But they always stay the same price. I've had the same car now for 4 years. And I haven't had a car payment in over 10 years
I paid $27,749 for a used 2018 BMW in 2022. It only had 20k miles on it because it was a lease, looked nearly new, and all the service was performed at the dealer (so far as I can tell from maintenance records). I know that's a lot for a used car, but was the KBB and many people were paying above market value because supply was down. This was in October of 2022. I passed another dealer who wanted $30k for the same car with even more miles, and found lots of sellers online asking even more than that. I felt like (given the then state of the market) that I got a fair deal.
My biggest regret was allowing my dad to “help me” by putting $8k down on a $25k car when I had no savings. I was spending $500-$600 a month while I was making $2600 a month from my job. I couldn’t afford anything else because a third of my money was going towards the damn car.
Yeah that's not cool at all. For $8k he could have bought you a whole truck but some people have an ego thing and can't stomach being seen in something too old and used.
My first car was $1K paid in cash. Had a hole on the bottom the size of a dinner plate that was fixed with a welding to pass inspection. It lasted for 4 years until I traded in with my first job out of college. Paid it off in a year to earn some credit. $8K can net a decent car. But, you’re lucky to have a dad that can give some money.
Yeah sounds like he wanted you driving a status symbol so he could brag to his friends. My family tried everything to persuade us to not get a car loan
That math doesn't make sense. A $25k car, plus taxes, titles, and fees, with $8k down on a 60 month at 4.5% should be around $350 per month. That all goes out the window, of course, if you have lousy credit and are paying 10%+.
8,000 cash car and be done. I just don’t understand why people would pay all that dam money down knowing that’s free money that they are getting. The interest rates alone will be high and then your car insurance will also be high. That’s why the American people will always be a slave to debt because they always want to look rich but broke as hell.
Sadly ... All this is so true and I remember saying this more than a year ago that this was going to be the case... The price of housing went thru the roof and people buying vehicles at such high prices would not be able to sustain.
I bought my house in 2019 before home prices skyrocketed again and when interest rates were historically low. I calculated at current rates if I bought my house at the same original price (it has went up in value over 100k since), I'd pay about $1500 more per month. This is insanity.
First time in a million years, I agree with Adam. Increasing your time frame means you are paying more in interest on a long term. Exactly why you're living paycheck to paycheck with decisions like these. But I also see PBD was trying to make a point that if you wanna afford $575 monthly payment, something has to give and that is increase in the number of payments you will be making.
The only way to appreciate not being in debt and having those payments is to go through it. Speaking from experience made this mistake early in my 20’s and free from it now at 27. NEVER AGAIN.
I know middle class people living at home with their parents who bought a 35k car, 7 year loan, and think nothing of it. They just locked themselves at home for another 7 years.
When they're older and look back at how much that money would have been worth if it was invested in virtually anything but a depreciating asset, they will be suicidal.
@@MrBurgerPal There are USED, reliable cars with available warranties that don't cost more than $20K cash. I have a car available for $9.5K that only has 59K miles on it. The only barrier to affordable financial solutions is laziness.
In Australia where I live it’s a similiar problem but not with cars but houses. People’s repayments are almost doubling once there fixed mortgages expire. FYI in Australia fixed loans are usually only 2-3 years. In other words most are expiring this year
Same thing happened to homes. Prices doubled and interest rates doubled. I've been a Realtor for 20 years, the last two years I've had lots of people calling me and crying because there's nothing they can afford. 😢
I’m incredibly lucky to have been selling Kia’s through this whole process. The higher ups somehow saw this chip shortage coming and were well prepared. It’s been a big struggle and average loans now are 75 months and payments have double on some leases. It’s absurd.
@@onlyme7907 ironic that you said that..... I traded in my 2015 Chevy Silverado for a 22 kia Sorento hybrid s AWD, made 3 payments on it and got 4800 miles....IT QUIT RUNNING. That was may 25th when it was towed in. I got my call today from the service manager that the car is now fixed. I'm still waiting on the lemon buyback check from kia to this day. Apparently, when I signed the legal acceptance letter back in November....it takes upwards of 90 days to get the process completed. Having said that ...my Silverado NEVER let me down and I wish I hadn't listened to my wife and traded it in.
@@johngatsby1473 There are quality issues with all brands, and it really depends on the model and production year. The quality standards are all going down, but there are brands that have more models on the road longer. Toyota and Honda are good examples, but GM is not far behind. They are probably the best overall American-owned car manufacturer for longevity. But their small cars suck. And, in general, trucks often last longer than any other car type. I don't think quality is quite as brand-based as it was in years past. And brands like Kia provide a lot of value and features for the price.
@@joekerr3638 lol, exactly. I have always forced the conversation to total costs, and gods honest truth had a sales lady at a Land Rover dealership raising her voice to the point her manager stepped in and closed the deal.
The way they financially engineer it is by convincing you to get a lease. Ultimately this is a way to rope you in to the cycle of trading in at the same dealership every three years and carrying over your negative or zero equity. But they’re happy to do it because it’s guaranteed repeat business.
HARD FACTS - Modern cars are stuffed with expensive extras. People need basic cars with no electronic gadgets, no power seats, power windows, no tv screens, no wifi, no computer chips, and poof! cars could be made for 20k again.
Thank you. As if in many parts of this nation a cad is something optional. And the used car market was/is just as horrible. So your choice is a payment you can’t afford now or a bad long term deal.
I am a car salesman & have been throughout this whole mess. This February has been the worst month I have ever had in sales. 95% of my customers take out loans for 72 or 84 months. No one gets approved for anything more than that because banks dont like loans to extend that long even for prime customers. The way some people avoid the large payment is make a sizeable down payment. But the people who have money like that laying around are few & far between in my area. So most people just cant afford to buy a decent used car, let alone a brand new car. Most vehicle purchases at my dealership in my area consist of $10-15K crossovers & SUV's with higher mileage & crappy cheap trucks. Cheap is the word. Affordable is the goal. & I can't blame them. Because they are struggling, I am going hungry too. Please vote wisely in 2024 Edit: When you guys are talking about interest rates yes, customers do care about interest rate. But the reality is a lot of poor people have poor credit. I'm not judgeing them it is a viscious cycle & I understand it. But when you have bad credit & you need a car & the only bank that will give you a loan is credit acceptance & they are asking 23% you might have no other choice. You can go buy a $500 clunker with cash & see how far that will take you, never know you could get lucky. I have nothing but empathy for my customers in these situations & when I am getting a loan approved for someone with terrible credit I generally make a mini tort because the dealer has to eat special sub-prime bank fee so that comes out of my commission. I still enjoy helping people get into a vehicle since I do not work at a buy here pay here place so these people are actually set up to succeed & not fail. BHPH is predatory in many cases.
Vote wisely??!!!! Wtf you’re still stuck with that delusion the government actually cares about you and they’re coming to save you? Make more money bro
if people do their due diligence it's easy to find reliable vehicles. consumer reports existed a long time. my 97 honda accord lx cost me 1,450 usd and is running fine for 4 years already. people are usually just unwilling to do their research to best use their money.
I know a guy who sells used cars. His goal is to put you in a car, any car. He hopes it will last for the customer, but if it breaks down, he just puts them in another car, adjusts the payment a little, if necessary, and off they go. He keeps his customers mobile and happy!
@@anemiapwns1 Honestly right now that is a good buy. I wouldn't discourage it. I'm not afraid to tell my customers the same thing if it means I am only losing a $150 mini tort for selling them a crappy used car anyways. The issue is a lot of people have tastes that do not align with their budget. They want or even need a 3 row SUV, but they have a 97 accord budget & get upset due to their expectations being far higher than the reality. Partially due to the fact that $5000 could buy you a hell of a lot more car in 2020 than in 2023, unfortunately.
Come on man; maybe those "poor" people can't do math. Last time I was in a used car dealership; they wanted for me to finance a 12k car for 500/month for 60 months; and i bet you there are a lot of poor suckers who fall for this
Good thing you bought a Toyota.... I'm in the same position but bought in '18. I could sell my Toyota now for a few thousand MORE than I bought it for even w 5 years of miles on it.
@@daniellove162 The motivation behind this bullshit has nothing to do with profit my friend. It does however have alot to do with population control..those people behind all of this are all already extremely wealthy think about it.
Bought my first new car, a rav4 hybrid XLE premium, during the chip shortage caused by covid in 2021. I always bought used cars outright but broke down and decided to get a new one finally. Looking back I did pretty good for being a newbie car buyer. I put about half down, and got an interest rate under 3%.
Be patient homie. Interest will continue to rise but dealerships and manufacturers are going to have to decrease prices and increase production to keep buyers coming through the door. For me at $919/month, my old, paid off car starts looking real damn nice lol! I've owned my current car for 8 years and put 210k miles on it.
@@markcowan3366 definitely don’t do this wtf. Finance finance yeah your lifestyle is finance. If you can’t pay for it in cash why buy it ? Do you even deserve it ?
What's sad is that soo many people buy cars they can't afford for status. Then that expensive car has a high insurance payment too. You can easily have a $1200 car/insurance payment.
Debt in general, be it credit card, car, or personal loan debt, is so ingrained into society that, telling the average person they can live a decent life without debt doesn't even make sense to them. The biggest reason being, the all mighty CREDIT SCORE.
That’s silly, you can build a great score having no debt. Just put regular expenses on a card and pay balance down to zero each month, or nearly every month. It’s what I do and my credit is over 800
I got over $1,200.00 cash-back last year from using my credit card. Paid it off each month, too. I gotta say, that's 1,200 that I would have lost out if I only used my debit card 🤷🏾♂️. Credit cards are great if you're responsible.
This obsession with a person's credit rating is insane. People are convinced that they need to get a credit card to establish a credit rating. What stupid fools the middle class are.
@@eddiekulp1241 thanks for stating the obvious that you’ve got to get the card first. Only our newest generations have the thought they can buy all they see
I am a aircraft mechanic and a shade tree car mechanic. I will drive my paid off car until the wheels fall off before I pay $950 a month for a car payment.
You just saved my butt. Almost bought a car that would come out to about $52k. Would've been a monthly mortgage payment. I definitely feel relieved after hearing this. Thank you.
A wise man once told me, "if you can't afford it, don't buy it" the biggest relief is not having a car payment
And if you maintain your old but reliable car you save big. I am happily driving my 2015 Camry with 105.000 Miles and no issues.
I will only buy a new Camry if the 2015 model had a catastrophic engine failure. With proper care i expect another 100.000 Miles
out of the Camry at least.
The months go by quick. Don’t take on to much
The biggest relief is having money lmao
I purchaded older vehicles with low miles. "Old lady" cars. Lower purcase price and lower insurance cost. Drove one for 12 years. On year 4 with my current vehicle a 2010.
@J Carroll Problem is those cars aren't as easy to find the past few years as they used to be
As a former car salesman I can tell you pat is right people don’t care about the interest rate. That’s how we sold, we’d surprise them that they could finance a $70,000 truck with their $40,000/y pay (84+ months). Those are the same people getting repoed now🤷🏻♂️
Scumbags taking advantage of idiots.
Society pays the price.
Whoa... Now THOSE numbers are absurd. 😳
It’s not that they don’t care, it’s that people are so inept at finance that they don’t understand what they’re getting into. Y’all are preying on the uneducated lol
Didn't car loans only go up to 5 years pre pandemic?
@@johnv6806 No, I’ve never seen it done but I’m sure if you tried hard enough even pre pandemic you COULD finance a car for 15 years lol.
I havent jad a car payment in 12 years. Married my wife got rid of her payment in 6 months and she hasnt had one in 3 years. True financial freedom is no debt
Debt can be a tool to build real NAV
@@Samsonight33 huh?
@@Samsonight33 like i said true fincial freedom is having no debt. Dont need much money if you have no debt. Dont have to jave this job you hate with bo debt.
@@inmate0054 Wow. You've really got it figured out, dont you? I guess all of the billionaires out there that leverage debt as a pillar of amassing more wealth are suckers. Guess you also don't need to be very good at spelling when you have no debt either.
Amen
My mother, “You can want whatever you want, but buy what you can afford.” -Wise woman ❤
Ain’t that right? 👊
Love it
Mine was you can afford anything but you can’t afford everything
@@imkriswithak1135 😊
Right, there are plenty of sub-$15k used cars that will get you where you need to go in comfort every day, if you research which models are reliable and you find one with a solid service record and minimal rust. The repair costs of an older vehicle are much lower than a new car payment, about $50-$150 per month on average.
My first car was a 2008 kia optima, it was $5k with 124k miles. I put $1000 down, financed it through my credit union, 2.99% on the interest rate. My payments were about $90 a month. Drove the car from 124k miles to 250k miles. Made over $60k driving it for Uber too. And I still sold it for $1400 after all.
As long as you claimed recapture.
NICE
Endurance and Grind...I love it...
How much you spent in repairs?
BS! you can’t uber on a older than 10 year old car
If you only consider car payments rising it’s scary but at the same time car payments rose so did EVERYTHING else. When you think about how people afford those car payments in addition to food, housing and utilities, that’s terrifying
Everything went up, except for inflation adjusted wages. Those took a cut. But J Powell will tell you the hot job market is responsible for inflation 🤡
EXACTLY!!!!!!!
We have a long road ahead. Prepare accordingly.
Think of a $75,000 household income and divide it between a husband, wife and 2 kids. I don't see how they can afford a middle class lifestyle---unless they live in some rural part of America where the cost of living is very cheap. My household income is $60,000 with 2 adults. We drive very cheap cars.
And they want us to come back into the office when I’m working a second job after my wfh shift… without a pay increase
Hell no
Its absolutely true, most auto shoppers are focused only on the monthly payment amount. One of the first questions a dealership sales rep is what kinda monthly payment do you want, but never tell the customer about the interest.
Realizing that some people are just learning about car loans right now, from this video, makes me appreciate my Father even more. Thanks Dad.
The best car to own is a car you can afford
yep!
Don't borrow money for a car - ever! (unless your business makes profit from the car and can expense the loan payments against taxable income).
Or just maybe common sense... Who takes out a loan on a depreciating asset? LOL
@@allyfizzle403you say depreciating asset as if the average person even knows what am asset is, much less one that retains value or increases in value.
Common sense comes about from people being commonly taught something. Money is intentionally not taught in this society unless one takes the incentive to teach themselves. The whole monetary system is dependent on people being dumb.
@@allyfizzle403many people get a car note because they need to get a car. Which is a need in today's society, they arent worried about a depreciation asset, they are worried on how they will get to work on time and drop their kids off at school.
Just made my final mortgage payment today 🥳
🎉🎉🎉🎉 congratulations that’s amazing
How many years? 15 or 30? Congratulations!
30 yrs, thank you very much 😊 🙏
Congratulations!!!
Congratulations!!!
"Qualified buyers are decreasing"-Patrick is spot on!
There is a flaw in PBD's argument and here is the correct one: He incorrectly assumes that the 60% increase in car payments has to be matched with a 60% pay hike. This is a false logic because the salary someone makes in 2023 is $78K which is a % increase from $64,000 in 2018 whereas the price of the car went from $32,000 to $46,000 which is sufficient to cover the increased monthly payment for the car
@@user-ml6jb8hr4i no what you don't understand is that 78k increase number in 2023 is fools gold because of higher inflation your purchasing power is much less today 🤔
@@user-ml6jb8hr4i everything has gone up, literally everything, the dude isn’t incorrect at all.
Banks aren't checking credit ratings anymore anyway, they're giving out loans to pretty much anyone.
@@user-ml6jb8hr4i you have no idea wtf you are talking about. obviously.
I'm still driving my 1997 F250 XLT HD 4×4. Paid 6k cash 10 years ago, and I've never had a car payment. That truck brand new off the lot was $25,900. And I still like mine more than the new ones.
I work in lending and we are seeing a lot of 96 month loans. That's 8 years of a car payment. Absolutely wild.
I once paid off a computer in 1 year. It was zero interest so I thought why not. After paying less than $100 per month for 12 months I was happy to be done, can't imagine paying $600+ for 8 years for a car. After 8 years that car is going to be worth less than 1/2 of starting price, if it's not wrecked completely.
That's pretty scummy, but the people that sign up for that are infinitely stupid.
@@mplslawnguy3389 we're a business at the end of the day. If the consumer is dumb enough to want it, we'll sell it.
Do you think alot of people do that to get a lower monthly payment so they can pay extra of necessary? And just incase they can only make the payment due it wont be too high?
@@hebrewharv8018 well they apply for these extended loan payment schedules to bring their pti down enough where we'll approve them. Its mostly higher risk borrowers where they're interest rates are fairly high. If they went with a typical 60 month loan on 35k they'd be playing close to $900/month. We LOVE these loans because we milk the interest out of you but most people don't think that way. They just see a lower payment and sign the paperwork
Talked to a local repo guy yesterday while he was working he said they could work day and night and not even make a dent in the outstanding requests. He also said he has never seen anything like it and he has been doing it for 20 years.
Must be different in Toronto. Cars are in demand and I don’t see price’s coming down too much
The data speaks for itself, but interviewing people on the ground actually participating in the data adds a lot of weight. With the market right now, when I drive I just guess how much people's payments are looking at their cars. Such a waste. Especially when it's not a Honda or Toyota.
@@Lifeisapartydresslikeit You see why they're in demand. People who can't afford them buying them at inflated prices. Then this happens.
this is what happens in recessions.
Good time to start a tow truck business huh
We own our own business and haven't had a car payment in 5 years. One of the best financial decisions we have made.
Good for you! I am an employee :(
But have owned both my two cars out right for years now
I would like to know what the average interest rate was as a whole. 16% wow
Half kidding when I say this but is that because the business is paying for it now? Lol jk
Business owners know the cost of money. My 08 Truck, mu 08 Mercedes, paid cash used. No payments
I’ve never had a car note my entire life
Finished paying a $400 car payment 5 months into covid. After that I felt so good to start saving more money considering how this pandemic would be. People don’t understand how much a relief it is to be debt free even if u make good money.
You can weather any economic storm, if your debt free.👍 Currently, we are in an economic 💩 storm and it's going to be ugly.
I'm not a bot or anything but if I were in your shoes I would learn about crypto and instead of simply saving that $400 put $300 into Ethereum every month and get as much as you can while it's under 2k before the next big run up comes. I hope this message helps you random person on the Internet.
@@kron9597 Lmaoo
ain't it wonderful?? lol
Some of those savings will go back into major car repairs at some point. Then more savings into a down payment for a new car. The cycle never ends. You get short breaks or the illusion of freedom.
I sold cars and its wild the people that come in and actually buy from a dealer. Even my coworkers thought i was wild for driving cash cars but i was always hearing about them stressing over bills. I always did fine because i was working for commission and never wanted to put myself in a bad spot to begin with.
Good for you!
My man. What’s up with dealer websites??? They are loaded with fucking pop ups and chat windows. Are they purposely trying to get you to leave the website? Lol. I can’t stand them.
@@tdz69 lol usually they are just simple virtual tools on the manufacturers site that just let you look at different options. The goal of the websites is for you to put your information so a local dealer can begin to harass you. Try just looking directly at dealer inventory sites and avoid putting info down.
As a young guy who didn’t know much about interest rates and such. Went to a Toyota dealership trying to buy a 2016 Camry, the guy finessed me and told me the bank didn’t want to give me the loan but would for a 2019 Camry. I took it and I’m paying $800 every month. Have a year and three months to go. Worst mistake I’ve ever done and I’ve learned my lesson.
I'll make u happy buddy ur not the only one they put me in a mercades lmfao 😅I played my self
I mean, at least it's a Toyota, should last you a very long time
I remember business class in high school. The very first day, the teacher got excited, walked over and swung the door shut and said, "Today, were going to learn all about car lots".
I am 73 years old. As a kid, my family always drove used cars. It wasn't until I was in high school did my dad ever come home in a new car, and then, it was a Rambler. My dad was a Senior Research Chemist for The Eastman Kodak Company in Rochester, NY. He was paid $12,000 a year. We owned a home, had a boat, took vacations, never wanted for anything (3 kids - stay at home mom). That Rambler cost over $2,500. Even then, cars were a big ticket item.
@@SoothingTranquilVibes Here, here!
I'm from Rochester New York and known know lots of people who worked for Kodak
My dad always bought a Rambler too. lol
Easy because the car cost only 10% of annual salary
Now cars cost 100% or more of salary
That was a cheap car for how much he made
I lived for a long time with no car payments and it made a lot of sense. It allowed me to get to the point that I make more in just dividends than my house payment would be. I now allow myself one car payment at a time.
Your always consistent and relatable. I’m on the low income side of life. 3 years of sobriety starting over. My credit score went from 400 to now 700. I’m paying my vehicle off this year. So I have been learning a lot from your content thank you for doing this.
Good job, keep it up
Respect, keep at it. We walk with you in good health
How did you get your credit score fixed?
@@StrongerThanBigfoot basically living off cheap home made food. Paying off debts with every extra bit I had. Not going out to restaurants. I haven’t even been dating. It’s finally after a year and 4 months paying off
Honestly listening to this channel and others. And actually doing what they suggest. That’s been a tremendous underlying force for my commitment to becoming successful
✌️
My father has sold cars for 40 years and I sold cars with him for one year 20 years ago. Let me tell you and it’s still true to this day, people only care about what their monthly payments are going to be. When a dealer hears a customer ask that question they also hear “CHA-CHING” at the same time!
my father explaind to me this way.......say your boss cut you a check for entire years salary say 50k.....would you go run down to the dealer and buy a car for 30k ?? of course not because you would have no money for food and shelter after... if your making 50k you should be driving a 10k car max....
@@workingshlub8861 I hear you, how about if you don’t have the cash then you can’t afford it! Only finance cars and homes if its going to generate cash flow!
@@workingshlub8861lol, nah 1k max
Jeep can’t sell a car. They are ranked last in reliability
I’m a nurse and I haven’t got an annual raise in two years despite being employee of the month. Being thrifty and playing the cash back credit card game has become a necessity.
You need to travel nurse.. 2 to 3k a week
Sounds like you need to test the market and see what other places will pay.
@@thethinkingmansgame5050 2-3k is low. 5k with housing in the Northeast.
I was just making a suggestion
@@thethinkingmansgame5050 I would if I didn’t have my kids. Maybe when they grow up and move out. I appreciate it, brother.
Your analysis is spot on about the average person & way they’ll look at it, it’s about the payment. Same is true of home mortgages.
Yep. I’m in the car business and have been through the whole pandemic. It was wild. With Honda and now Mercedes. I feel bad for the people who were buying. I am in accounting and the amount that people were overpaying was wild. The people who got the best deals were the ones who did a lease buyout. They even restricted those after about a year.
Hi Sarah, I have some cash to buy a car. Would you recommend to wait a couple months until prices go down or is it better to buy right now?
I got a bronco sport exactly 1 year ago and it was significantly more to lease it than finance it
@@victorecheverria9269 I am in the same position, not worth it to be honest with you.. if you have the opportunity I suggest store your value, not sure what role transportation plays in your life obviously
@@johnv6806 A lease buyout is different from getting a lease.
Prices are never gonna go down buddy. Its only going to get more expensive from here on out.
Why don't you just buy a used car and fully pay for it with your saved money? Last February I bought a 2000 Honda Civic EX with 168,000 miles. Paid $1,200 with insurance. It's beat up but hasn't given me any problems at all. It has 202,000 miles now.
The broad-based Standard & U.S. consumer confidence has sunk to record lows, thanks mainly to inflation. Retail spending, home-building, and manufacturing output all declined and those who drive the U.S. economy, are starting to cut back on discretionary purchases, such as appliances and services. Regardless of our market conditions, however, we should continue to promote savings and smart investments.
There is very critical situation for US people and other countries people. The global economy is going to very poor situation. Inflation and unemployment are on the rise۔
There are several reasons I have been investing under the counsel of an advisor which are someone who sets asset allocation that fits my tolerance and risk capacity, investment horizon, present and future goals ‘’Eleanor Annette Eckhaus’ has provided all that and I don’t want to go into ROI on a public space.
There is this podcast i was listening to and it said something venturing within your tolerance and risk capacity, see you mention it again got to me.
What the pandemic showed is that people are a lot more secure if they have an emergency fund and a financial plan; one with a Plan B and Plan C. Also the war in Ukraine are both wake-up calls that stock market crash can happen abruptly in a recession and inflation may rise. Hence, everyone needs a crisis investment plan...
Thank you roddy for this tip. it was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her résumé..
The worst thing about this all, 80% of the time purchasing a new car is unnecessary lol
People do it for “appearances”
Yes sir.
Yup. I bought a 2012 ram in 2015 it’s Deisel, only had 40k miles on it and I paid 40k for it. A brand new one three years newer was almost 80k! I’m still driving it, it’s got 82k miles on it now and it’s paid for!!! 👀💪🇺🇸💯😎
I'm looking at buying a vehicle soon and a 5 year old model with 100k miles is only $5,000 cheaper than a new car. so what's the point of buying used?
@@unknownsource4359 you buy a brand new car you get a warranty you buy used one get it as is
Pat is cookin' this episode. Seems like he's done a bit of research after the past few interviews that he's had up here. Wages are not going up. Prices on everything has always been going up and has far outpaced the increase of wages. Thank you for bringing it to the forefront of the conversation Pat.
I have a degree in finance and worked very briefly at a car dealership. The biggest problem I saw was payment shoppers. The only four components relevant are the interest rate, the number of payments, the principal (or price of the vehicle), and the monthly payment.. Dealers tweak every other variable just to get the monthly payment acceptable to the buyer. Never mind the fact that they probably just added two years to your loan, at a much higher interest rate then you may well qualify for and certainly did not lose any money on the car price itself, despite what they say. My simple advice: go online and access an auto loan calculator. Plug in the numbers- right in front of them, and if they don't add up, something is very wrong.
Note: the down payment will, or should, reduce the principal used in the formula.
After being ignorant to that for years the last 2 cars I purchased I went to my credit union first to secure a loan that I found acceptable within my budget. The interest rate was far lower than any dealership would have given as they get $$ on the back end for jacking the interest up.
Great advice to get someone ran out of a dealership using “chaos” math
The problem Ive always had at dealerships is I come in pre-approved for the vehicle I want, at the price Im willing to pay. They hate me because I know what the vehicle is worth and they cant finesse me. Ive walked out of dealerships because the salesman and manager arent willing to come down on the price, and they cant make extra money via financing. They get really pissed when I tell them the only thing I care about is the principle because Ive already got a loan. Monthly payments dont matter, interest rate doesnt matter, and duration doesnt matter, just the price of the car lol.
Its crazy that in 2023 people are still payment shopping, I bought my first car in 2018 and literally the advice I kept seeing on the internet is not to payment shop, I thought it was common sense smh
Buy used.
No car payment is the best way to go. My last car had no payment, and it was so nice to not worry about it. Unfortunately, I had to get rid of it and didn’t have cash to pay for a safe and reliable used car because of what used car prices are now. Car prices are just insane.
actually best deal out there for bang for the dollar is toys like mine
@Dan. a.k.a.bradpitt please elaborate!
Im a cash guy. If you are ever out of work you never have to worry about a bank repo'ing your vehicle, or making car payments.
if your commute is not far and your in fair shape try a bicycle or ebike
Pat is absolutely right. Most people only care about how much their monthly payment is. When I bought my first new car in 1995, the sales person asked me how much I wanted my monthly payment to be. I told him that I wanted a 36 month loan not a 60 month. He kept telling me what my monthly payment would be so much lower if I did 60. I said, “I only care about how much the bank is making off of my loan in interest. I’m not giving the bank anymore money than I have to.” He was surprised. My eyes are always on the interest when it comes to loans.
Standing 'O' for Linda Sun.... smart cookie
It's also important to ask the total price. I went in for a new phone the other day and the lady told me the monthly. I asked her the total cost of the device, and she repeated the monthly and looked at me like a fish. Like, lady, how much does the phone cost? 😂
@@tylersingleton9284 Well done! Those that don't understand that are the ones that have caused a 50% increase in new vehicle prices over the last 3 years.... they just don't focus on the MSRP or interest rate.... just that one magnitude (monthly payment)
I personally am more focused on the opportunity cost. if you paying x % of your income to a reoccurring bill. your income and ability to utilize it in any other way is stunted until its gone. if you're spending 1000 a month on car payments. that's 12k less in getting ahead every year.
Same here Linda. When I was 23 I was looking at new corvettes. They did all my paperwork and come back at 11% interest. The payment was 1100.00 a month. And I knew I could afford that but I'd be barley scraping by. Went back to the dealer a couple months later I dealt with a salesman and the manager. I bought the car at 0% interest and a 900.00 a month payment. And I saw the first salesman when I was doing the paperwork for the car. He looked pissed. This was in 2003. I know longer finance cars. It was a young and dumb kinda thing.
Seeing this really makes me appreciate owning my car, just a humble 02 Honda Civic ex but it beats being in debt for the rest of my life. Being a private reptile breeder is my only income and there's only such a slight margin for profit and that's taken up usually by adding new animals or traveling so I couldn't imagine how much harder it could have been with hefty payments like that. I can only imagine what it's going to lead to.
Honda and Toyota….you won’t go wrong
I had a 98 civic dx and a 2003 lx (destroyed by hurricane Sandy, recieved 500 more than I paid from Geico after using it 4 years) and a 2005 ex limited edition. Those cars were great, the first one had no ac or antilock brakes but the mileage was in the high 30s. Old school Hondas are the best. I live in PH now and mostly drive my Honda 110cc scooter, $4 to fill the tank. Bought it new for $1,150 cash 4 years ago. I go to the beach and play tennis at 45 because I never wanted a BMW. A dream car is the one that will lead to your dream life.🤙
My HS history teacher once dedicated a day to car finance and why you shouldn't buy brand new off the lot. Learned a lot that day, and it has since deterred me from even looking at new cars. I'm happy in my late 2000s car for now, and when Im sick of it ill be buying used again most likely
Then all the used dealers jack the price up.
Used car prices were bad back then and worse now. Sometimes new is better. For example a basic trim sedan, under msrp, and financed through a credit union.
@@enriqueb4412 from what I understand, car makers are or have moved away from entry level models entirely.
@@DomT0311 buy from owners rather than dealers
True. In 2019 we bought a 2017 Volvo S90, certified pre owned, with only 6000 miles on it. Paid only $35k, about half of what a brand new S90 would've cost. Best car purchase I've ever had. And with a better warranty than you get if it was new. Only problem today is you can't find many CPO cars because nobody is buying right now. I have no idea how many dealerships are going to survive, let alone the manufacturers. Got a feeling we're going to see some major downsizing in the auto industry soon.
Was looking to buy a car 3 years ago planned on just financing with 0 down but my older brother convinced me to at least save up 40% of the car, while saving up a year later ended up finding a 2015 Kia with 65k km ended up buying it for 8k (which was less than what I saved up) BEST advice and decision I made especially after seeing my friends car get repoed
To bad you bought a foreign piece of crap. That has a good chance of catching on fire, that’s the problem with ppl like you buy American. If we all bought American cars they wouldn’t be so expensive… unreal
Last new car i bought was in 2017 and dont plan to ever do that again. We were able to pay it off in 2 years and havent had a car payment since.
Me too, I bought a new truck in '17 and paid it off very quickly. Never again though. What I paid seems cheap compared to now. No way in hell am I dropping $50K on a vehicle.
8 years ago I bought a house, the payments were $900. I just sold my house for double what I payed, the new payments are $2000 a month for the new homeowners, a 30 year old house.
Anyone else notice PBD hardly ever has commercials? Love these guys. They are truly elite
Did you notice how dude was quick to call people idiots for not knowing or wanting to learn. Did you see how Patrick corrected him for saying that horrific statement?
i use brave no commercials
Premium gang
@@markdailey8526 yep, it was a totally tone deaf comment
I love being able to afford youtube premium 😂
Pat your 100% right if people actually cared about interest rates instead of the payment each month places like rent-a-center and Arron’s wouldn’t be in business.
Predatory lending is like Apple pie.
And all credit cards
I worked at a rent to own, soul crushing. I couldn’t sell to people because I was like you are willing to pay 150 bucks a month for a 4 year old tv for 18 months when you could save for 3 months and buy it straight off. Only 39.99 a week!
@@DC-bx8ww if you think that’s soul crushing, do a deep dive on the cash now places giving people $5000 loans around Christmas for 46% interest rates… ive heard stories from an employee of absolutely devastated people signing for near 50% interest on a loan they literally will carry for the rest of their lives if their situation doesn’t change
@@Okeen12 yeah I've said they should make it illegal to do rates so high.... They prey on the poor who are at hard times and then wonder why ppl have to rob gas stations and steal.
PBD. Congrats on 4M. Love your show.
This
I got lucky to have gotten my house in September 2020 and then had to get a new car in March 2021. Everything started going crazier shortly after that. All my payments are locked in at low interest and I bought what I needed instead of all the wants. It took a couple of years to build my credit to get there but glad I pulled the trigger .
I feel bad for others that can’t take advantage of the financial situations that were available. Hopefully everything goes better than what it looks like.
But do u get bitches
Three years for a car payment was the norm a decade or so ago with 0% interest. Crazy days!!!!!!! I'm with Adam. Interest matters! My Uncle taught me a simple lesson many years ago. Interest in your pocket great, interest out of your pocket terrible. Live by it, and you will get ahead.
I have a 3 year note at 12%. Monthly payments are $177 but I’m not going to take 3 years to pay off the rest. It’s 4k left
@@eligreg99 and what are you driving a 1988 Ford escort?
@@keeganrobbins-pu6cb A 2013 Chevy Malibu with 105k miles on it. So far I’ve had to replace the wheel bearings and do an oil change but that’s about it. I thought it was a pretty fair deal at the time for 7500 with a 3500 down payment.
@@eligreg99 yeah see the difference is your talking about a car for 7500 vs what the video is talking about $40000 and ^ big difference
@@keeganrobbins-pu6cb Why would someone be surprised about a high car payment and interest on a new car?
“I’m still paying for the Eclipse” HILARIOUS!!!!!
I lol’d too
I came to say the same thing! 🤣🤣🤣
Pat is so right about those. I moved to the US in 2020, bought a cheap car and had to spend all kinds of money on it, 3 weeks ago I bought a car and my APR is 19%, couldn’t get any better rates because im new in this country and I have no credit history. I care about the APR but I needed the car to commute to my new job which is one hour away, hopefully next year I’ll refinance but he’s absolutely right, people care more about the monthly payment.
I got in same ordeal with 15.9% paud payments for 6 months and the value has went down a lot whereas been paying so much interest now underwater to try to refinance even tho got higher credit score. Was told if paid 3k on car, credit score was good but too far under water to refi to get a lower apr
19%. You're getting taken to the cleaners
@DomT0311 The guy clearly he said his credit history is non-existent and he really needs the car and he already bought a used car that ended up being expensive. Sometimes you are smart enough to save but you just can't due to circumstances.
Damn.. I just bought a Sierra 2500hd with 5% interest
I just bought a car over the weekend. And the question i was consistently asked is "what do you want your payment to be" and luckily im a little smarter than that but i definitely see how it gets people. I shut down several lots by saying i wouldnt pay more than xx total, and needed a good rate.
Haha. I just inquired on a used car off of AutoTrader. Dealer got back to me. Jessica asked me similar “what monthly payment are you looking for? Do you have a trade in?” Two questions, if answered, will benefit the dealer and not you. I told Jessica I do not have a trade in and my first priority is arriving at a sale price for the vehicle after I see it. Jessica apparently fell into a hole as I have not heard from her. I hope she’s ok. Lol.
The worst part is some lenders will bait you into setting up your monthly payments on auto-draft from your bank account by offering a small “discount.” What they don’t tell you is that the loan interest is front-loaded meaning a larger portion of your monthly payment goes toward interest and less toward the principal balance. So the entirety of the loan is dragged out longer and you end up spending more WITH that measly “discount” than without it. This is especially true if you choose the minimum payment amount, like most people do.
The interest is front loaded either way, with or without auto payments
This is pretty common knowledge. If people don't know it's their own fault.
@@jerryb5631 well damn, Jerry. You sound exactly like Adam 🚩 People who grow up in households with poor financial hygiene likely don’t have access to what you consider “common knowledge.” Please enlighten us as to where one would acquire this knowledge to avoid learning from experience and piling on more debt during the process.
@@kurtnewman7182 My point is really less about the interest structure. It is more about the way they use human behavior against our own detriment to make a profit beyond what is necessary. Offering a discount to influence consumer behavior whilst knowing the likely outcome is in their favor. They clearly know that most people (who are more concerned with that monthly payment amount) if given a choice will choose the minimum (which is now even lower with said discount applied). They also know once you set up auto draft, you are less likely to go in and make adjustments for each payment when you have a few extra bucks to spare. That’s what they are banking on…
@@jamiejohnson1398 everyone have internet shutup
My car is from 2003, 99k miles and still holding strong! Meanwhile, everyone around me is getting new cars, and asking "man when you're going to get a new car?"
Answer them back :Your car is not ''new''anymore....When are you going to get a new car ?
bro! i hear that every month “dang you still have that ‘09 babymomma honda fit?” like yea & the pink slip😂 there over here making 500+ payments
My jeep is a 92 at 280k😅
2007 civic si, 285,000+ miles and counting
2004 Subaru outback rebuilt motor here. Got it for $2,500 paid cash. Pre covid by 6 months. Still runs great. No way will I ever get a bank loan for a car for rest of life, have saved enough for a decent used car once mine dies.
I couldn't agree more. I've been thinking about this same stuff for the last 3 years wondering how the F people are buying new cars and trucks. The other piece of this is showing what you pay in interest over the course of these loans. I know you see it on the calculator but to emphasize how much that interest rates will cost you over the course of that loan. Great stuff keep it up on the channel!
Same dude, I have friends who are way more "broke" than me, driving $90k-$100k new trucks...and I cannot physically comprehend how they're able to do that...these are "young" kids too 24-27 years old.
People used to lease cars instead of buying with a payment of around $199/m vs $500+/m when fully financed. But now, the interest rates for lease are way more than for financing which makes the payment the same.
I knew this was going to happen, so I refinanced my previously leased car last June, 7 months before lease maturity with 1.7 APR. I also made sure my mom got a car as well with the same APR. Best decisions ever!
Now buying some gold and I’m ready for what’s coming!
The craziest thing is we used to have bare bones stripped back versions of specific cars for 10k roll down windows no AC etc... we had a variety. Now everything starts at 20/25k with interest trucks are minimum 50k there is little to nothing in regards to competition.
It’s awful. And the more shit the cars have the more shit breaks
@@Billy-rq9hs Big facts my grandp tells me that all these fancy cars are just big waste of money, you just need a good reliable car to get you from Point A to Point B
Yup better off getting an pre 2010 car and just maintaining yourself these modern cars require so much to upkeep you cant work on them yourself anymore especially the electric ones
What Adam started to say was: you cannot get a 108 month car loan for the same interest rate as a 60 month loan. When loans get longer than 60 months, bank added .5% or so for every extra year.
As they should lol
That’s not true the longer the note the lower the interest rate is.
Which they really have no reason to do that, it's just another tactic to make it even more difficult for the customer.
Dave Ramsey might have a heart attack is he sees this
This would be a great topic for his show.
😆 🤣 😂 😆 🤣 😂 .
Dammit..
Ramsey has been preaching sensible spending based upon Interest rates. People should be paying CASH for depreciating assets - NEVER BORROW.
Found ya! The Dave Ramsey 🍆 rider is always in here somewhere and I found ya!
@@TopVillain Ramsey is a Fiscal Conservative that is worth closer to $1BIL than PBD can even dream-of.
I almost made the mistake of buying a new truck half way paid in my current truck (Toyota Tacoma)fully loaded with all the bells and whistles 600 monthly pmt at 2 percent for 66 months. Was going to trade in was not getting much for trade in and my new truck pmt was 900 with 5 percent for 72 months for a Toyota tundra mid grade nothing fancy. It’s good to watch videos like this it opens your eyes for mistakes that might do in life.
Adam has never been in a position where he’s struggling…if a person has to get to work, they get what they can pay for…been there done that…now everything is paid for and I’m going to drive my car until the wheels fall off! 😊
Yeah that statement rubbed me the wrong way.
Right...he's obviously never been in a situation where he didn't have the luxury to worry about turning down a car due to how much interest would be paid. When you NEED to get to work etc you get what you can get to survive and worry about the rest down the road. The only thing that can be done is educate yourself beforehand to escape becoming a victim.
Totally agree. His comment came off very much like Kim Kardashians "work harder" statement.
Just buy a 500€ car lol
Big facts. You also have the people who are knowledgeable on personal finance but make decisions based off of emotions, or obtain satisfaction through material items.
It’s so true what Patrick says most people look at the payments per month and don’t look at the interests rate talking of experience l remember when l bought my car the interest rate was 20% and my insurance company told me why l bought a car with the interest rates that high but l didn’t really know or looked into it because l needed a car
I thought it went by credit score
You are 100% correct, the average family is not thinking about how much they pay in interest, they are only looking at the monthly payment they're making and if they need to lower the monthly payments they are ok with increasing the number of payments to be made. And the sad part is they end up grossly overpaying for the car (a depreciating asset) by the time they've paid it off. And if they have a 72 month or 84 month plan, by then the car is prob worth 30% of its actual value (not based on inflated value). if things normalize in a few years, let's say the Honda Accord goes back to $33,000 from $38,000. That means the buyer just lost $5000 on his purchase not to mention the insane interest amount they paid on $38,000 loan. DO NOT buy a car unless your livelihood depends on it.
It's been a long time (years) since I've had a car payment but I still remember that feeling the week the payment came due. Stress and worry will shorten your life.... I couldn't imagine what I must be like to have a 7 year auto loan....
My wife and I did the math and we can buy a condo cheaper than a new car. So now we’re starting our journey into becoming landlords.
Lmao where in Chicagos ghetto just stop it
Don’t be a leach either. Don’t take advantage of working class families who are low income and charge them astronomical rent for a shoe box apartment either, just so you can maintain your lifestyle.
@@Bloom2Grow working class aren’t low income but yea ok! Sorry McDonald’s and dollar general aren’t working class
@@Hamasisfilthytrash wrong!!
@@Bloom2Grow prove me wrong!!!
Thank you for addressing this. Auto affordability, or lack thereof, is becoming more and more mainstream by the day. I watch several auto market channels, and see what is happening. To make matters worse, auto manufacturers such as GM are holding back some truck production to keep inventory low so that prices stay at the current profit margins. Even worse than that, many new car dealerships are still marking up over msrp. When one channel host ask ed his audience, "Who is buying new trucks at these high prices", in that case F150's, and F250's, he answered himself. He said "No one is! That's why you're seeing rows and rows of new trucks covered in dust!" They are no longer the working man's truck. Neither is Ram, because Stellantis is also increasing prices.
The fact is dealerships don't even want to sell a car to a person paying cash.
You make an intention you will be financing through them. Then at the last minute you surprise them with a credit union check and outside cheaper financing.
I just went through their lender and then paid it off in the first month.
Just finance it and pay it off the next day, it's not that complicated. Everyone knows they don't like cash, they get kickbacks from the financing companies that operate out of their dealerships.
If you have cash, why are you at a dealer in the first place?
@@muskaos
To get a car lol
This is a great point! I got a 2020 4Runner during the pandemic. Its my first new car. I was debt free, and got the OTD price of $41k. The finance charge on my 72 month loan is 3.23% but I'm keeping my credit going by having a loan. Anyway, it will be paid off this December by making double payments. I plan to own it for the next 20 years and only put maybe 12,500 miles on it so far. Get out of debt people and live like no one else so you dont get caught in the future storms that surely will come!
Do not overlook the $3,590 taxes and fees due upfront on the "no money down" deal.
You tube blocking comments again I see
Dealer robbery
Na, just roll it into the loan! What fools people have become.
I explained this to my wife but she was adamant she wanted the car. After 2 months of trying to explain it to her she still didn't get it. Anyway she ended up buying the car and now complains about the payments and duration. I have now banned her from any and all financial decisions. I make all the financial decisions now on my own. I think it is just emotion that ends up selling the car.
“Banned her” 😂 that’s funny. Whoever’s more financially knowledgeable in the relationship should def make those big financial decisions
give it up to the bank. you CAN do that. it will release your debt and the stupid decision.
Happy wife, Happy life
Man that sucks when couples can't be on the same page. It hinders growth to wealth. Sell the car and get something for cash. Save up for the car of your dreams but pay cash. 💰
@@Ocean_breezes
Money in the bank...
Happy life AND happy wife.
I only buy $3000 cars. They get older every time... And I learned how to turn a wrench. But they always stay the same price. I've had the same car now for 4 years. And I haven't had a car payment in over 10 years
"You'll own nothing, and you'll be happy"
Via
Property tax
Income tax
Insurance premium
And the govt who enforces them.
I paid $27,749 for a used 2018 BMW in 2022. It only had 20k miles on it because it was a lease, looked nearly new, and all the service was performed at the dealer (so far as I can tell from maintenance records). I know that's a lot for a used car, but was the KBB and many people were paying above market value because supply was down. This was in October of 2022. I passed another dealer who wanted $30k for the same car with even more miles, and found lots of sellers online asking even more than that. I felt like (given the then state of the market) that I got a fair deal.
Damn, so glad I have 2 more left on my 2014 explorer. Still runs and looks like I bought her yesterday.😁 I'm keeping her for life!
Good 4 you! 😀
Bought my 2013 ford explorer cash and enjoy no car payments. Curious to see how long the car will last
@drew you are very smart. Yep, keep her for as long as you can.
Should have got a 4Runner instead lol
Thankful and grateful there are thinkers like you out there!
This could probably be the realest podcast out right now.
My biggest regret was allowing my dad to “help me” by putting $8k down on a $25k car when I had no savings. I was spending $500-$600 a month while I was making $2600 a month from my job. I couldn’t afford anything else because a third of my money was going towards the damn car.
Yeah that's not cool at all. For $8k he could have bought you a whole truck but some people have an ego thing and can't stomach being seen in something too old and used.
My first car was $1K paid in cash. Had a hole on the bottom the size of a dinner plate that was fixed with a welding to pass inspection. It lasted for 4 years until I traded in with my first job out of college. Paid it off in a year to earn some credit. $8K can net a decent car. But, you’re lucky to have a dad that can give some money.
Yeah sounds like he wanted you driving a status symbol so he could brag to his friends.
My family tried everything to persuade us to not get a car loan
That math doesn't make sense. A $25k car, plus taxes, titles, and fees, with $8k down on a 60 month at 4.5% should be around $350 per month. That all goes out the window, of course, if you have lousy credit and are paying 10%+.
8,000 cash car and be done. I just don’t understand why people would pay all that dam money down knowing that’s free money that they are getting. The interest rates alone will be high and then your car insurance will also be high. That’s why the American people will always be a slave to debt because they always want to look rich but broke as hell.
Sadly ... All this is so true and I remember saying this more than a year ago that this was going to be the case... The price of housing went thru the roof and people buying vehicles at such high prices would not be able to sustain.
9:23
"We push it every morning when we come here!"
LMAO
Great spark of humor. Love it. Feels like I'm sitting and chilling with my friends 😊😂
I bought my house in 2019 before home prices skyrocketed again and when interest rates were historically low. I calculated at current rates if I bought my house at the same original price (it has went up in value over 100k since), I'd pay about $1500 more per month. This is insanity.
WOW!!!
This is good information for the public, but sad at the same time
First time in a million years, I agree with Adam. Increasing your time frame means you are paying more in interest on a long term. Exactly why you're living paycheck to paycheck with decisions like these. But I also see PBD was trying to make a point that if you wanna afford $575 monthly payment, something has to give and that is increase in the number of payments you will be making.
Patrick is regurgitating nonsense that we all have known for years, dealers have always done this, overpriced vehicles and overpriced service.
The only way to appreciate not being in debt and having those payments is to go through it. Speaking from experience made this mistake early in my 20’s and free from it now at 27. NEVER AGAIN.
I know middle class people living at home with their parents who bought a 35k car, 7 year loan, and think nothing of it. They just locked themselves at home for another 7 years.
When they're older and look back at how much that money would have been worth if it was invested in virtually anything but a depreciating asset, they will be suicidal.
@@JonnyBeoulve what if they need the car to earn income? The $5k cars have their own issues, buying a new one every few years adds up
@@MrBurgerPal Buy a 12,000 used Lexus. Problem solved.
@@MrBurgerPal There are USED, reliable cars with available warranties that don't cost more than $20K cash. I have a car available for $9.5K that only has 59K miles on it. The only barrier to affordable financial solutions is laziness.
@@MichaelJames-lz7ni what make is that car?
In Australia where I live it’s a similiar problem but not with cars but houses. People’s repayments are almost doubling once there fixed mortgages expire. FYI in Australia fixed loans are usually only 2-3 years. In other words most are expiring this year
So if you mess your credit up and your loan expires what if you cant get approved for another one? You just lose your house ?
Car payment is a fun exercise. Now do the same exercise with groceries. I'm guessing that's also at least a 60% increase in the last 3 years.
About 10-20% depending on item.
Eggs tripled in price same as milk
Same thing happened to homes. Prices doubled and interest rates doubled. I've been a Realtor for 20 years, the last two years I've had lots of people calling me and crying because there's nothing they can afford. 😢
I’m incredibly lucky to have been selling Kia’s through this whole process. The higher ups somehow saw this chip shortage coming and were well prepared. It’s been a big struggle and average loans now are 75 months and payments have double on some leases. It’s absurd.
The KIA boys are still Goanna get ya
@@onlyme7907
What kind of Kia?
I was looking at the Sonatas.
And Chevy Malibus.
I wish the Toyota TRDs were awd cuz I would get one of those.
look at nation wide repos right now its insane. if people wait a year cars are going to sky dive
@@onlyme7907 ironic that you said that..... I traded in my 2015 Chevy Silverado for a 22 kia Sorento hybrid s AWD, made 3 payments on it and got 4800 miles....IT QUIT RUNNING. That was may 25th when it was towed in. I got my call today from the service manager that the car is now fixed. I'm still waiting on the lemon buyback check from kia to this day. Apparently, when I signed the legal acceptance letter back in November....it takes upwards of 90 days to get the process completed. Having said that ...my Silverado NEVER let me down and I wish I hadn't listened to my wife and traded it in.
@@johngatsby1473 There are quality issues with all brands, and it really depends on the model and production year. The quality standards are all going down, but there are brands that have more models on the road longer. Toyota and Honda are good examples, but GM is not far behind. They are probably the best overall American-owned car manufacturer for longevity. But their small cars suck. And, in general, trucks often last longer than any other car type.
I don't think quality is quite as brand-based as it was in years past. And brands like Kia provide a lot of value and features for the price.
This is exactly why one of the first questions a dealer asks you is what your target monthly payment is.
Uhhh...zero
@@joekerr3638 lol, exactly. I have always forced the conversation to total costs, and gods honest truth had a sales lady at a Land Rover dealership raising her voice to the point her manager stepped in and closed the deal.
@@87tomcollins wow...good on you for not being pushed around.
The way they financially engineer it is by convincing you to get a lease. Ultimately this is a way to rope you in to the cycle of trading in at the same dealership every three years and carrying over your negative or zero equity. But they’re happy to do it because it’s guaranteed repeat business.
That’s why car loans are at 7 years! To get them in their payment range
Exactly! If a car is urgent we don't care about interest, but in being able to make the monthly payment and then down the road refinance .
HARD FACTS - Modern cars are stuffed with expensive extras. People need basic cars with no electronic gadgets, no power seats, power windows, no tv screens, no wifi, no computer chips, and poof! cars could be made for 20k again.
Dealership are still putting 20k mark ups. It’s absolutely insane!
Did they mention that there is a manufacture parts shortage? But still I won’t buy another new car ever again.
If people stop buying the stupid things, prices will come down. High school economics 101.
@@mplslawnguy3389 1000% agree
What’s even more insane are the people actually signing up to finance these cars at those ridiculous markups.
Adam: "if the interest rate is high I don't buy food this week"
Thank you. As if in many parts of this nation a cad is something optional. And the used car market was/is just as horrible. So your choice is a payment you can’t afford now or a bad long term deal.
Maybe he should eat his car for dinner.
yea he is a tool straight up probably never struggled a day in his life.
I am a car salesman & have been throughout this whole mess. This February has been the worst month I have ever had in sales. 95% of my customers take out loans for 72 or 84 months. No one gets approved for anything more than that because banks dont like loans to extend that long even for prime customers. The way some people avoid the large payment is make a sizeable down payment. But the people who have money like that laying around are few & far between in my area. So most people just cant afford to buy a decent used car, let alone a brand new car. Most vehicle purchases at my dealership in my area consist of $10-15K crossovers & SUV's with higher mileage & crappy cheap trucks. Cheap is the word. Affordable is the goal. & I can't blame them. Because they are struggling, I am going hungry too.
Please vote wisely in 2024
Edit: When you guys are talking about interest rates yes, customers do care about interest rate. But the reality is a lot of poor people have poor credit. I'm not judgeing them it is a viscious cycle & I understand it. But when you have bad credit & you need a car & the only bank that will give you a loan is credit acceptance & they are asking 23% you might have no other choice. You can go buy a $500 clunker with cash & see how far that will take you, never know you could get lucky. I have nothing but empathy for my customers in these situations & when I am getting a loan approved for someone with terrible credit I generally make a mini tort because the dealer has to eat special sub-prime bank fee so that comes out of my commission. I still enjoy helping people get into a vehicle since I do not work at a buy here pay here place so these people are actually set up to succeed & not fail. BHPH is predatory in many cases.
Vote wisely??!!!! Wtf you’re still stuck with that delusion the government actually cares about you and they’re coming to save you? Make more money bro
if people do their due diligence it's easy to find reliable vehicles. consumer reports existed a long time. my 97 honda accord lx cost me 1,450 usd and is running fine for 4 years already. people are usually just unwilling to do their research to best use their money.
I know a guy who sells used cars. His goal is to put you in a car, any car. He hopes it will last for the customer, but if it breaks down, he just puts them in another car, adjusts the payment a little, if necessary, and off they go. He keeps his customers mobile and happy!
@@anemiapwns1 Honestly right now that is a good buy. I wouldn't discourage it. I'm not afraid to tell my customers the same thing if it means I am only losing a $150 mini tort for selling them a crappy used car anyways. The issue is a lot of people have tastes that do not align with their budget. They want or even need a 3 row SUV, but they have a 97 accord budget & get upset due to their expectations being far higher than the reality. Partially due to the fact that $5000 could buy you a hell of a lot more car in 2020 than in 2023, unfortunately.
Come on man; maybe those "poor" people can't do math. Last time I was in a used car dealership; they wanted for me to finance a 12k car for 500/month for 60 months; and i bet you there are a lot of poor suckers who fall for this
Don’t forget full coverage insurance. Cuz if you have a car payment, you have to get full coverage. So add $500+ each month to that car payment
So glad I got my Tacoma in 19. And it’s almost paid off. Looks like I’ll be keeping that bad boy for a good long time.
The world economic forum might have something to say about that .
Good thing you bought a Toyota....
I'm in the same position but bought in '18. I could sell my Toyota now for a few thousand MORE than I bought it for even w 5 years of miles on it.
@@jamessouza7065 - MONEY talks and not enough people will make money off of electric or renewable.
Too many people make money off of carbon fuel.
The other thing is the new trucks can make it impossible to change your own oil.
@@daniellove162 The motivation behind this bullshit has nothing to do with profit
my friend. It does however have alot to do with population control..those people behind all of this are all already extremely wealthy think about it.
Bought my first new car, a rav4 hybrid XLE premium, during the chip shortage caused by covid in 2021. I always bought used cars outright but broke down and decided to get a new one finally. Looking back I did pretty good for being a newbie car buyer. I put about half down, and got an interest rate under 3%.
95 percent of Americans can't afford to put half down nor qualify for a 3 percent loan. You lucked out big time (I love that car BTW)
what a incredible waist of money. old people doing old people things , horrible way to live
@@DP-xu6jw I understand that. Three years before I bought it, I had no credit and a couple hundred bucks in my account.
As someone looking to buy a new vehicle this makes me very excited !
Be patient homie. Interest will continue to rise but dealerships and manufacturers are going to have to decrease prices and increase production to keep buyers coming through the door. For me at $919/month, my old, paid off car starts looking real damn nice lol! I've owned my current car for 8 years and put 210k miles on it.
why excited? Im looking to buy new as well, our first new vehicle, whats there to be excited about? seems like the market sucks
@@SoldatDuChristChannel he's being sarcastic.
Buy certified used
@@markcowan3366 definitely don’t do this wtf. Finance finance yeah your lifestyle is finance. If you can’t pay for it in cash why buy it ? Do you even deserve it ?
What's sad is that soo many people buy cars they can't afford for status. Then that expensive car has a high insurance payment too. You can easily have a $1200 car/insurance payment.
Debt in general, be it credit card, car, or personal loan debt, is so ingrained into society that, telling the average person they can live a decent life without debt doesn't even make sense to them. The biggest reason being, the all mighty CREDIT SCORE.
That’s silly, you can build a great score having no debt. Just put regular expenses on a card and pay balance down to zero each month, or nearly every month. It’s what I do and my credit is over 800
I got over $1,200.00 cash-back last year from using my credit card. Paid it off each month, too. I gotta say, that's 1,200 that I would have lost out if I only used my debit card 🤷🏾♂️. Credit cards are great if you're responsible.
@@Sarah-hw7ok have to get the credit card first , most that get cards don't have discipline to stop borrowing with them
This obsession with a person's credit rating is insane. People are convinced that they need to get a credit card to establish a credit rating. What stupid fools the middle class are.
@@eddiekulp1241 thanks for stating the obvious that you’ve got to get the card first. Only our newest generations have the thought they can buy all they see
I've never purchased anything on credit in my life because basic math taught me that poverty is cheaper than slavery.
I like that.
Man I am stealing that phrase…
With an income tax, aren't we all slaves?
Agree. We are already paying 50% in taxes(income, sales , inflation) I want to keep the remaining
But poverty is just slavery squared
Great educational video!! Thank you for putting in the time to put this needed information out! I’ll continue to share it to family and friends.
I am a aircraft mechanic and a shade tree car mechanic. I will drive my paid off car until the wheels fall off before I pay $950 a month for a car payment.
This is why last year I bought new head lights, wheels and grill and just 'updated' my truck.
Yep, I'll be doing the same this year too. Cars prices and interests are ridiculous right now.
This is a fantasic video, I made my 22 year old son watch it as well.
You just saved my butt. Almost bought a car that would come out to about $52k. Would've been a monthly mortgage payment. I definitely feel relieved after hearing this. Thank you.
Buy a cheaper car or give a higher down payment. I work at a Motorsports dealership. And he is right. Most People only care about the monthly payment
Not to mention the"full" coverage of insurance on the loan.