Too many people are buying cars using financial products they do not understand

Post by djKianoosh » Sun, Jun 04, 2017, 2:21 AM UTC

charlesdm wrote: post #109

fegu wrote: post #37

Earlier quoted context omitted.

There is a lot more to this than a simple equation. Otherwise we would all borrow as much as we could (about 2% and somewhat predictable) and put it all in the stock market (avg 7,5 % but volatile).

Anyone willing to give me a loan for $10m at 2% -- I'm game. 2% is a good interest rate for a collateralized loan, and frankly, often it's not worth putting up the money yourself if you can borrow it (at 2%). Then again, a car isn't (really) an asset with a positive RoI..

Post by wingspar » Sun, Jun 04, 2017, 2:42 AM UTC

ganoushoreilly wrote: post #104

tyfon wrote: post #91

Earlier quoted context omitted.

Same thing here in Norway. When I bought my last car, I negotiated the price down quite a bit and got upgrades/winter tires etc for the same price. When all was said and done and he asked how I wanted to finance it, I pulled out my direct debit and he went pale. I had to argue for another half an hour to keep all the negotiated stuff while paying for it outright, it was silly.

That's because their deal was hedging on the additional commission they'd gain from financing. It's rather screwy. Whenever I trade in a car I always negotiate price on the car alone first, then get a trade appraisal (usually have one in hand from Carmax prior) and if they start playing games I walk out. Past two cars, I walked out and got a call within an hour saying come back we'll do the deal.

Post by skookumchuck » Sun, Jun 04, 2017, 2:58 AM UTC

coldtea wrote: post #168

skookumchuck wrote: post #131

Earlier quoted context omitted.

When I've bought mortgages, I was required by law to sign a document that says "I have read and understood these loan documents." I've seen many people in the newspaper complaining that they neither read nor understood the terms. At what point do you expect legally competent adults to pay attention to and take responsibility for what they're doing?

> At what point do you expect legally competent adults to pay attention to and take responsibility for what they're doing? At no point. I don't even consider it a matter of "responsibility". You can only take responsibility when things are clearly laid out. But what about the even more important responsibility to CLEARLY lay things out that should fall into businesses? What I do expect and find important, and should…

Post by jedmeyers » Sun, Jun 04, 2017, 3:14 AM UTC

brianwawok wrote: post #145

eru wrote: post #120

Earlier quoted context omitted.

Why does buying a car in America involve so much (or even any!) negotiation at all? I guess it's a form of price discrimination? I just tried to figure out (via Google) whether it's common in eg Germany---but what I found what mostly only about negotiations for used cars.

Literally, the only things you negotiate in the US are cars and houses. Not groceries nor clothes nor millions of other things. Perhaps a few minor things here or there.. but we pretty much just stick to the basics.

Post by Spooky23 » Sun, Jun 04, 2017, 3:17 AM UTC

fegu wrote: post #37

charlesdm wrote: post #29

Earlier quoted context omitted.

If cost of debt borrow money / finance

There is a lot more to this than a simple equation. Otherwise we would all borrow as much as we could (about 2% and somewhat predictable) and put it all in the stock market (avg 7,5 % but volatile).