Too many people are buying cars using financial products they do not understand
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Re: Too many people are buying cars using financial products they do not understand
#2A better title might be "too many people are buying cars using financial products they do not fully understand."
Re: Too many people are buying cars using financial products they do not understand
#3A better title might be "too many people are buying cars using financial products they do not fully understand."
That's good because it's the article's own summary. Thanks.
Re: Too many people are buying cars using financial products they do not understand
#4Some examples would've been nice.
Re: Too many people are buying cars using financial products they do not understand
#5So I guess the whole car thing is probably going to be this cycle's mortgage bubble? Considering car sales are falling off a cliff I guess we're in 2007 right now.
Re: Too many people are buying cars using financial products they do not understand
#6People are buying cars they can't really afford because the monthly payments seem to be affordable. I think they know it's an expensive way to have a nice car but the alternative (because they don't have the capital) may be buying an old banger or having no car at all.
Re: Too many people are buying cars using financial products they do not understand
#7So I guess the whole car thing is probably going to be this cycle's mortgage bubble? Considering car sales are falling off a cliff I guess we're in 2007 right now.
Only if people start losing their jobs in high numbers.
Re: Too many people are buying cars using financial products they do not understand
#8So I guess the whole car thing is probably going to be this cycle's mortgage bubble? Considering car sales are falling off a cliff I guess we're in 2007 right now.
No one buys a car expecting the value to go up so the vehicle market probably won't unravel in a collapse (vehicle debt is also about 1/10 the size of the mortgage market).
Re: Too many people are buying cars using financial products they do not understand
#9Sounds a bit like mortgages circa 05
Re: Too many people are buying cars using financial products they do not understand
#10People are buying cars they can't really afford because the monthly payments seem to be affordable. I think they know it's an expensive way to have a nice car but the alternative (because they don't have the capital) may be buying an old banger or having no car at all.
The article seems to be talking about short term (2-3 year) interest-only leases.
There's a middle ground your comment hasn't mentioned. Instead of leasing or buying a used car, consumers can finance a new car (e.g. 5 year loan). It requires slightly higher monthly payments to cover the principal, and you can't switch cars as frequently, but you have ownership of the car (and freedom from payments) after the loan ends.
I tend to think that buying used is a much better value, especially in areas that don't regularly salt their roads. But it's good to know about all available options.