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I'm underwater on my car loan. But my credit rating was low and I got to get a new car without anything down, extended payments. The interest rate is a bit high, but now my credit score is good. It works out. At least I got a car that will last as long as the loan.
I'm underwater on my car loan. But my credit rating was low and I got to get a new car without anything down, extended payments. The interest rate is a bit high, but now my credit score is good. It works out. At least I got a car that will last as long as the loan.
I’m concerned, of course, that Americans have built a society with so few buses that everyone has to buy a car on credit. But being “underwater” is not the main problem here.
How does this have anything to do with anything that could be on topic for HN?
Sequioa shared the “Rest in Peace Good Times” presentation in 2008 with their portfolio companies:
I'm underwater on my car loan. But my credit rating was low and I got to get a new car without anything down, extended payments. The interest rate is a bit high, but now my credit score is good. It works out. At least I got a car that will last as long as the loan.
Cars last a long time now. My car is 20 years old and it’s still far cheaper to maintain that car than to buy a new car.
How does this have anything to do with anything that could be on topic for HN?
This is a weird summary because everyone who buys a car on credit is always “underwater”. The cars are never worth the balance of the loan. People buy cars on credit not because the car has intrinsic value or is an investment, but because it gives them access to other things of value, like their job. I’m concerned, of course, that Americans have built a society with so few buses that everyone has to buy a car on cred…
That said I tend to agree that "underwater" isn't really the right concept for a car loan. Unless of course you total a car right after you get it. Sucks to be putting $ towards a car note with nothing behind it.
One example:
> Nicole-Malia Tennent and Shyanne Fernandez, both in their early 20s, wanted to trade in the car they shared for something less expensive last year. The friends, who live in Hawaii, ended up splurging on a new vehicle and moving the unpaid loan balance of $12,500 from an older GMC into a new loan for a 2018 GMC Sierra truck.
> The rollover debt helped drive up the new loan balance to more than $66,000. The friends now split the payment of more than $900 a month, which they owe to Pearl Hawaii Federal Credit Union for 84 months. Their old loan was about $500 a month.
How do you go looking for a vehicle that's less expensive and end up with a vehicle that's nearly 2x the cost?
This is a weird summary because everyone who buys a car on credit is always “underwater”. The cars are never worth the balance of the loan. People buy cars on credit not because the car has intrinsic value or is an investment, but because it gives them access to other things of value, like their job. I’m concerned, of course, that Americans have built a society with so few buses that everyone has to buy a car on cred…
I've never checked but I don't think I've ever been underwater on a car loan - I finance but not 100% of the price - it's more like 50% - whatever the value of the trade plus at least a little bit of cash that I bring to the table. That said I tend to agree that "underwater" isn't really the right concept for a car loan. Unless of course you total a car right after you get it. Sucks to be putting $ towards a car note…
This is a weird summary because everyone who buys a car on credit is always “underwater”. The cars are never worth the balance of the loan. People buy cars on credit not because the car has intrinsic value or is an investment, but because it gives them access to other things of value, like their job. I’m concerned, of course, that Americans have built a society with so few buses that everyone has to buy a car on cred…
More specifically, we've built cities that are pretty awful for bus (or rail) transportation, if you thrown any sane amount of money at the public transit system. Most of our cities have been relying on inefficient (i.e. very spread-out, low-density) growth patterns to cover costs, while the long-term expenses demanded by that growth (maintenance, for example) outpace the revenue it brings in. It's musical chairs, and when the music (growth) stops most of the cities in the US are going to be Detroit, with way too much city for their tax base to support.
Huge, low-density cities lead to shitty, expensive services (bus service being but one example) and crippling, indefinitely-ongoing maintenance expenses.