131–140 of 149 posts
Earlier quoted context omitted.
Temp beaters are not that bad, if you choose them wisely (like a boring 3-year old Toyota). Nothing fancy, no surprises, years ahead with just basic service. And a small crash will only break your car, not your heart.
How much cheaper is a boring 3-year old Toyota versus a boring brand new Toyota? Why would the person who buys a boring new Toyota unload it for a significant loss after just 3 years of ownership?
And yet automakers think that the smaller more affordable cars that do well overseas somehow have no audience in the US. For instance, the Geome Xingyuan is $10k, Hongguang Mini EV is $5k. Instead we have the average cost of a new car at $50k.
> yet, automakers think that the smaller more affordable cars that do well overseas somehow have no audience in the US Blame fleet efficiency standards [1] and the light-truck loophole [2]. [1] https://me.engin.umich.edu/news-events/news/cafe-standards-c... [2] https://digitalcommons.law.lsu.edu/cgi/viewcontent.cgi?artic...
Earlier quoted context omitted.
> I’ve seen some crazy stories on YouTube about people trading in cars they’re already underwater on just to finance an even more expensive one. This has happened for as long as there has been car finance (i.e. practically since the dawn of private vehicle ownership), it's nothing new. Given most folks cannot purchase a vehicle outright, the customer only really cares about the monthly payment, a sizeable amount of w…
"the customer only really cares about the monthly payment," I noticed this when I bought my Subaru. There was a young couple next to me that worked hard with the sales guy to get an acceptable monthly payment for their desired car. No thought about actual price or duration of the loan. I wanted to scream at them that they were making a big mistake.
You also need to walk in the door with your own financing. Even if they give you financing through your preferred bank, it's not uncommon for them to juice the interest rate for some additional profit without any kind of disclosure.
I’ve seen some crazy stories on YouTube about people trading in cars they’re already underwater on just to finance an even more expensive one. I can’t understand why banks keep lending money for deals like that.
There is no way to prove this is true or that if true it happened more than once (people get millions of loans every day, and once in a million per day is a tiny number)
Earlier quoted context omitted.
Agreed. I usually have to remind the salesperson to stop talking to me in monthly payment terms. I always tell them to talk to me about final price including all interest. It's a bit of an uphill battle, where you have to tell them over and over. They're just so used to trying to sell the monthly payment. It's really no wonder that people that don't understand interest (many if not most) will fall for this. And if yo…
Temp beaters are not that bad, if you choose them wisely (like a boring 3-year old Toyota). Nothing fancy, no surprises, years ahead with just basic service. And a small crash will only break your car, not your heart.
I bought a new vehicle in 2023 after years of not owning a car. I was trying to buy used, but the delta between new and 1-3 year old used was so small it made no sense to go used. I was giving up a warranty for often times $500-$1500, total.
This is still true, and especially true for brands whose used vehicles command a price premium, like Toyota. Used values are still high relative to historical norms because a lot of the market that normally buys new vehicles is priced out of buying new, and some of that demand has been absorbed by the used market (some of it has dropped out of the market and/or deferred a purchase until later).
The idea of buying a relatively low miles 3-year old Toyota for materially less than a new one doesn't really exist, currently. Now, if you want to go for a 3 year old car with 150,000+ miles, sure, you can save some money, but that's a ton of miles per year. You're counting on the previous owner(s) being _really_ on top of their basic maintenance.
Earlier quoted context omitted.
> I can’t understand why banks keep lending money for deals like that. Because if they ever stop lending the music just abruptly stops. The entire US economy grinds to a halt and takes the entire world down with it. Even just raising the interest rates is enough to provoke cataclysmic events that wipe out billions and billions of dollars overnight. I can't even fathom what would happen if banks stopped lending money.…
>Because if they ever stop lending the music just abruptly stops. Banks are altruistic actors who generously prop up the world economy by lending to non-creditworthy buyers? That's a new one for HN.
The sentence you quoted doesn't have anything to do with the point you claimed they're making.
And the GP is right: banks have to lend because the system is set up to use credit for investment, personal consumption, and to balance shocks. Doesn't take anyone being altruistic.
Earlier quoted context omitted.
> I can’t understand why banks keep lending money for deals like that. Because if they ever stop lending the music just abruptly stops. The entire US economy grinds to a halt and takes the entire world down with it. Even just raising the interest rates is enough to provoke cataclysmic events that wipe out billions and billions of dollars overnight. I can't even fathom what would happen if banks stopped lending money.…
>Because if they ever stop lending the music just abruptly stops. Banks are altruistic actors who generously prop up the world economy by lending to non-creditworthy buyers? That's a new one for HN.
They are propping up the world economy though. They're not sitting on top of their cash reserves like dragons and their hoards. They are "efficiently allocating the capital" by lending at interest. That's the number one cause of inflation. They make it so there's so much money circulating it slowly becomes worthless.
Someone needs a $1,000 loan. Bank issues it against some collateral. They grab the cash and spend it. Whoever receives that money deposits it at the bank. They keep $100 and loan $900 back out. It eventually gets deposited again. A significant fraction is loaned out again! Then it gets deposited again!! Then $1,000 turns into $100,000 literally overnight! Not one cent of it real until the loans are paid back, until somebody actually goes and extracts value from this planet! Exponential growth in a linear planet, it's unsustainable.
The entire global economy is leveraged this way! It's not real until the loans are paid back! If people start defaulting on these loans, it's fucking over. People depend on those payments in order to pay back their own loans. Defaults generate more defaults which generate even more defaults, like a society level stack unwinding. Next thing you know the government is "injecting liquidity" into banks. If they don't bail out the banks everything come crashing down.
We live in the age of CBDCs, of programmable currency. We have governments speaking of negative interest rates and expiring money to drive consumption. People have to keep consuming, they have to keep spending money. The motor of capitalism must keep turning. Otherwise the loans go unpaid and everybody gets liquidated.
Earlier quoted context omitted.
Agreed. I usually have to remind the salesperson to stop talking to me in monthly payment terms. I always tell them to talk to me about final price including all interest. It's a bit of an uphill battle, where you have to tell them over and over. They're just so used to trying to sell the monthly payment. It's really no wonder that people that don't understand interest (many if not most) will fall for this. And if yo…
Temp beaters are not that bad, if you choose them wisely (like a boring 3-year old Toyota). Nothing fancy, no surprises, years ahead with just basic service. And a small crash will only break your car, not your heart.
I would also not call a 3 year old car a “beater”. A “beater” is more like 15 years old.
Earlier quoted context omitted.
Car salesmen also want to get you to focus on monthly payment instead of price. It’s easy to manipulate the payment by adjusting the loan term without actually taking anything off the price. And then the finance manager can further manipulate the payment by upselling you additional products and saying it’s only an additional $7 per month instead of saying nitrogen in your tires will cost $336.
Agreed. I usually have to remind the salesperson to stop talking to me in monthly payment terms. I always tell them to talk to me about final price including all interest. It's a bit of an uphill battle, where you have to tell them over and over. They're just so used to trying to sell the monthly payment. It's really no wonder that people that don't understand interest (many if not most) will fall for this. And if yo…
Over and over, the agent kept insisting that I increase my counter offer. "Think about it - that's only like a latte a day".
Yes. A latte a day, that I don't already purchase. Over 25 years.
We were talking about close to $50,000.