Why Americans Are Falling Behind On Car Loans

Nothing screams freedom like not having to pay a car loan.

i swear some people need a 2k dollar repair on their car but they go out and replace it with a 30k loan instead

This can all be avoided by monthly budgeting, saving up, then purchasing a USED vehicle IN CASH. People love to impress strangers at a stoplight

Man, i have a coworker that just bought a $75,000 car and is paying $1100 per month. That's insane to me.

The dumbest thing I saw during the car buying frenzy near the end of the pandemic was people taking out EIGHT YEAR, $80k+ loans on SUVs which were priced $20k over msrp after dealer adjustments and lame add ons like nitrogen gas in tires. They were tens of thousands of dollars underwater as soon they signed the contract and that isn't even factoring in depreciation.

In 2018, I bought a used 2015 Honda Civic with 34,000 miles for $12,500.... I got a loan from my bank at 4%...and paid the car off. Looking at loan prices and car prices today blows my mind at how INSANE it's gotten.

The REAL reason people are falling behind - people that cannot afford a car are still buying one because they have no alternative like public transit or bike infrastructure.

My dad once told me "Son, never buy a vehicle that cost 50 percent or more than your yearly salary" I'm auto loan debt free to this day and afford to buy a decent home. Thanks dad!

I had a friend who was studying to become a lawyer, and as part of his studies, agreed to take part in a "sting" operation for car dealers. He was of Mexican descent, and spoke English and Spanish and looked Mexican. He would go to the dealers and pretend to only speak Spanish. They would present him with loan papers, in Spanish, that they then compared to the same paperwork provided by the same dealers in English. As you might guess, the terms given in Spanish were markedly worse than the ones given to English speakers. It got written up in the local newspapers.

I went to a Nucar Toyota dealer , wanted to buy a Corolla Cross . The price on the website for the car on the lot was $370 a month . Excellent credit . Good trade in . They come back with over $500 a month nowhere near the advertised price . We left , left a bad review . They called me back and said they could do the advertised price , only because we left a bad review and corporate saw it . Dealers are scummy , be careful

Crazy idea: whatever amount you would spend on a monthly payment, save it and pay cash. I decided no more auto loans and bought my last car in cash. People need to be more realistic with their budgets.

As an ex car sales man, 90% of the people who walked into the dealer had no business buying a car and knew NOTHING about finance at all. There were many times I straight up told people they can't afford a car. So glad I got out of that Industry. Edit: Thanks for all the comments and likes, I never knew my comment would blow up like this! 😂 If you have any other questions let me know.

Yes, the auto industry is terrible, can we also cover the auto insurance industry. They always seem to escape scrutiny.

Not a single mention that consumers need to be more responsible. Do not buy more car than you need. I see so many people driving new cars that they simply cannot afford. There is a reason I continue to drive my 16 year old truck. The math isn’t hard, I think a lot of consumers are just not making good financial decisions.

I was buying a new motorcycle about 2 years ago and I had excellent credit. The dealership was offering a 0% interest for 3 years promotion if your credit was good enough. I applied and they told me I was denied for the promotion and that my rate would be 11%. I literally laughed at them and said I'd be back tomorrow. Went to my credit union where I bank and applied, and got approved at 3.75%. the dealership is never your friend.

I worked in auto collections for a bank so I was well aware of the scams that dealerships play. So when I went to buy my car I read over everything. The dealership kept talking to my husband and he would defer to me, ‘she knows more than me and it’s her car’.

I graduated from college 4 years ago, and instead of a big trip, my parents helped me buy an 05 Corolla all cash. Easily the best gift of my life. The money that I saved on car notes ended up being saved while I was an entry level worker. I now live in a city with excellent public transportation and don't drive at all. Being debt free, to me, is better freedom than "owning" a car

My parents always told me that they never made enough money to pay for interest on ANYTHING. That lesson has served me very well in life and I have always been far more financially secure because of it.

I’m a lender at a credit union, no one ever complaints when they’re asking for money only when circumstances change in their life is where they blame us. No one holds a gun on your head to sign the contract. Most contracts are signed electronically with no pressure. For the True in lending act we disclose everything, Interest, rate etc. if you can’t afford it don’t buy it that simple.

I will drive mine just like in Africa until everything fall apart and then tape and fix and drive more 😂