Car loan stats
07-19-17, 05:10 AM
#46
69.3 month average does seem high. However, I think its also because of low interest rate and sometimes; the 0% finance offer! The Toyota Sienna I financed for my dad in 2014 was 60mon/$20K loan & 0% APR. I don't see a reason why we should opt for 36 or 48 month when its the same 0% APR and there's no penalty for early pay-off. We actually regretted we put $7k down as we can get it 100% finance & no interest. At the time we didn't know dealer can cut us a check for the trade-in and was thinking the trade-in can bring down the sales tax. If we would apply the $7k to the home mortgage, we could have saved $10k in interest instantly.
My dad cut me a $15k check last year for the remaining payment. With his agreement, I applied it to my mortgage and saved over $20K in interest. I just continue to pay his $333.33 monthly payment. I think those understand the math part know what I mean.
My dad cut me a $15k check last year for the remaining payment. With his agreement, I applied it to my mortgage and saved over $20K in interest. I just continue to pay his $333.33 monthly payment. I think those understand the math part know what I mean.
07-19-17, 05:16 AM
#47
Lexus Fanatic
No issue with stretching it out as long as your reason for doing so is not because you can't afford the payments on a shorter term loan. It's like leasing, you shouldn't lease because you can't pay the higher payment. Using it as a financial tool is fine, same with a longer term 0% interest deal.
07-19-17, 06:12 AM
#48
Lexus Fanatic
I am not surprised at all about these long term loans and $30K average price transactions. People seem to want to want everything today. The new generation has been born into a debt lifestyle where their parents are still paying off their home when they get theirs started. They are leaving college with debt that will take a very long time to pay off. Most people have no idea what it is like to live debt free as having loads of debt is all they know.
Worst part of everything is that the current gen of under 40 have no idea that interest rates in the early 80s were close to 18% if I remember correctly.
Worst part of everything is that the current gen of under 40 have no idea that interest rates in the early 80s were close to 18% if I remember correctly.
07-19-17, 06:16 AM
#49
Lexus Fanatic
Why would people under 40 care that interest rates in the 80s were 18%? It isn't the 80s, and interest rates aren't 18%.
07-19-17, 06:18 AM
#50
Longest I've financed any vehicle for was 60 months and I've always paid it off in 40-48 months. I'm lucky to have a company car and my personal vehicles paid off so no new cars/payments for me. Wife likes the NX so that may be the next car payment I get involved in.
07-19-17, 06:24 AM
#51
Lexus Fanatic
Good to hear that you get it paid off as soon as you can.
07-19-17, 06:28 AM
#52
Lexus Fanatic
So they can appreciate what they are today LOL.....although that does work against people with fixed-income or rate-dependent investments. One of the things that I inherited from my late mother's estate (by her request, I was also the Executor), when she passed away in 2000, was an old municipal bond that was paying 25%.....double tax-free (no, I'm not kidding). The organization that issued it did not call it until 2004.
And one must also take into account that, today, we also don't have the punishing price-inflation we had in the late 1970s and early 80s that went with those sky-high interest rates...I lived through that, and remember it well. I can remember when new cars were also going up a double-digit rates....the price of a basic, no-frills, American-built compact coupe or sedan, for example, which was around $2500 or so in 1970 when I graduated from high school, had reached $6000 or so by 1980.
It isn't the 80s, and interest rates aren't 18%.
07-19-17, 06:50 AM
#53
Not much point in that, given that you already paid most of the interest on length of loan.
07-19-17, 07:05 AM
#54
Lexus Fanatic
So they can appreciate what they are today LOL.....although that does work against people with fixed-income or rate-dependent investments. One of the things that I inherited from my late mother's estate (by her request, I was also the Executor), when she passed away in 2000, was an old municipal bond that was paying 25%.....double tax-free (no, I'm not kidding). The organization that issued it did not call it until 2004.
And one must also take into account that, today, we also don't have the punishing price-inflation we had in the late 1970s and early 80s that went with those sky-high interest rates...I lived through that, and remember it well. I can remember when new cars were also going up a double-digit rates....the price of a basic, no-frills, American-built compact coupe or sedan, for example, which was around $2500 or so in 1970 when I graduated from high school, had reached $6000 or so by 1980.
And one must also take into account that, today, we also don't have the punishing price-inflation we had in the late 1970s and early 80s that went with those sky-high interest rates...I lived through that, and remember it well. I can remember when new cars were also going up a double-digit rates....the price of a basic, no-frills, American-built compact coupe or sedan, for example, which was around $2500 or so in 1970 when I graduated from high school, had reached $6000 or so by 1980.
Today, the cost of attendance is about $70,000, yet unless the household makes > $250k, the cost of attendance is about 10% of income. If the household < $65k, it would be free.
The acceptance rate is 9.4%.
Should a child today appreciate the above? That my father had it so much worse, and I as the student had it so much better (much higher acceptance), I would probably say no. It is what it is, time marches on. I feel the same about the interest rates. 0% is usually captive financing, it's not truly 0%. I asked my credit union for 0% and they told me Hall and Oates, wonder why.
07-19-17, 07:18 AM
#55
Pole Position
This made me think of when my dad told me he was proud of my accomplishments, but unfortunately, did not think he could pay for my 2nd year in college. Back then, the school had a 39% acceptance rate, but even with aid and scholarship, my dad had to pay about 1/2. That was significant. In 2017 dollars, the price would be $16k. Parents today routinely have to pay $25k for an ordinary school, out of pocket, after loans and aid (I've heard them say no aid, just loans).
Today, the cost of attendance is about $70,000, yet unless the household makes > $250k, the cost of attendance is about 10% of income. If the household < $65k, it would be free.
The acceptance rate is 9.4%.
Should a child today appreciate the above? That my father had it so much worse, and I as the student had it so much better (much higher acceptance), I would probably say no. It is what it is, time marches on. I feel the same about the interest rates. 0% is usually captive financing, it's not truly 0%. I asked my credit union for 0% and they told me Hall and Oates, wonder why.
Today, the cost of attendance is about $70,000, yet unless the household makes > $250k, the cost of attendance is about 10% of income. If the household < $65k, it would be free.
The acceptance rate is 9.4%.
Should a child today appreciate the above? That my father had it so much worse, and I as the student had it so much better (much higher acceptance), I would probably say no. It is what it is, time marches on. I feel the same about the interest rates. 0% is usually captive financing, it's not truly 0%. I asked my credit union for 0% and they told me Hall and Oates, wonder why.
07-19-17, 07:21 AM
#56
Lexus Fanatic
haha me and my buddy use Hall and Oates to refer to "No Can Do" which I guess is really "I Can't Go for That." There's an excellent version on YouTube from Darryl's house. That guitarist is sick, but I guess he was fired....
07-19-17, 08:02 AM
#58
The extra payments I make go directly to principal so I'm cutting interest on overall length of loan. My interest rates are always low last one was 3.75%. Finishing a loan 12-20 payments ahead of schedule is a win in my book. Don't see how "not much point" if I'm paying it off early versus going entire length and paying more interest.
07-19-17, 08:30 AM
#59
The extra payments I make go directly to principal so I'm cutting interest on overall length of loan. My interest rates are always low last one was 3.75%. Finishing a loan 12-20 payments ahead of schedule is a win in my book. Don't see how "not much point" if I'm paying it off early versus going entire length and paying more interest.
I just ran a quick calc for 30K loan with 3.75% interest
Total interest is 2,947 of which last 12 payments account only for 131 dollars of interest.
I cannot argue with paying off earlier as it is a winning strategy but not everyone cares about saving 130 bucks.
07-19-17, 08:51 AM
#60
Lexus Fanatic
Once you add actual dollars to your analysis you'll see what he means.
I just ran a quick calc for 30K loan with 3.75% interest
Total interest is 2,947 of which last 12 payments account only for 131 dollars of interest.
I cannot argue with paying off earlier as it is a winning strategy but not everyone cares about saving 130 bucks.
I just ran a quick calc for 30K loan with 3.75% interest
Total interest is 2,947 of which last 12 payments account only for 131 dollars of interest.
I cannot argue with paying off earlier as it is a winning strategy but not everyone cares about saving 130 bucks.