The Car is the new House: banks roll out 97-month car notes

[Indy Texas]

http://finance.yahoo.com/news/introducing-97-month-car-loan-010500170.html

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Why anyone would put themselves in this situation instead of just buying a used car is beyond me. But if you absolutely must have a new 2014 model, your broke self might be making payments on it into the 2020s. A 97 month car loan - just over 8 years - approaches the length of the 10 year mortgages people often use to buy houses. I guess you could theoretically live in a 2014 Corolla.

[Snowstalker Mk. II]

Unless you're either rich or it's an exceptionally shitty new car, why would you get a new car?

[DC Al Fine]

Unless you're either rich or it's an exceptionally shitty new car, why would you get a new car?

I concur. Getting a 2-4 year old car is much better bang for your buck.

These loans are around because people are math impaired and only think of the monthly payment.

[greenforest32]

Unless you're either rich or it's an exceptionally shitty new car, why would you get a new car?

I concur. Getting a 2-4 year old car is much better bang for your buck.

These loans are around because people are math impaired and only think of the monthly payment.

The monthly payment on a $6,500 used car is lower than the monthly payment on a new $15,000 or $25,000+ car though...

[Franzl]

I'd never consider buying a new car. I buy 1000-2000€ cars that run relatively well for a couple of years primarily to get me to public transport.

If I lived in any more urban place, I'd probably just go without a car.

[opebo]

I'd never consider buying a new car. I buy 1000-2000€ cars that run relatively well for a couple of years primarily to get me to public transport.

If I lived in any more urban place, I'd probably just go without a car.

Everything about this rationale depends on good used cars being cheap.  Alas, following the 'cash-for-clunkers' decimation of the used car market, and the lack of new-car purchases in the pipeline the last few years, the value of used cars has soared.

Back in the 1980s and 1990s one could get incredible used car values - I regularly drove around nearly for free in low-mileage, ultra-comfortable and reliable large American cars during those days:

















These cars virtually never broke down, ran into the hundreds of thousands of miles without much wear, and were massive, safe, and comfortable with easy-running V-8 engines for high-speed cruising, automatic, and ice cold air typically.  I usually paid between $1,000 and $3,000 for these cars, purchased from elderly people in perfect condition, with 15,000-65,000 miles on the clock.

Nowadays, however, there are obviously hardly any good cars left - certainly nothing that has the long-term durability potential of those old cars.

[DC Al Fine]

Unless you're either rich or it's an exceptionally shitty new car, why would you get a new car?

I concur. Getting a 2-4 year old car is much better bang for your buck.

These loans are around because people are math impaired and only think of the monthly payment.

The monthly payment on a $6,500 used car is lower than the monthly payment on a new $15,000 or $25,000+ car though...

Sure, but they I am comparing within the same group of vehicles, not across different ages of vehicles. If you give a typical American an 8 year loan term, they think "Wow, I can get this new car for only $200 per month!" even though they'll pay way more than if they had taken out a 3 year loan.

[Indy Texas]

I'd never consider buying a new car. I buy 1000-2000€ cars that run relatively well for a couple of years primarily to get me to public transport.

If I lived in any more urban place, I'd probably just go without a car.

Everything about this rationale depends on good used cars being cheap.  Alas, following the 'cash-for-clunkers' decimation of the used car market, and the lack of new-car purchases in the pipeline the last few years, the value of used cars has soared.

Back in the 1980s and 1990s one could get incredible used car values - I regularly drove around nearly for free in low-mileage, ultra-comfortable and reliable large American cars during those days:

***

These cars virtually never broke down, ran into the hundreds of thousands of miles without much wear, and were massive, safe, and comfortable with easy-running V-8 engines for high-speed cruising, automatic, and ice cold air typically.  I usually paid between $1,000 and $3,000 for these cars, purchased from elderly people in perfect condition, with 15,000-65,000 miles on the clock.

Nowadays, however, there are obviously hardly any good cars left - certainly nothing that has the long-term durability potential of those old cars.

I don't think Cash for Clunkers "decimated" the used car market. It's got more to do with the fact that more and more people have gotten priced out of the new car market over time - a combination of income inequality (car makers catering increasingly to high-end buyers as a result; the demise of blue-collar staple brands like Plymouth and Pontiac exemplify this), and government policy (higher research and manufacturing costs for safer and more fuel-efficient cars) are the reasons cars have become more expensive in real terms over time.

Add to that all the crazy weather we're having, when an earthquake in Japan can flood and ruin thousands of cars awaiting export and when a hurricane in the Tri-State area can destroy more recently arrived cars, and you have a lot of supply shocks to the new car market and even more people seeking used cars as a result.

I will say that the "Panther" platform cars (Ford Crown Victoria, Mercury Grand Marquis) are some of the most durable used cars out there. There's a reason cab companies and livery car services rely on them. They're practically indestructible when properly maintained. (Though not much of a pleasure to look at or drive).

[opebo]

I will say that the "Panther" platform cars (Ford Crown Victoria, Mercury Grand Marquis) are some of the most durable used cars out there. There's a reason cab companies and livery car services rely on them. They're practically indestructible when properly maintained. (Though not much of a pleasure to look at or drive).

Yes, they're great cars, and the General Motors 'B Platform' - Chevrolet Caprice, Oldsmobile Delta 88, etc. - was equally durable and slightly more reliable.  I found all these cars a joy to drive, but then my idea of enjoyable driving is to be insulated from all inconvenience and discomfort.

[Link]

The Car is the new House: banks roll out 97-month car notes

Cool.  Thanks for posting.  A couple of years from now those of us that bothered to read you link will remember this day.  One of the few useful and insightful things I've read on here in quite some time.

Since the government is now in the auto business what do you think the odds are that this bubble with be popped with legislation?  0?  -1?

[Mr.Phips]

I will say that the "Panther" platform cars (Ford Crown Victoria, Mercury Grand Marquis) are some of the most durable used cars out there. There's a reason cab companies and livery car services rely on them. They're practically indestructible when properly maintained. (Though not much of a pleasure to look at or drive).

Yes, they're great cars, and the General Motors 'B Platform' - Chevrolet Caprice, Oldsmobile Delta 88, etc. - was equally durable and slightly more reliable.  I found all these cars a joy to drive, but then my idea of enjoyable driving is to be insulated from all inconvenience and discomfort.

My Grandpa had an '84 Delta 88 that look a lot like the Caprice at the top.  That group of vehicles was really the last of the full sized American sedans(and wagons too).  My neighbor had one of the last Caprice wagons(it was a 1989) before they went to that hideous 1991-1993 version that looked like big old loaves of Italian Bread.  He ended up trading it in for a Honda Civic because the gas mileage was so awful.

[opebo]

My neighbor had one of the last Caprice wagons(it was a 1989) before they went to that hideous 1991-1993 version that looked like big old loaves of Italian Bread.  He ended up trading it in for a Honda Civic because the gas mileage was so awful.

I got around 20 mpg on the highway with mine, maybe a trifle more in flatlands with the air off.  Considered that quite good.

[Indy Texas]

I will say that the "Panther" platform cars (Ford Crown Victoria, Mercury Grand Marquis) are some of the most durable used cars out there. There's a reason cab companies and livery car services rely on them. They're practically indestructible when properly maintained. (Though not much of a pleasure to look at or drive).

Yes, they're great cars, and the General Motors 'B Platform' - Chevrolet Caprice, Oldsmobile Delta 88, etc. - was equally durable and slightly more reliable.  I found all these cars a joy to drive, but then my idea of enjoyable driving is to be insulated from all inconvenience and discomfort.

My Grandpa had an '84 Delta 88 that look a lot like the Caprice at the top.  That group of vehicles was really the last of the full sized American sedans(and wagons too).  My neighbor had one of the last Caprice wagons(it was a 1989) before they went to that hideous 1991-1993 version that looked like big old loaves of Italian Bread.  He ended up trading it in for a Honda Civic because the gas mileage was so awful.

I remember a girl in my first grade class whose mom had one of the early '90s Buick Roadmaster wagons (shared the bread-loaf shape of the Caprice) in white with the vinyl woodgrain appliques. Even at that age, I remember thinking how God awful looking a car it was. But my grandfather had a 1996 Impala SS that I used to like riding in. The seats were insanely soft compared with the Mercedes and Volvos my parents drove at that time.

[opebo]

I remember a girl in my first grade class whose mom had one of the early '90s Buick Roadmaster wagons (shared the bread-loaf shape of the Caprice) in white with the vinyl woodgrain appliques. Even at that age, I remember thinking how God awful looking a car it was.

In fact those were excellent, durable cars.  They weren't as nice as the 'box shaped' ones in the generation before, obviously (no chrome bumpers), but they were certainly better than all the squishy modern cars.

[Mr.Phips]

I will say that the "Panther" platform cars (Ford Crown Victoria, Mercury Grand Marquis) are some of the most durable used cars out there. There's a reason cab companies and livery car services rely on them. They're practically indestructible when properly maintained. (Though not much of a pleasure to look at or drive).

Yes, they're great cars, and the General Motors 'B Platform' - Chevrolet Caprice, Oldsmobile Delta 88, etc. - was equally durable and slightly more reliable.  I found all these cars a joy to drive, but then my idea of enjoyable driving is to be insulated from all inconvenience and discomfort.

My Grandpa had an '84 Delta 88 that look a lot like the Caprice at the top.  That group of vehicles was really the last of the full sized American sedans(and wagons too).  My neighbor had one of the last Caprice wagons(it was a 1989) before they went to that hideous 1991-1993 version that looked like big old loaves of Italian Bread.  He ended up trading it in for a Honda Civic because the gas mileage was so awful.

I remember a girl in my first grade class whose mom had one of the early '90s Buick Roadmaster wagons (shared the bread-loaf shape of the Caprice) in white with the vinyl woodgrain appliques. Even at that age, I remember thinking how God awful looking a car it was. But my grandfather had a 1996 Impala SS that I used to like riding in. The seats were insanely soft compared with the Mercedes and Volvos my parents drove at that time.

The Roadmaster was a little bit less ugly than the Caprice.  The Caprice actually somewhat redeemed itself when it was turned into the Impala SS.  I guess the difference was that the windows behind the rear doors where less ugly triangular shaped than the Caprice's. 

[opebo]

The Roadmaster was a little bit less ugly than the Caprice.  The Caprice actually somewhat redeemed itself when it was turned into the Impala SS.  I guess the difference was that the windows behind the rear doors where less ugly triangular shaped than the Caprice's. 

Ugh, I disliked the 'SS'.  I like large soft cars to be large soft cars - attempts to make them sporty or fast seem tacky and silly to me.