Thanatosian posted:

I don't understand how judges who do this poo poo get away with it. Jesus loving Christ.

Pilsner posted:

Just buy a car used car from a regular person, and pay in cash. Problem solved.

Pilsner posted:

It's what I've always done, and it's also naturally better for your economy, since you aren't taking up a loan. If you must buy some more expensive car, perhaps you can borrow from your parents at 0% or low interest (and pay them back of course).

BiggerBoat posted:

You do realize that many people simply don't have $5,000 in cash laying around, right? Also, to your second point about getting cash for your car: yes, that's a great idea but a LOT of people NEED the car they have to get to work to pay for the car you're talking about them buying.

Meaning, if I needed to sell my car for $2500 in order to have enough cash to buy the $5000 one, there's a whole lot of logistical issues there and saying "just buy a car" is not always helpful advice.

BiggerBoat posted:

You do realize that many people simply don't have $5,000 in cash laying around, right? Also, to your second point about getting cash for your car: yes, that's a great idea but a LOT of people NEED the car they have to get to work to pay for the car you're talking about them buying.

Meaning, if I needed to sell my car for $2500 in order to have enough cash to buy the $5000 one, there's a whole lot of logistical issues there and saying "just buy a car" is not always helpful advice.

Pilsner posted:

But does it have to be $5000? My last car, a 2004 VW Polo, cost the equivalent of $4500, but I live in the country with the most expensive cars in the entire world (Denmark). I can't imagine you can't find a decent daily driver from the mid-2000's in the USA for $2000 or less. Am I wrong?

$2000 is not a lot of money in my opinion. If you can't save up $2k over the span of a few months, why borrow money to buy a new car at horrendous rates? The money will quickly be burnt in interest and fees.

Buying brand new cars is just a frivolous waste of money in my opinion, but to each their own. I always advise people to buy a 5-10 year old car, instead of new. You pay out the nose in depreciation, even if you have the cash in hand.

Pilsner posted:

But does it have to be $5000? My last car, a 2004 VW Polo, cost the equivalent of $4500, but I live in the country with the most expensive cars in the entire world (Denmark). I can't imagine you can't find a decent daily driver from the mid-2000's in the USA for $2000 or less. Am I wrong?

$2000 is not a lot of money in my opinion. If you can't save up $2k over the span of a few months, why borrow money to buy a new car at horrendous rates? The money will quickly be burnt in interest and fees.

Buying brand new cars is just a frivolous waste of money in my opinion, but to each their own. I always advise people to buy a 5-10 year old car, instead of new. You pay out the nose in depreciation, even if you have the cash in hand.

Pilsner posted:

But does it have to be $5000? My last car, a 2004 VW Polo, cost the equivalent of $4500, but I live in the country with the most expensive cars in the entire world (Denmark).

Thanatosian posted:

I don't understand how judges who do this poo poo get away with it. Jesus loving Christ.

Pilsner posted:

But does it have to be $5000? My last car, a 2004 VW Polo, cost the equivalent of $4500, but I live in the country with the most expensive cars in the entire world (Denmark). I can't imagine you can't find a decent daily driver from the mid-2000's in the USA for $2000 or less. Am I wrong?

Pilsner posted:

Am I wrong?

$2000 is not a lot of money in my opinion. If you can't save up $2k over the span of a few months, why borrow money to buy a new car at horrendous rates?

Cyrano4747 posted:

Yes, you are. A few years ago the government had a program that was billed as trying to get fuel inefficient cars off the road, but which really just hosed poor people to give a sloppy BJ to the auto industry. It was called 'cash for clunkers.' I forget the details, but basically you turned in your old car and bought a new one. THe dealer gave you a guaranteed buyback based on some details about the car but usually it was between $2000 and 4,000. The dealers then got the money from the feds and they were REQUIRED to scrap the car. Since dealerships were involved there was a LOT of shady poo poo, especially when you start getting into the sketchy used car lot type places.

The upshot was that all those $500-2000 serviceable but loving junky clunkers that poor people used to drive got crushed because the gov't was frequently offering way more on the incentive than they were worth. This was basically a giant hand job to the car industry (it happened right after the '08 crash and played a big role in floating the industry until the economy bounced back) and coupled with an explosion in predatory sub-prime auto loans it put a lot of relatively poor people into new cars, for a while at least. Of course if you didn't have junker to turn in but needed a cheap car a few years latter, well, you're SOL.

JnnyThndrs posted:

Used cars today are more expensive across the board because everything is pricier, plus the average car will run 150-175,000 miles instead of 100,000 miles, so high-mileage vehicles are more valuable than they used to be. But you can still find ugly-looking shitpiles that run OK for a couple grand, Craigslist is full of them.

maskenfreiheit posted:

you live in a country with universal health care, it's a bit dumb to tell an american "oh just save the money up!", ok buddy ill schedule my broken leg for next fiscal year

Mustached Demon posted:

57% of American households have less than $1000 in savings. 39% have el zilcho.

Guess I'll link source

Pilsner posted:

If you can't save up like $400 a month for 12 months (to buy a perfectly drivable $5k car), what business do you even have owning a car? Insurance, fuel, repairs, tires, taxes, and so on. This is basic economics. Owning a new car is not a human right. You could just as well argue that buying a new car that costs you, for example, $500 per month in payments, will shatter the savings you need for future medical emergencies.

Pilsner posted:

If you can't save up like $400 a month for 12 months (to buy a perfectly drivable $5k car), what business do you even have owning a car? Insurance, fuel, repairs, tires, taxes, and so on. This is basic economics. Owning a new car is not a human right. You could just as well argue that buying a new car that costs you, for example, $500 per month in payments, will shatter the savings you need for future medical emergencies.

If someone has less than $1000 in savings, how exactly are they putting down money on a new car from a dealership then? I'm talking against walking into a dealership and buying a car on a downpayment/loan "deal" here, and recommending buying used for cash instead.

JnnyThndrs posted:

Old Toyota trucks are goddamn completely insane when it comes to cost - they’re perfectly fine vehicles, but in no way justify the prices people ask/pay for them. Rangers are every bit as tough and reliable as Toyotas, and they’re literally half the cost.

Pilsner posted:

If you can't save up like $400 a month for 12 months (to buy a perfectly drivable $5k car), what business do you even have owning a car?

Pilsner posted:

$2000 is not a lot of money in my opinion. If you can't save up $2k over the span of a few months, why borrow money to buy a new car at horrendous rates? The money will quickly be burnt in interest and fees.

Pilsner posted:

If you can't save up like $400 a month for 12 months (to buy a perfectly drivable $5k car), what business do you even have owning a car? Insurance, fuel, repairs, tires, taxes, and so on. This is basic economics. Owning a new car is not a human right. You could just as well argue that buying a new car that costs you, for example, $500 per month in payments, will shatter the savings you need for future medical emergencies.

If someone has less than $1000 in savings, how exactly are they putting down money on a new car from a dealership then? I'm talking against walking into a dealership and buying a car on a downpayment/loan "deal" here, and recommending buying used for cash instead.

RocktheCaulk posted:

I got zero percent financing on my car, so yay Subaru.

quote:

“Essentially, the dealers are not selling cars. They are selling bad loans,” said Adam Taub, a lawyer in Detroit who has defended consumers in hundreds of these cases.

quote:

Subprime lenders are willing to take a chance on these risky borrowers because when they default, the lenders can repossess their cars and persuade judges in 46 states to give them the power to seize borrowers’ paychecks to cover the balance of the car loan.

quote:

Most borrowers can’t afford lawyers and don’t show up to court to challenge the lawsuits. That means the collectors win many cases, transforming the debts into judgments they can use to garnish wages.

quote:

Almost 9.7 percent of subprime car loans made by non-bank lenders -- including private-equity-backed firms catering to car dealers -- became 90 or more days past due in the third quarter, the highest annualized rate in more than seven years, according to the New York Fed’s quarterly report on household debt and credit. That’s more than double the 4.4 percent rate for subprime loans made by traditional banks, a number that’s been falling pretty steadily since the end of the financial crisis.

quote:

The strategy at Credit Acceptance, which has a market value of $4.4 billion, is yielding big profits. The Michigan company said its return on equity, a measure of profitability, was 31 percent last year — more than four times Bank of America’s return.

quote:

And collecting on the debt is a critical part of the business. The first item on the quarterly earnings of Credit Acceptance, the large subprime auto lender, is not the amount of loans it makes, but what it expects to collect on the debt.

quote:

Repossessions can shatter credit. Like a bankruptcy, repossessions stay on a consumer’s credit report for seven years.

But repossessions are also a cornerstone of the buy here, pay here business model. According to Shilson of the National Alliance of Buy Here, Pay Here Dealers, one-third of buy here, pay here contracts nationally end up in default, which most often results in repossession.

The amount of time between a missed loan payment and when the car can be seized is generally set by state law. Many car dealers also offer an additional 60- or 90-day grace period before repossessing a car.

Still, the Times’ examination found that some buy here, pay here dealers have repossessed a car in as little as two days, as one consumer told the Times in complaining about Car Credit in Tampa. Car Credit did not return requests for comment.

quote:

The company, for example, expects a 72 percent collection rate on loans made in 2014 — the year that a used 2009 Volkswagen Tiguan was repossessed from Nina Lysloff of Ypsilanti, Mich.

With all the interest and fees on her Credit Acceptance loan factored in, the car ended up costing her $28,383. Ms. Lysloff could have bought a brand-new Volkswagen Tiguan for $22,149, according to Kelley Blue Book.

When Ms. Lysloff fell behind, the trade-in value on the car was a fraction of what she still owed. Last year, Credit Acceptance sued her for $15,755.

quote:

U.S. Bank is pursuing Tara Pearson for the $9,339 left after her 2011 Hyundai Accent was stolen and she could not pay the fee to get it from the impound lot. When she purchased the car in 2015 at a dealership in Winchester, Ky., Ms. Pearson said, she explained that her only income was about $722 from Social Security.

Her loan application listed things differently. Her employer was identified as “S.S.I.,” and her income was put at $2,750, court records show.

quote:

The numbers kept getting worse for Jeremy McPeek. It started with paying $2,600 down and getting saddled with a high-interest loan on a car worth $5,200. Then came the repairs. Just two weeks in, the engine started knocking and the dealer told him it was shot — so McPeek told the dealer to just collect the car.

The twist: the finance company reported it as a repossession, plunging McPeek’s credit score from 620 to 500.

quote:

At the time, her credit score was about 560 because her identity was stolen when she was 19, Garcia said. She figured that even with a 23 percent interest rate, the biweekly payments would help her build credit.

Garcia said she was never asked her income. She, and others, describe a rushed and confusing process once a car was picked out. Under her sales contract, she would have paid about $18,000 over four years on a car valued by Kelley Blue Book for roughly $5,000. But numerous mechanical issues, including a dead battery that resulted in her physically pushing her car back to the dealer, eventually forced her to trade in the car at another lot. She had already paid about $10,000 to get a trade-in credit of about $7,500.

quote:

Santander Consumer USA, which provides about one in five auto loans nationwide, is fiercely pursuing delinquent borrowers who have gotten mired in debt for financial products they cannot afford and should probably have never been sold in the first place. Aggressive debt collectors could be one factor in the tens of thousands of car repossessions that borrowers have endured, which might in turn lead to an even deeper financial crisis by depriving borrowers of perhaps their household’s only valuable asset. [Santander] has come under fire for unethical sales tactics amid the new subprime feeding frenzy.

Interviews with current and former Santander workers indicate that the company incentivizes employees to “service” debts by steering borrowers to the costliest, riskiest repayment plans. Under an incentive system that rewards performance based on how rapidly and ruthlessly they can squeeze payments from clients, a pressure-cooker office climate pushes workers to skirt ethical corners. The report found that workers press clients toward obtaining “extensions, temporary reductions in payment plans, and loan remodifications that ultimately generate more interest and fee income for Santander.”

Collection workers recalled being coached on how to deflect customer complaints with placating statements and misleading reassurances about the prospects of resolving their debts. The script is rigidly worded to restrict workers from discussing individuals’ economic situations, with “little time or incentive to provide customers with substantive guidance for their individual situations”—suggesting that the company prioritizes wringing out repayment over protecting the customer’s finances.

According to Molly McGrath, author of the report, “Santander’s metrics and incentive system…directly tie collections practices to keeping consumers in bad loans, whether it is through giving out loan extensions, giving a customer a [stopgap temporary deferment]…or in continually reinstating defaulted loans or giving a customer back a car that had been repossessed.” McGrath observed “an environment where employees may inadvertently steer customers into accepting these loan products without a clear understanding of their risk or impact.”

The risky loan terms that Santander pushes seems to draw especially high-risk borrowers, according to the report: “In 2016, the average term for Santander’s loans was 70 months and the average customer payment to income ratio was more than 10 percent. With loans like this, borrowers get ‘upside down’ on their loans very quickly.”

Zodijackylite posted:

Blue Footed Booby posted:

You're a loving moron.