Why are people willing to pay insane amounts of money to finance a car?

[Tone C]

What do you mean? Its payed off, we own the POS now, lol. But it ran great for the 5 years we had it. Its about time for a new-ish car under 10 grand, lol

I mean, you bought the car 4 years after it was new , rule of thumb over here is as soon as you drive a new car off the forecourt the price drops... and of course it depreciates over the years....


So , hopefully you got a goodish car for a good price and didn't lose money straight away from new.

 

[Slobodan]

@Slobodan financed his Yugo, I think its 450 USD / month.
But you wont hear him complain.. He loves his Yugo.

It is #1 communist automobile!

 

[Flower2dPeople]

It is #1 communist automobile!

Is it @ferrisjso approved?

 

[Contempt]

Thats an insane amount of money for a car. My wife bought a 2015 Ford Cmax Hybrid for $7,000 back in 2019 , payments were $150/mo. We payed it off in 2021.

$735 is an insane amount? Really?

 

[Jesus X]

The average monthly car payment for new vehicles in 2024 is approximately $735, while the average payment for used cars is around $523. These figures reflect a slight increase from the previous year. There are people that I know personally paying upwards of $1000 for a truck, not a luxury sports car but a stupid truck. Investing in something that yields a loss and is a depreciating value is nefarious work. Buying an expensive car to impress strangers that don’t give a damn is ridiculous. What’s even more diabolical is that these same people are the ones getting their cars repoed within a year or two.

Some ignoramus at my job financed a 120 k Dodge TRX a ball park estimate would say that his car note is like 2000 dollars a month. Maybe slightly less depending on the down payment. I make more money than him and I would never finance a car over 30 grand.

 

[Killer Whale]

Get a good rate and your money does better for you in the bank/stocks. No point in paying in full when you can make more money from the interest than you pay on the financing.
Financing cost vs interest earned.

 

[jx820]

It's two fold.

1. Basic finance/economics/money management education among the general population is horrible.
2. Human beings are not good at comprehending scale.

A car is such a horrible place to put your money.

I did spend a bit on my wife's car to get something safe and reliable for my kids, but I drive a beater. I may need to upgrade for professional (image) reasons soon, and I'm kind of annoyed about it. My cheapness is in direct conflict with my ambition.

 

[ObsoleteSoul]

Not sure. It doesn't compute in my mind either.

Best to buy something cheap with cash, drive it while saving, trade it in for a better one, and slowly work yourself up until you buy something nice straight outright. Though most don't want to do that and go right to something nice they can barely afford. If someone wants to throw their money away, that is on them.

 

[Dizzy]

 

[ColemanwastheGOAT]

Self employed folks can expense the payments on their taxes, but wiser self employeds save, pay cash, and expense the vehicle’s amortized depreciation on their taxes.

It takes a little patience, even if you’re not self employed.

-When you’re poor, drive the least expensive thing that suits your needs, regardless if it’s embarrassing.
-Work harder and longer than everyone else while banking the surplus.
-When the banked surplus reaches a certain milestone, upgrade the vehicle paying cash. You’ve been earning interest in the meantime instead of paying it, and if things are unexpectedly tight, you aren’t penalized for missing payments.

Many people unfortunately aren’t disciplined enough for this approach, and will jump on a payment as soon as their credit score allows.

Also don't 'bank the surplus' in a savings account. Put it in a higher yield 'riskier' GIC which even on the low end of the estimate will contribute more interest even than a high interest savings account.

 

[TeTe]

I can maybe see with a truck if the person uses it for work and writes off the expense.

Personally I just like buying used cars because I let the person who bought it new take the depreciation hit.

I was paying $450 a month for my 2019 Corvette and now I pay $400 a month for my 2017. To me thats not much for a car that originally cost (with the options I have) $75k. But I also put more than 50 percent down on my current car.

I plan on refinancing too when rates drop even further because Im paying way too much interest for having a credit score over 800. Fucking Fed

 

[Spam On Rye]

I blame the jews for creating hip hop.

 

[Cajun]

The average monthly car payment for new vehicles in 2024 is approximately $735, while the average payment for used cars is around $523. These figures reflect a slight increase from the previous year. There are people that I know personally paying upwards of $1000 for a truck, not a luxury sports car but a stupid truck. Investing in something that yields a loss and is a depreciating value is nefarious work. Buying an expensive car to impress strangers that don’t give a damn is ridiculous. What’s even more diabolical is that these same people are the ones getting their cars repoed within a year or two.

Bought my wife a suburban and paid 800 -900 or so a month so with insurance around 1000. You could pay a mortgage for that. I myself see no point. The only car I paid over 30k was the one I bought to take the wife out on our first date.

 

[method115]

I never understood it either. My current payment is $400 and honestly even that is to much for me. I just dont like cars or putting money into them so any amount of money is to much for me really.

The last time I bought a car the dealership was insane. They wanted me to agree to a monthly payment without knowing the loan information at all. Wouln't give me the APR or nothing. It wasn't until I got to the financing guy that I got the info and once I started saying how capital one monthly payments were much lower they suddenly started dropping my monthly payment lower and lower.

I remember he kept asking me how much could I pay. I told the guy I could pay $1000 a month if I wanted to but I'm not here to pay as much as possible, I'm here to pay as little as I possibly can.

 

[Romulas]

For everyday cars or if you want a bit of luxury that no one will scoff at, purchasing a 2 year old Toyota or Lexus that came off a lease is the best financial move that takes the least amount of effort.

Most people let their ego choose their vehicle purchase.

 

[560ti]

The average monthly car payment for new vehicles in 2024 is approximately $735, while the average payment for used cars is around $523. These figures reflect a slight increase from the previous year. There are people that I know personally paying upwards of $1000 for a truck, not a luxury sports car but a stupid truck. Investing in something that yields a loss and is a depreciating value is nefarious work. Buying an expensive car to impress strangers that don’t give a damn is ridiculous. What’s even more diabolical is that these same people are the ones getting their cars repoed within a year or two.

Combination of many things

- People are more wreck less and wild with their money.

- Cars are overall just expensive now. A Toyota corolla which is their entry level car is still like $400-450 a month brand new

- New cars pre covid you could get anywhere from 0-3% Apr. Those days are long over, most are like 5-10% now which drives up monthly cost

- Alot of people especially in my area only want trucks or SUVs which are significantly more expensive than sedans.

- Inflated used car prices have killed bang for your buck deals. My first 2 cars where an at the time 5-year-old civic for $7k and a 4 year old Corolla for $9k. Both only had 65k miles. Those exactly 2 cars/scenarios now would be double that price.

 

[TKing]

My girlfriends nephew has a decent job but pretty much chose a truck over a house and he's open that it's mostly for status reasons and to look cool. Dude is paying just under 900 a month for a new gmc truck and is living in a bad part of town in a small apartment.

 

[Lycandroid]

id rather just buy a beat every month then pay 1000 a month

 

[TheNinja]

I bought my first ever new vehicle around 2 years ago. 10yr/100,000 warranty on it. Sure, I could have saved a few grand on a 3-5 year old used, but then you have any sort of issues and it's insanely expensive now b/c everything is electronic and very complicated. I paid for peace of mind.

 

[HeffDoesWant]

I presume no small number of people mix up the terms Tax Deductible with Tax Offset.



My car is financed as I got it with a lower interest rate than my home loan.

It was a strange deal which I believe only worked as the car company wanted to make a local loss and transfer the profit offshore.
First time I ever financed a car, because I know most of the time it's a truly terrible idea.