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Old 02-04-2020, 01:15 PM
 
3,467 posts, read 1,090,032 times
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Quote:
Originally Posted by USNRET04 View Post
I have a friend that works at a "buy here/pay here" lot. Business has been down for the last two years due to potential customers now have the ability to get regular loans due to better employment opportunities for them.

As for the customers they do have, most of them are dead beats. He says the owners just keep selling cars to these folks even though they have had previous repossessions of vehicles.
That is not what is happening. The reason more and more people are able to get those loans is because the car dealerships are desperate. Every day there are radio and tv ads saying "No credit, bad credit, we can get you approved...…….no down payment needed, we have a surplus of cars and need them gone !"

There is a tv ad for (I think) Drivetime, where they say they get 97% of applicants approved with almost no money down. This is all a recipe for disaster, as soon as those people start missing payments, the repo guys will be working full time.

I have seen this exact same scenario in the 2008 era, and I remember it very well. Evidently, a lot of people learned nothing from it and are blindly repeating the same mistakes they made back then.
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Old 02-04-2020, 02:08 PM
 
19,874 posts, read 22,111,823 times
Reputation: 29924
Quote:
Originally Posted by Bubble99 View Post
Most Americans can't pay their mortgage or car loan these days and it seems they back to allowing subprime car loans these days and subprime mortgage for their home.


How is this legal? I thought subprime car loans and subprime mortgage are not legal?


What is going on that most Americans can't pay their mortgage or car loan these days? I know the Auto industry is not doing well.

That Americans are that in debt they cannot pay the mortgage and car loan these day or just don't make enough money at their job.

--
Subprime loans are not illegal. So if Joe’s auto sales gives you a in house subprime loan it’s perfectly legal. Same with Joes Bank-r-us. He can give you a loan in house. If he tries to sell the loan he has to follow certain guidelines.

Plenty of people get in over their heads with borrowing. And plenty of people don’t
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Old 02-04-2020, 02:16 PM
 
5,244 posts, read 1,393,466 times
Reputation: 6156
Quote:
Originally Posted by WMak70 View Post
That is not what is happening. The reason more and more people are able to get those loans is because the car dealerships are desperate. Every day there are radio and tv ads saying "No credit, bad credit, we can get you approved...…….no down payment needed, we have a surplus of cars and need them gone !"

There is a tv ad for (I think) Drivetime, where they say they get 97% of applicants approved with almost no money down. This is all a recipe for disaster, as soon as those people start missing payments, the repo guys will be working full time.

I have seen this exact same scenario in the 2008 era, and I remember it very well. Evidently, a lot of people learned nothing from it and are blindly repeating the same mistakes they made back then.
Plus, financing through car dealerships seems to be a little more relaxed than applying through a bank directly.

"Top tier" for a lease deal might require a 705 FICO (they may use Fico Auto 8 or 9, or they might not use a FICO Auto Score product at all). Meet that number, and not have some crazy DTI ratio and you will get the promotional rate.

Now, try that as an individual through a bank, and you could be rejected for any number of reasons. Your 710 FICO might be good enough on paper, but you could be denied on many grounds: Too many accounts recently opened, outstanding balances too high in relation to available credit (distinct from DTI, your payments may "fit" into a DTI that LOOKS low), old derogatory accounts.

What I'm saying is, when you don't pump as much business as a car dealer does and you're applying as an individual, it has been my experience that a bank will pull the plug on a loan for more reasons than they will for an applicant through a dealer's financing. You could have a 710 with a perfect payment history and 5% utilization because your credit is fairly young. You could also have a 710 because 2.5 years ago you had a series of late payments and a collections account, but now you have 5% utilization and much older accounts than the first applicant. A bank will weigh these differently for a retail customer, a dealer's lenders will tend to not see as much a distinction.
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Old 02-04-2020, 04:09 PM
 
4,508 posts, read 3,306,134 times
Reputation: 4314
Quote:
Originally Posted by ChessieMom View Post
An EIGHT YEAR car loan??? That makes no sense. ( of course a 6 or 7 year car loan makes no sense to me either.). I have not heard of an 8 year car loan. At least not yet. And as far as the article, America can certainly afford cars…the problem is that there are too many idiots that want to buy things that they canNOT afford.
8 year car loans are typically for people looking to buy BMW or Mercedes vehicles. The 8 year car loan has existed for these two brands for a while now.
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Old 02-04-2020, 04:31 PM
 
5,244 posts, read 1,393,466 times
Reputation: 6156
Quote:
Originally Posted by weezerfan84 View Post
8 year car loans are typically for people looking to buy BMW or Mercedes vehicles. The 8 year car loan has existed for these two brands for a while now.
I did not know this existed. I've heard about an 8 year loan, however, never seen one in a dealer's figures. To be fair, I've never shopped a new Mercedes or BMW.

Other brand-specific nuances that may be interesting to know is that while leases are commonly offered with 10,000/12,500/15,000 miles, Lexus and Toyota do offer 18,000 mile leases. Not sure if any other brand does this.
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Old 02-04-2020, 04:37 PM
 
1,003 posts, read 599,185 times
Reputation: 2928
Quote:
Originally Posted by Stockyman View Post
Most recent article I could find shows more than 7 million Americans are 90 days behind their car payments.

https://www.cnbc.com/2019/02/12/a-re...-payments.html
Yup. Which is a grand total of 6% of Americans with car payments as I already stated. Meaning 94% are making their payments. The OP is completely wrong.
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Old 02-04-2020, 05:43 PM
 
27,722 posts, read 34,534,635 times
Reputation: 35853
Quote:
Originally Posted by weezerfan84 View Post
8 year car loans are typically for people looking to buy BMW or Mercedes vehicles. The 8 year car loan has existed for these two brands for a while now.
Like I said, I’ve never heard of it, and it makes no sense. Most cars depreciate so quickly that their value after eight years could leave someone upside down on such a long loan. I’m really surprised that the banks do it.

Regardless, people are foolish to use them.

https://www.npr.org/2019/10/31/77340...ch-your-wallet
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Old 02-05-2020, 06:42 AM
 
Location: North Dakota
8,015 posts, read 9,575,304 times
Reputation: 11845
Quote:
Originally Posted by Bubble99 View Post
Most Americans can't pay their mortgage or car loan these days and it seems they back to allowing subprime car loans these days and subprime mortgage for their home.


How is this legal? I thought subprime car loans and subprime mortgage are not legal?


What is going on that most Americans can't pay their mortgage or car loan these days? I know the Auto industry is not doing well.

That Americans are that in debt they cannot pay the mortgage and car loan these day or just don't make enough money at their job.

--
People,don't know how to manage their money and costmofmooving has gone up. Also you have people living with mommy and daddy to save up for a house and while they make the down payment, they can't actually afford to maintain the payments. Plus the belief is if they lose the house back to mommy and daddy's they go. My theory anyway.
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Old 02-05-2020, 07:02 AM
 
Location: Exeter, NH
5,364 posts, read 4,535,834 times
Reputation: 5889
If you can't afford your mortgage or car payment, you are buying a house or car THAT YOU CANNOT AFFORD.
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Old 02-05-2020, 08:40 AM
 
970 posts, read 354,926 times
Reputation: 2551
I notice that most people who can't pay their mortgage or car loan because they don't have plans and goals in life from young to study hard, work hard and spend and save wisely. Instead, they'd rather to live like parasites, or when they had a job and a little bit money, they spent on cigarettes, drugs and booze or gambling, or they f'd up too much (bad words) or had stupid sex (better words) and pooped babies out constantly without thinking of their own and their children's future. And they whine Poor Me or blame on other people and society not to support them or "bad" economy.
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