Author Topic: 56% of New Car Loans are 7 Years - CBC Video  (Read 2988 times)

kfire20

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56% of New Car Loans are 7 Years - CBC Video
« on: October 24, 2018, 06:40:10 AM »
3 yrs. car-free for me as of last week. And I couldn't be happier.  But I use to be this person.

https://www.cbc.ca/news/thenational/debt-nation-how-car-loans-are-fuelling-financial-problems-for-canadians-1.4875766
« Last Edit: October 24, 2018, 06:56:46 AM by kfire20 »

Slee_stack

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Re: 56% of New Car Loans are 7 Years - CBC Video
« Reply #1 on: October 24, 2018, 12:55:49 PM »
3 yrs. car-free for me as of last week. And I couldn't be happier.  But I use to be this person.

https://www.cbc.ca/news/thenational/debt-nation-how-car-loans-are-fuelling-financial-problems-for-canadians-1.4875766
A 7 year loan is only acceptable if it is for a Big Ass Truck.


zolotiyeruki

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Re: 56% of New Car Loans are 7 Years - CBC Video
« Reply #2 on: October 24, 2018, 01:48:14 PM »
3 yrs. car-free for me as of last week. And I couldn't be happier.  But I use to be this person.

https://www.cbc.ca/news/thenational/debt-nation-how-car-loans-are-fuelling-financial-problems-for-canadians-1.4875766
A 7 year loan is only acceptable if it is for a Big Ass Truck.
And since BAT isn't acceptable around here, the 7-year-loan is therefore unacceptable under any circumstances! :P

I'm curious--how long do people typically hold on to brand-new vehicles?  This article says that it's a hair under 6 years, but that article is from 2015.

exterous

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Re: 56% of New Car Loans are 7 Years - CBC Video
« Reply #3 on: October 24, 2018, 05:54:28 PM »
I like how the only two options are:
An unreliable car
Or
A new, expensive car on a 7 year loan

If only there was some sort of second hand car market where you could get reliable cars like a Honda or Toyota for less and maybe only need a 3 year loan if that

Fomerly known as something

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Re: 56% of New Car Loans are 7 Years - CBC Video
« Reply #4 on: October 25, 2018, 06:58:38 PM »
I love the 7 year car loan, OK only because  since July I've now think of my time left before FIRE in terms of a 7 year car loan.  81 months, not that I'm counting or anything.

ixtap

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Re: 56% of New Car Loans are 7 Years - CBC Video
« Reply #5 on: October 25, 2018, 07:09:24 PM »
3 yrs. car-free for me as of last week. And I couldn't be happier.  But I use to be this person.

https://www.cbc.ca/news/thenational/debt-nation-how-car-loans-are-fuelling-financial-problems-for-canadians-1.4875766
A 7 year loan is only acceptable if it is for a Big Ass Truck.
And since BAT isn't acceptable around here, the 7-year-loan is therefore unacceptable under any circumstances! :P

I'm curious--how long do people typically hold on to brand-new vehicles?  This article says that it's a hair under 6 years, but that article is from 2015.

"So even if you plan to own a car forever, the statistics are against you... you might simply decide it's time to upgrade to a newer model."

Ok, but if the average age of cars is 11 years, I can, statistically speaking, likely keep my new car for more than six years, right??

kms

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Re: 56% of New Car Loans are 7 Years - CBC Video
« Reply #6 on: October 26, 2018, 07:31:34 AM »
Earlier this week I was looking at possibly financing a used $14k car to boost my credit score (once you've reached 750 it's getting increasingly hard if you don't have any debt and keep paying off your credit cards each month...). I was considering a 50/50 financing scheme over 12 months yet despite the low amount of just slightly north of $7,000 the only terms available in my bank's car loan calculator were 60, 72, and 84 months.

FML.

TheAnonOne

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Re: 56% of New Car Loans are 7 Years - CBC Video
« Reply #7 on: October 28, 2018, 09:19:32 PM »
Earlier this week I was looking at possibly financing a used $14k car to boost my credit score (once you've reached 750 it's getting increasingly hard if you don't have any debt and keep paying off your credit cards each month...). I was considering a 50/50 financing scheme over 12 months yet despite the low amount of just slightly north of $7,000 the only terms available in my bank's car loan calculator were 60, 72, and 84 months.

FML.

Finance a car and pay interest / headache to get a higher credit score so you can..... borrow more money?

kms

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Re: 56% of New Car Loans are 7 Years - CBC Video
« Reply #8 on: October 29, 2018, 05:40:37 AM »
Finance a car and pay interest / headache to get a higher credit score so you can.....
.... get a better deal on the mortgage ;-)

The_Big_H

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Re: 56% of New Car Loans are 7 Years - CBC Video
« Reply #9 on: November 01, 2018, 09:47:45 PM »
$32,000 for a KIA!

Granted its $25000 US dollars, still too much for a KIA!

I also did not know you could "consolidate" student load debt into a car note.

Kitsune

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Re: 56% of New Car Loans are 7 Years - CBC Video
« Reply #10 on: November 05, 2018, 07:33:44 AM »
So, interesting fact: my sister has a car on a 7-year loan, and it can (in very, very, VERY rare cases) be a smart move.

She had the money to buy the car outright.

HOWEVER, apparently the dealership has some sort of kickback with the financing company, which meant that she got the car for about 2K LESS by financing it (aka: significantly below recommended value), and she got the financing on 0% interest.

So, she did that, and then stuck her money somewhere where it MAKES her money, and got on with life.

... I'm willing to bet that's not the standard approach of people with 7-year car loans though.

JAYSLOL

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Re: 56% of New Car Loans are 7 Years - CBC Video
« Reply #11 on: November 16, 2018, 10:13:10 PM »
I've started to hear lots of commercials lately for Jeeps on a 96 month loan.  Also, I often go by a car dealer that sells used luxury vehicles and every vehicle has the bi-weekly payment posted on the window in huge letters with no mention of total price or how many months you need to pay that amount :/

scottish

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Re: 56% of New Car Loans are 7 Years - CBC Video
« Reply #12 on: November 17, 2018, 05:22:28 PM »
That's because you get paid every two weeks.   The way to decide if you can afford a car is to see how much of your paycheque you need to spend on the payments.  Duh!

SnackDog

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Re: 56% of New Car Loans are 7 Years - CBC Video
« Reply #13 on: November 17, 2018, 05:29:45 PM »
I guess IF it was 0% interest and IF you got a great price it could be a good deal compared to shorter terms.

Gronnie

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Re: 56% of New Car Loans are 7 Years - CBC Video
« Reply #14 on: November 21, 2018, 12:12:42 PM »
I've got the cash to payoff my hybrid (my only debt) sitting in savings earning 1.1% more than my loan is costing me (for now, and interest rates on savings keep increasing).

I just autotransfer the amount to checking each month and autodraft the car payment, and keep the difference in interest.

soccerluvof4

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Re: 56% of New Car Loans are 7 Years - CBC Video
« Reply #15 on: November 22, 2018, 12:02:06 PM »
7 Years is nuts period! People can justify anything if they want but it doesn't make any sense.

Arbitrage

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Re: 56% of New Car Loans are 7 Years - CBC Video
« Reply #16 on: November 29, 2018, 12:38:27 PM »
$32,000 for a KIA!

Granted its $25000 US dollars, still too much for a KIA!

I also did not know you could "consolidate" student load debt into a car note.

Guess you haven't paid attention to the Kia Stinger GT!  Briefly crossed my radar before embracing FIRE and bike commuting. 

eav

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Re: 56% of New Car Loans are 7 Years - CBC Video
« Reply #17 on: November 29, 2018, 01:33:58 PM »
Keeping 0% for 7 years to funnel money into investments instead is enticing, but just the principle of taking 7 years to pay off a car is insane to me. Anything more than a 4 year loan and I'd start to feel like I was making a bad decision.