10 yr Auto loans....yikes!

[ZZman]

A local dealer is now advertising 10 yr loans. I can't even imagine that. I often get bored of a vehicle in 3-5 years. In that time you would still be under water on your loan. I always thought 5 year loans were bad enough.

I guess it was bound to happen for most people to be able to afford the cost of many vehicles these days.

 

[John105]

Well, look at it this way. My most expensive car was $44,700 in 12/06. I borrowed 36 months and put $30k down. At the time, people in the office said, that's dumb. Why would you not lease the vehicle? It's a depreciating asset.

I felt there were 2 reasons. I wanted the car, and I would buy a car for about $15k, the rest is in fact just a luxury.

My desire has tapered off and the types of cars I like today, are around $115k. I'm not going to be able to put down $100k, and finance $15k. So if I had to have the car, I'd likely need a 15 year heloc

 

[KCJeep]

Even 60 months is too long in many cases. My goal is 36, 48 at most and if I can’t afford that I’m looking at the wrong car or need to wait.

I commonly hear of 72s and even 84s which makes me cringe, I can’t even imagine 120.

 

[TiGeo]

Of course! There is no way adding $10-20K on top of MSRP and having $50K cars for average income folks wasn't going to lead to this. It's exactly the same as the housing drama in the 2000s. The great repo fest of 2025 is coming.....

5 years loans used to be the norm for more expensive vehicles and nothing wrong with that IMHO. As always, old-school putting 20% down usually worked to offset that bit depreciation hit on new cars so you were never upside down.

 

[atikovi]

If most people don't have the cash, they shouldn't be buying anything over $25,000.

 

[IndyIan]

A local dealer is now advertising 10 yr loans. I can't even imagine that. I often get bored of a vehicle in 3-5 years. In that time you would still be under water on your loan. I always thought 5 year loans were bad enough.

I guess it was bound to happen for most people to be able to afford the cost of many vehicles these days.

At 5 years, you probably should be even on most toyota's, pickup trucks, maybe not on a lot of other cars. And depending on inflation your car might be worth much more than you owe, or much less...
The high interest rates though hurt too, I don't need any car that badly to pay 6-7-8% interest on for more than a year.

I guess there's lots of people who didn't like math, but like new cars, so this is the loan for them!

 

[NiwradND]

10 year loans will not work on EV as the batteries in alot of those vehicles will be shot before then and car will become worthless. IMO

 

[joekingcorvette]

I have paid cash for all my vehicles for 25 years or longer. Once you start driving a paid off vehicle many people will not go back to borrowing money. Making a vehicle payment then buying new tires and an unexpected repair or a $500 insurance deductible can put many people under water fast. Especially if you have a job loss during that 10 year loan time period. Imagine the interest paid on a 10 year loan.

 

[demarpaint]

Ten year car loans are insane, and a formula for disaster. Two stupid moves, one on the bank writing the loan, and the other on the buyer of the car taking the loan. It might be time to start thinking of going into the repo business. My bet is it will be booming in the next few years, maybe sooner.

 

[brianl703]

It might be time to start thinking of going into the repo business. My bet is it will be booming in the next few years, maybe sooner.

Locally, it's already booming.

 

[PWMDMD]

I'm a fan of 48 months if interest rates are up but did go 60 months on a 0% loan and a 0.9% loan because why not?

 

[demarpaint]

Locally, it's already booming.

And there's plenty more to come is my bet. A great opportunity for the right person.

 

[ZZman]

If most people don't have the cash, they shouldn't be buying anything over $25,000

More then 50% live paycheck to check. More then that don't have emergency savings much less money down for vehicles.

 

[Finklejag]

I will omit I took a 72 month loan on my 2019 VW Golf Alltrack. VW was giving 0% 72 month loans + $4000 off the car. Then VW had a 6 year bumper to bumper warranty for 2018-2019 model years.

 

[Eddie]

I don't agree with any auto loans unless it is 2% under my CD rates.

 

[wpod]

More then 50% live paycheck to check. More then that don't have emergency savings much less money down for vehicles.

We make that choice. It is all about the monthly payments.

 

[brianl703]

And there's plenty more to come is my bet. A great opportunity for the right person.

As an example of how messed up it is now..A friend of mine is in the repo business and a few weeks ago he repo'd a car with an ignition interlock (the kind you have to blow into to get the car to start because you got a DUI).

He's also still repoing cars that have title loans on them from Titlemax, in some cases these loans are a few years old.

 

[demarpaint]

As an example of how messed up it is now..A friend of mine is in the repo business and a few weeks ago he repo'd a car with an ignition interlock (the kind you have to blow into to get the car to start because you got a DUI).

He's also still repoing cars that have title loans on them from Titlemax, in some cases these loans are a few years old.

If the nonsense keeps up might need another truck.

 

[Dave Hess]

Well, look at it this way. My most expensive car was $44,700 in 12/06. I borrowed 36 months and put $30k down. At the time, people in the office said, that's dumb. Why would you not lease the vehicle? It's a depreciating asset.

I felt there were 2 reasons. I wanted the car, and I would buy a car for about $15k, the rest is in fact just a luxury.

My desire has tapered off and the types of cars I like today, are around $115k. I'm not going to be able to put down $100k, and finance $15k. So if I had to have the car, I'd likely need a 15 year heloc

What car did you buy ?

 

[TiGeo]

I will omit I took a 72 month loan on my 2019 VW Golf Alltrack. VW was giving 0% 72 month loans + $4000 off the car. Then VW had a 6 year bumper to bumper warranty for 2018-2019 model years.

There is no one-size fits all here, total cost to own if you keep it for long enough should be just fine with that car. Join the FB AT/GSW group if you haven't, I mod it, great group for these cars!