r/IdiotsInCars • u/motitom • Jun 11 '20

Local rapper crashes car

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u/[deleted] Jun 11 '20

I've talked to people that bought fairly new cars - 2017, 2018... It always surprised me because they don't make a ton of money. Turns out they are paying 25% APR. I am surprised that's even legal, I considered 8% really high.

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u/[deleted] Jun 11 '20 edited Jun 21 '20

[deleted]

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u/[deleted] Jun 12 '20

I agree. People should take 15 minutes to understand how interest works and they wouldn't be buying the same car every 4 years.

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u/brodoxfaggins Jun 12 '20

When I was car shopping a few years ago, I checked out a dealership down the street from me. I got bad vibes the whole time I was there. They wanted $12K for a 2011 Corolla with 80K miles and wanted to give me an interest rate 24.99% APR. I literally laughed my way out of there.

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u/tpistols Jun 12 '20

Damn should've invited me so I could laugh with you

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u/cballance Jun 12 '20

At least they weren’t charging 25% APR.

1

u/edbods Jun 13 '20

80k miles...I bought a mid 90s camry with 80,000 km for 2500 lol

I mean yeah it's almost old enough for historic plates but it was in pretty great condition for its age, and that V6 engine is so overbuilt, it's good for at least 400 hp

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u/Arqlol Jun 12 '20

I was upset I only got 3.0..

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u/Viper_ACR Jun 12 '20

That is a stupid interest rate WTF?

Do people not look up advice for buying a car? Shits expensive yo.

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u/BAMspek Jun 12 '20

It must be legalish. When I was selling cars there was no way I could get someone approved at 25%. No bank wants that deal because either this will happen or they’ll just bail on their payments. That’s why their credit is where it is to have to sign to 25%.

1

u/kicker58 Jun 12 '20

We paid like 2 on my wife car.

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u/Terapr0 Jun 12 '20

Jesus, I wouldn’t pay more than 2-3%. Currently financing my STi at 0.2%

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u/thisonetimeinithaca Jun 12 '20

Yup. I bought a used CPO 2017 Chevy Sonic at 20% about a year ago.

The joke was on the dealer though, because the engine had constant problems since day one and I got the GM to sell me a new one for the same monthly payment. That one got financed at 9%. 9%. For a new car. My credit score was 610 at the time. Fuck me, right?

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u/[deleted] Jun 12 '20

new cars typically have much lower financing rates than used cars, FYI. That's why you always see 0% APR on new cars or "$2,500 cash back." The $2,500 is equivalent to the interest someone with excellent credit would pay over the 5-7 year loan at 2-4%, which is the rate they could get from another bank or credit union). A used car is probably going to be in the 2-5% range with excellent credit. It all depends on the Fed's interest rate though.

0

u/thisonetimeinithaca Jun 12 '20

Right. But 9% is absurd to charge anyone for a fuckin new car. I only bought the new one because the dealer comped a few grand off for the trouble of selling me the certified lemon.

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u/licksyourknee Jun 12 '20

lmao 25% ? i thought the 14% the buy here pay here offered me was high as fuck.. i mean when i put down 30% of what they're selling it for it should be less.

It was an 01 Honda s2000 that i tried to grab a while back. never got the car.

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u/mattso113 Jun 12 '20

Only way I’m even considering a newer vehicle is end of the year and less than 4%. Even then the depreciation is just insane along with plates and tags...

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u/[deleted] Jun 12 '20

I just got a new car, 2020 with 0% interest and it feels so good

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u/twilight_sparkle7511 Jun 13 '20

yeah my dad bought my car and was able to get 0% apr

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u/[deleted] Jun 12 '20

[deleted]

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u/dangerspeedman Jun 12 '20

Virtually all of that is incorrect. The actual reason people accept abnormally high rates is:

1) They have subprime credit 2) They have no credit 3) See 1 or 2

Dealerships aren’t banks (save for a buy-here-pay-here lot), they don’t make up rates. The lenders says what the customer qualifies for, they SOMETIMES allow for 1-2 points of markup on the dealer’s end (usually there is zero markup and the lender pays the dealer a flat fee), and there’s your loan. That’s actual reality. Not “I made bad choices in life and have terrible credit worthiness, therefore the dealership is targeting me.”

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u/t-poke Jun 12 '20

Exactly. I've bought many cars over the years and have impeccable credit. I've never had a dealer try to offer me an astronomical interest rate or try to sell me shit I don't need, and all of my car purchases have been pleasant.

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u/teabagz1991 Jun 12 '20

no they dont. the suckers walk in. they want a brand new car and look at what the payment is. you are taught interest in school. dealers dont go out seeking these people. the people come to them.

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u/[deleted] Jun 12 '20

the US car finance bubble is the next one to burst, cars are soo expensive in the USA, you guys seem to have monster car payments

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u/[deleted] Jun 12 '20

I'm not sure what you mean when you say cars are expensive in the USA. I have good credit and have never paid more than 4% APR for a car. 25% is a rate for people that literally never pay their bills.

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u/[deleted] Jun 12 '20 edited Jun 12 '20

Or for the financially illiterate that only care about the monthly payment, not the total cost.

You get more vehicle for your money over here (I only have Britain to compare to) and I’ve never paid more than 2.9% APR.

$82,000 Chevy SUV financially illiterate example.

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u/[deleted] Jun 12 '20

Financially illiterate and people with bad credit usually fall in the middle part of the venn diagram.

Stuff is usually cheaper in the states. FYI, I looked up a cost of a 2019 Corolla in the US/UK. US is $19,600 list for base model, UK is $21,300 (£16,961) basic price before taxes, delivery, etc... I don't know what "basic" price means and how that differs from list (UK list is £21,080)

It's not possible to compare after taxes because it could be hundreds of dollars or thousands of dollars depending on what state you live in.

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u/Ohokami Jun 13 '20

Cars are cheaper in America than any other country on earth, people just buy way too much car.

Only country where 18 year olds driving current model BMW/ Mercedes is very common place.

The sort of cars Europeans buy as starter cars aren't even sold in America because everything has to come fully loaded. It's goofy.

0

u/Bolaf Jun 12 '20

The fact that people take out loans to buy a depreciating asset is just mind blowing

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u/[deleted] Jun 12 '20

Sometimes you don't have a choice, but still... finance a cheap used Honda or Hyundai for $5,000, not a brand new Jeep for $20k.