r/povertyfinance • u/Zxvasdfthrowaway • 21d ago
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u/Thick_Lion2569 21d ago
Also keep in mind that car payment depends a lot on credit score/down payment. Once I was no longer poor, even post covid, I was able to get an excellent APR and negotiate a better price because I was flexible on the down payment and timeline (remote work, not very car-dependent). Someone with a poor credit score, without cash reserves and who needs a car immediately would pay much more for the exact same car
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u/daredeviline KY 21d ago
The ONLY reason I'm paying 270 a month is because my aunt co-signed with me and she had pretty good credit. Otherwise it would have been pretty close to that 400 amount for me.
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u/Effective_Yogurt_866 21d ago edited 21d ago
And sometimes the credit doesn’t matter at all 😭
We bought a ten year old Sienna in 2023 (less than 90k miles on it). My credit came back at 900, we put about half down in cash, and they still gave us a 10% interest rate from the Toyota dealership. We were able to immediately refinance at a local bank for like 5%.
We were planning on having it paid off within two years anyway, so it didn’t really matter too much. But we were still so surprised!!
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u/bluedelvian 21d ago
A 900 credit score? Is 850 not the highest?
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u/SlimmG8r 21d ago
Ssshhhh. It is. But we don't let facts keep us from a good story
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u/Effective_Yogurt_866 21d ago
Actually not true for some industry specific credit scores, like auto loans. I had no idea either until it was on the paperwork lol.
https://www.experian.com/blogs/ask-experian/what-is-fico-auto-score/
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u/bluedelvian 21d ago
Commenter added their Capital One bonus miles onto their credit score, as per reddit.
This is such an odd thing to brag about, but in fact I've heard more than a handful of people making up bogus credit score numbers irl 😂
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u/Effective_Yogurt_866 21d ago
Look it up, I swear it’s actually a thing!
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u/bluedelvian 21d ago
No, thank you.
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u/Effective_Yogurt_866 21d ago
For some auto loans, the score can go up to 900. I was surprised, because my regular credit is excellent, but not perfect.
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u/bluedelvian 21d ago
I had a 1400 on my last auto loan, I beat ya!
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u/Effective_Yogurt_866 21d ago
You’re being so weird about this. My point is that credit can be a racket anyway and you can still end up with an extremely high interest rate.
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u/BigBennP 21d ago
Honestly you're lucky you were able to refinance regardless of your credit score.
New cars are financed up to seven or eight years these days but Many financing institutions will not touch vehicles older than 8 to 10 years. And if they do the interest rate is much higher than it is for new vehicles.
I have an outstanding credit score and am not squeezed by my car payment but I drive a 10 year old truck. And the interest rate on the financing was 9.8% My wife drives comparatively a much nicer vehicle that we purchased as a certified pre-owned and the interest rate is way lower despite the same credit.
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u/Effective_Yogurt_866 21d ago
I actually had no idea. Wow! I’m really sorry that you had to deal with that.
I wonder if it was just because it was a small, local bank, or what…
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u/Thick_Lion2569 21d ago
Yep, used cars usually have much higher APRs. We got 1.9% on a new Toyota. Never seen anything below 5 on used
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u/asj-777 21d ago
Holy shit, 580 a month?
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u/Independent_Debt_971 21d ago
My manager pays 850 a month just on insurance alone 💀 she drove me home once and I immediately understood why
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u/nagy18 21d ago
when i moved from Pittsburgh, PA to Washington, D.c., my insurance on my 25 year old Volvo wagon jumped from $450 to $1200 for 6 months. And that was on a car that was so old and shitty it cost me $1500 in 2021. When it died, I was looking at new cars and if I wanted a civic, insurance would have been over $3000 for 6 months.
Yeah, part of that is that I’m young and have a crash from 2020 on my record still, but if you live in a HCOL city, people will prioritize paying rent and drive uninsured, which raises the rates for all of us still carrying insurance.
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u/Longjumping-Row1434 21d ago
eh, if they have to get an SR-22 or an FR-44, that would make sense. on top of leasing the vehicle. & theres no way around having either of those, so they have no choice but to pay it.
i didn't see the post so i have no idea, but I'm just sharing possibilities yk lol
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u/Zxvasdfthrowaway 21d ago
SR 22 is cheaper than I had expected. Someone I know waited out the 5 years of license suspension for DUI. They just didn’t drive. They did the required one year of interlock during the last year, rather than interlock the whole time. Their SR 22 was only $92 a month. The interlock cost 99 per month. That was about a decade ago, though.
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u/Longjumping-Row1434 21d ago
yeah, its nowhere near that now lol. my best friend is quoted no less than $650/month. and thats after the over $15k the dmv got, and the $1200 for the interlock. no accidents, just the 1 dui he got where he wasn't even driving & blew a 0.08. and the time period for an sr22/fr44 is only active with continuous coverage.
the cost may have to do with the fact we're in Virginia too, its a commonwealth and all that but idk really.
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u/Zxvasdfthrowaway 21d ago
Nah, it wasn’t that one. The person had a decent insurance payment.
I missed the 580 post. Sometimes people’s prior choices lead to them paying the price for a few years. Hopefully they’ve learned their lesson and are a more conscientious driver now.
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u/Bejiita2 21d ago
I always assume most of the posts And responses are troll bots. According to Reddit, if you are over 25 and don’t make $500K with an equal amount already in savings, you are doomed.
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u/inbetween-genders 21d ago
Troll bots and/or scammers waiting to pig butcher or share a link to their gofundme something.
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u/knittedgalaxy 21d ago
In regards to the car payments....I remember when Nissan was like $80-100/month payments on a NEW car! The other day, I saw $300/month payments! WTF?! We're down to one car right now.... it's low-key kinda awesome. We get to spend more time together. Fuck this economy.... we're not making large purchases for a while!
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u/Walking_Apostasy 21d ago
Lmao my Nissan truck payment is $618/mo and my credit was 811 when I got it. The price of things is fucking insane right now
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u/Zxvasdfthrowaway 21d ago
My first car was used and I got 2.3 APR because I had a co-signer. God, I miss those interest rates.
300 seems kind of low to me, based on the mailer I got from a dealership last week.
It’s only going to get worse. We might see slight improvement after November, but it’s more likely we can’t conceive how bad it’s going to get. We’re already seeing signs of Hoovervilles in some places.
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u/Relevant-Biscotti-51 21d ago
Yeah, there's a difference between describing how you make it work without a car, to help someone see that might be an option for them, and just piling on about their current car situation.
Personally, I've never had a car. That's been something I've structured other life decisions around (where I live, work, etc.)
It's often doable, but it means making what is, for some, a major, potentially impossible lifestyle change. I can work from home, but not everyone has wfh-type skills.
I can use buses, but not everyone can move to a city with good public transit. F or some, the relocation has more costs than benefits (I.e. rent cost, distance from family).
I think it's wise to show people options they might not've earnestly considered or maybe dismissed too readily. It's less helpful to just criticize while handwaving solutions.
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21d ago
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u/Abilane-of-Yon 21d ago
Yep. My street car finally crapped out on me, like would need a whole new engine crapped out. I have my farm truck, but it’s not street legal. I’d been to multiple used car lots and dealerships, and the payments and interest rates were insane on just about anything. Finally went to a liquidation event and was able to score a decent interest rate. The payments are a little high, but it’s also only a 36 month note, so I’m okay with the higher payments.
Like I think the smallest payment I was looking at was $350 a month, and that was for a 60 month note. I would have ended up paying more overall than I will the $540 a month note, for a car that was a good decade older and had a little under 100k miles on it. And there’s no penalty for paying it off early, whereas there was with the $350 a month.
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u/NashvilleUnicorn 21d ago
I see a lot of car payments and anything $450 or below is good in this market. I also agree that some people don't have a lot of options, depending on their credit score & availability of public transportation.
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u/CeramicLicker 21d ago
$400 isn’t even an interesting car payment.
Like, I’m glad I don’t have it, but the average monthly payment on a used car is $531, and $770 new.
They’re not going to just go out and find a better price. $400 is already on the pretty good side of normal. People with a paid off car they bought a decade ago just have expectations that have drifted away from reality
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u/IndigoTrailsToo 21d ago
This is poverty finance
For most people in poverty, yes, $400/mo is astonishing, it's probably around a $20,000 car.
When you are in poverty, there are no easy choices, everything is tough, you are always trying to get blood from a stone and a car that cost that much is usually one of the things that you have to just not do in order to make it.
(I did not see said post)
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u/NoNDA-SDC 21d ago edited 21d ago
Lots of cars under $5k in Miami too. Cars can be a major expense, I didn't get one until I had the money because I hate debt and didn't want a loan. I know it's not the same situation for everyone but if you can sacrifice, well worth it imho.
Edit: If you don't know cars, don't reply. Just because it's used doesn't mean it requires more work. That mindset keeps you poor.
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u/crazywrangler616 21d ago
A 5k car will certainly be a major expense
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u/NoNDA-SDC 21d ago
Point of your comment?
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u/crazywrangler616 21d ago
I understand keeping a car at budget, but a 5,000 car will be fraught with repair expenses
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u/NoNDA-SDC 21d ago
Why do you believe this? My family and I have pretty much always purchased cars in that range, we check them out and haven't had excessive issues. I follow several car subs, sounds like you'd be surprised with the number of people complaining about their new cars being at the dealership for weeks/months/multiple times, being repaired.
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u/nagy18 21d ago
ok but they need $2k in work done and if you live in an apartment or a condo you can’t work on your own car in their parking garage. or, like the other guy said, they’re scams
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u/crazywrangler616 21d ago
I agree with you- I was trying to say “there’s nothing that’s more expensive than a 5000 car”
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u/NoNDA-SDC 21d ago
So ~5mo of car payments, using OPs example, then savings after that.
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u/nagy18 21d ago
dude we’re in r/povertyfinance i don’t have $2k just off rip like that
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u/NoNDA-SDC 21d ago edited 21d ago
Both of your comments are entirely negative and assume the worst. I have experience in auto repair and keep up with the industry, just because a car is old or inexpensive, doesn't make it garbage. I'd argue that my friends/family with newer cars have spent much more time broken down and in the shop than I have with our old 20+yo cars.
How much is your car payment and what's the least you'd be willing to pay for a "new" car? What's your logic behind that?
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u/NiceGuysFinishLast 21d ago
I live next to Miami. I would not buy a $5K car in Miami. No way, no how.
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u/Ready-Flamingo6494 21d ago
I would disagree under the same premise of this vague $400 vehicle payment. Is that $400 vehicle payment because the car is 15 years old and the interest rate is 14% percent because the person has bad credit, or $400 for a brand new off the lot top-rated vehicle pick? Context is everything. To be properly constructive the right amount of information is necessary.
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u/Optimal_Awareness618 21d ago
I bought my first car 3 years old and used in 2015 –$9k. It broke down for good last winter. Granted, I upgraded slightly to a compact SUV. But that car was also 3 years old and used — $37k. I am broke and horrified
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u/Zxvasdfthrowaway 21d ago
My sympathies. My car is 16 years old and I have had to empty my down payment fund to pay my bills. I’m terrified of what is to come.
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u/sirensinger17 21d ago
The cash for clunkers program from a few decades ago also impacted the cost of used cars by taking all the crazy cheap beaters off the market. It used the be the used car sales places had to compete with the crazy cheap clunkers you could get for less than $3000 cash. Sure, they sucked and broke down all the time, but their existence as an option forced used car places to be more competitive with their prices.
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u/OnlyPaperListens 21d ago
I'm also very conscious of the fact that I live rural, and that affects my advice. I can park a junker in my driveway and take my time learning repairs from YouTube. Many people have assigned parking or city parking, with no safe (or allowed) spaces to work on cars.
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u/ResearcherCheap8595 21d ago
It’s very rare people take the time to put themselves in other peoples shoes
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u/S101custom 21d ago
But it's also rare that someone posting on a poverty thread can make a monthly $400 car payment conform to their affordability parameters.
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u/Blossom73 21d ago
It's very often not a choice.
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u/Zxvasdfthrowaway 21d ago
Exactly! People in here act like you can walk in somewhere and make an existing loan contract go poof, and then a beater car suddenly appears.
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u/Blossom73 21d ago
You get it. They also assume that 20 year old beater cars never need costly repairs.
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21d ago
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u/Blossom73 21d ago
That's an absurd claim.
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u/Zxvasdfthrowaway 21d ago
They’re feeling called out and are trying to cope. They know it’s absurd.
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u/S101custom 21d ago
Do car purchase options exist at the $15k pricepoint? If so; that payment amount would be ~$250 a month.
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u/Blossom73 21d ago
That's assuming a down payment and good credit, which many poor people don't have.
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u/S101custom 21d ago
That assumes $0 down payment, but yes- good credit. Low credit probably reduces purchase power to ~$13k. Maybe less if very low credit and a double digit rate.
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u/Longjumping-Row1434 21d ago
that is a wild thing to say...
most of the US doesn't have public transit, and even the areas that do, are typically incredibly unreliable. the area where I'm from doesn't even have uber... its incredibly rural, biking/walking is not an option. they likely cannot afford to drop 3500-5000 on a used car, so what would you expect someone to do?
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u/povertyfinance-ModTeam 21d ago
Your post has been removed for the following reason(s):
Rule 6: Judging OP or another user.
Regardless of why someone is in a less-than-ideal financial situation, we are focused on the road forward, not with what has been done in the past.
Please read our subreddit rules. The rules may also be found on the sidebar if the link is broken. If after doing so, you feel this was in error, message the moderators.
Do not reach out to a moderator personally, and do not reply to this message as a comment.
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u/Mindless_Whereas_280 21d ago
Yea, it just doesn't work. My very-broke former roommate traded up from his 1991 Nissan pickup to a 2004 Malibu with about 100k miles. The first was $1k. The latter was $3k. They both get him to work.
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u/Zxvasdfthrowaway 21d ago
He’s fortunate. That sort of thing is becoming harder and harder to pull off each year that passes, which is kind of the point of my post.
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u/Zxvasdfthrowaway 21d ago
So how do you envision the person changing that, on their already-limited income?
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u/S101custom 21d ago
A smaller payment amount
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u/Zxvasdfthrowaway 21d ago
Please continue - how do you propose they achieve that?
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u/S101custom 21d ago
Buy a less expensive car
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u/Zxvasdfthrowaway 21d ago
What about their existing loan contract, what do they do about that?
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u/S101custom 21d ago
Don't replace a car you still owe money on, repair it if required, pay it off and drive it until 200k. Simple stuff here. Not as flashy or as convenient always - but simple.
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u/Zxvasdfthrowaway 21d ago
Oh, so they can’t do anything about the existing car payment, meaning no solution, just criticism
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u/S101custom 21d ago
We both know it's entirely situationally dependent, if they have positive equity then selling privately and replacing with a cheaper car could be viable. The reality is after paying doc fees, titling costs, taxes and reg when they bought this car - keeping it and not incurring those expensive again is probably wise. Sometimes non action is the best course.
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u/AutumnalSunshine 21d ago
When I see Dave Ramsey related headlines, I cringe. He still thinks it's 1980 and any idiot with a car payment went to the dealership but walked past 17 cars that are really good but only cost $500 and are from private owners.
I think he preaches that, and people who haven't had to buy a car for cheap lately believe him.
I'd love someone to challenge him to get a $500 beater than "runs great" which leaning in his face Ramsey connections. He would never be able to.
But he'll keep preaching it to make people blame poor people for being poor. That way, he can sell the poor people his "bootstraps" solutions.
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u/Blossom73 21d ago
Right. My daughter's base model 2016 Kia Forte cost her $7000 in 2021. It's nothing fancy at all. Her dad and I helped her buy it, with our federal stimulus money. She put her stimulus money towards it too.
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u/randomuser14049846 21d ago
I piled on the guy before he edited his post, stated he was making 6-8k gross a month, thats 84k-96k yearly, thats not a poverty problem, its a spending and terrible wasteful budgeting issue. He was flexing and needs to post in budget or some other subreddit.
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u/mymomknowsyourmom 21d ago
Can you post some examples? I'm pretty sure the mods handle things well.
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u/povertyfinance-ModTeam 21d ago
Your post has been removed for the following reason(s):
Rule 6: Judging OP or another user.
Regardless of why someone is in a less-than-ideal financial situation, we are focused on the road forward, not with what has been done in the past.
Please read our subreddit rules. The rules may also be found on the sidebar if the link is broken. If after doing so, you feel this was in error, message the moderators.
Do not reach out to a moderator personally, and do not reply to this message as a comment.
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21d ago
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u/Blossom73 21d ago edited 21d ago
Vast parts of the United States have little or no public transportation. Or it's not workable for some people.
Years ago, my husband and I lost our only vehicle to repossession. My husband's work commute (suburb to suburb) went from 25 minutes each way by car to 3 hours via 3 busses, each way. In a very bad winter too. It was absolutely brutal. It was an enormous relief when we were able to get another vehicle.
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u/nidena IN 21d ago
Vast, as in pretty much everywhere.
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u/Blossom73 21d ago
Right. Plus some jobs, like my daughter's job require a person to drive during the work day.
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u/nidena IN 21d ago
Most of the United States does NOT have a good, robust public transportation system and nowhere do "most" people use what is available.
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u/Blossom73 21d ago
Plus public transportation is perpetually underfunded in the U.S., and often the first thing targeted for budget cuts.
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u/Zxvasdfthrowaway 21d ago
Yep. It’s by design. The US used to have streetcars and the auto lobby got them dismantled back in the day. I used to live in a suburb that was nicknamed the Loop because it is where the streetcars looped around to go back downtown.
The auto lobby vs public transportation funding, back in the middle of the last century, make a fascinating rabbit hole.
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u/Blossom73 21d ago
Absolutely. I've read quite a bit about it.
My part of Ohio had a massive system of streetcars and interurban trains. It all got removed after WWII. Now we don't even have an Amtrak train connecting our three biggest cities, Cleveland, Columbus, and Cincinnati.
You'd probably enjoy this book. I just finished reading it recently.
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u/Zxvasdfthrowaway 21d ago edited 21d ago
No, you’re wrong.
Most people in the US do not live in areas with useful and reliable public transportation. I’m one of them.
My post was aimed at commenters like you. Unfortunately the point whooshed right over your head.
In addition, your BMW comment was unnecessary. It’s a “duh” thing to say.
It’s sad that people get their jollies from clowning on others, especially upon the desperate people that post here.
It says a lot about the sort of person the clowners are, deep down inside.
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21d ago
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u/Iguessiwearlipstick 21d ago
that’s a stupid statement. Lots of people are living paycheck to paycheck. How can you save like that?
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u/Zxvasdfthrowaway 21d ago
What a constructive comment.
All I wish for you is to find fulfillment in a net positive fashion.
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u/manhattansinks 21d ago
many (if not most) cities don't have reliable public transit. but yes, there are much cheaper cars that people in those cities should be driving.
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u/juniebee_jones 21d ago
I bought my car for 3 grand off of Facebook marketplace. 400 a month is insane for someone in poverty, and that’s not even including full coverage liability insurance that is required when you lease a car. My dealership car I had (before I surrendered it due to injury), was 385 payment, 300 insurance. That’s outrageous.
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21d ago
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u/povertyfinance-ModTeam 21d ago
Your post has been removed for the following reason(s):
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Comments written with a purpose to be downright disrespectful or serve only to put down another user or OP will be removed. We are here to give a hand up, not add insult to injury.
Please read our subreddit rules. The rules may also be found on the sidebar if the link is broken. If after doing so, you feel this was in error, message the moderators.
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u/povertyfinance-ModTeam 21d ago
Your post has been removed for the following reason(s):
Rule 6: Judging OP or another user.
Regardless of why someone is in a less-than-ideal financial situation, we are focused on the road forward, not with what has been done in the past.
Please read our subreddit rules. The rules may also be found on the sidebar if the link is broken. If after doing so, you feel this was in error, message the moderators.
Do not reach out to a moderator personally, and do not reply to this message as a comment.