Preapprove loan in the range you want from your bank.
Agree in writing on car price.
Get loan from bank.
Pay for car
Pay back bank.I’m looking to buy a new car, went to the bank for a loan, they said they’d only do a car loan if I bought a car that was less than 3 years old. Are you kidding me? My current car is from 2004, I’m hoping for an ~$8k 2012 or something…
My last car purchase I was thinking similarly, I ended up with a '14 with 80000km on it. Bank said “we can’t give you a loan for that, but we can up your line of credit and you can use that” …
You say that as if banks are on your side.
Banks aren’t credit unions.
True. The banks are at least marginally more on your side than car dealerships though.
I’ve only ever banked at credit unions.
True. The banks are at least marginally more on your side than car dealerships though.
I’ve only ever banked at credit unions.
True. The banks are at least marginally more on your side than car dealerships though. And I’ve only ever banked at credit unions.
Additionally, if you can get your down payment/trade-in to get your car off the lot with equity then you’ll get a lower interest rate. When my ex and I bought her new car a few years ago we incidentally did that (total value between the down payment and trade in was something like 10k on a 23k purchase) and we were pleasantly surprised to see a full percentage point lower on the loan.
I recommend that anyone buying a car that they’ll have to finance bring in a laptop with an amortization schedule up and ready to go to the dealership. Dealers don’t want to talk about the total cost of the car. They only want to talk in monthly payments. They’ll sometimes offer cashback in order to get you to agree to a higher interest rate. If you don’t have an amortization schedule handy, you’re not going to be able to do that math and figure out if you’re getting a good deal or getting scammed.
If you don’t know what an amortization schedule is, then Google it and play around with one before you go in to buy a car. You only need to plug in a few variables - purchase price, number of months for the loan, and interest rate. That will allow you to see your monthly payment and what you’re paying in interest.
If you can’t do that simple thing, then don’t finance a car.
you don’t even need a laptop for that nowadays; you can pull up such a thing directly on your phone.
True, but in my experience a laptop forced you to take your time a bit and see the bigger picture. Also it lets the dealer know that you are not fucking around.
I knew this big clunky ass gaming laptop would come in handy someday. The RGB lights really communicate that I’m no man to be trifled with
Hell yeah. You see a man with RGB and you know he means business.
People don’t always have the understanding that those exist nor understand how and when to negotiate rates. If you don’t speak English very well, that’s an even bigger problem. Honestly, the best scenario would be a requirement to show the amortization schedule in an easy to understand visual format before someone agrees to sign a loan offer.
In response to an article about how poor people are trapped by loans… you recommend that? Really?
Absolutely. Did you read the article? The people interviewed explicitly say that they don’t know anything about interest rates and how financing works. One guy had a 75% interest rate because he apparently had no idea what that meant he would be paying , which is several times the price of the car.
If you’re going to finance a car, you need to arm yourself with the tools to figure out what that is going to cost you. Go in prepared. Don’t count on the dealer telling you the numbers, because they are not on your side. They are trying to hide that information from you to get you to agree to something for their benefit.
Poor uneducated people are being oppressed by corporate shills… Best you got it "learn the rules of the game: basically?
Educating people is a lot easier than fixing the system. No reason we can’t try to do both.
Saying “educating people is a lot easier than fixing the system” is not as easy as actually educating people. Telling people on lemmy to build an amortization schedule is like pissing in a lake of piss. We’re a bunch of frugal nerds.
What exactly would an effective system to educate people on loans look like in the US? Either all 50 states would have to agree to mandate financial literacy in every school or the federal Department of Education would. Then each school has to adopt the policy and make sure teachers are equipped to teach while having a benchmark/test to show it’s effective. That brings in a private company to develop the test and education material. Then you have schools who can barely hang on to teachers that are qualified enough to teach. Some districts are at the point where they just need warm bodies to be babysitters.
So let’s say we develop a robust financial literacy program in all US schools. Say Biden’s Education Secretary makes it their agenda and 50 states agree to take this on and mandate it for their public schools. That still leaves massive gaps in our system. Anyone older than the initial cohort will be at a disadvantage. Anyone from a non-English speaking background or is mentally handicapped will be at a disadvantage. You’d need edge cases to educate them.
So tell me is it really, truly easier to educate people and fix the problem that way? Or would it be easier to pass policy that prevents or mitigates predatory lending behavior in the first place? In an ideal world we would have both!
I know Lemmy users hate being told they are wrong so go ahead and downvote me. It’s not like I’ve spent a third of my life working with the government and studying policy or anything.
I suppose I simple wasn’t pedantic enough for you- posting a comment educating people and trying to fix the system are not mutually exclusive.
You’re not wrong, you’re just arguing against a point you made up and doing so like a prick.
English isn’t my first language. I read your comment as one that advocates for education vs fixing the problem. I’m so sorry. No need to be a jerk :(
Edit: actually I think I’m probably done with Lemmy. People are way too quick to insult and it’s not worth putting in effort on productive comments here. Have rarely felt so unwelcome on a platform.
Sorry you’re getting downvoted, OP. Sometimes it not worth the effort to reply here. Too many people think they are better than others.
You’re oddly hostile for a post where I offered advice. Obviously we’d be better off if there were strong protections in place. No one is arguing otherwise. I offered practical advice that you and your loved ones should follow to protect yourselves and you act like I’m saying the system is perfect and nothing should change.
If you posted an article about people were dying in car crashes and I said to make sure you wear a seatbelt, you’re acting as if I said we shouldn’t continue to try to make travel safer. Wear a seatbelt! And make sure you know how finance works before taking out a loan.
I think the advice is really “at least google it before signing a contract”.
Dude my 60 year old aunt from Mexico can barely speak English and didn’t finish high school because she had to work. She can barely figure out how to use a phone. Do you think she’s gonna know how Google works? Guess what she needs to own in order to get to work every day? A car!
It’s not as simple as putting everything on the responsibility of the consumer when at times those things can be a necessity. There have to be protections in place to prevent predatory behavior.
Well I don’t disagree but if those protections aren’t in place then it’s up to the consumer to protect themself.
That’s something the gov’t is supposed to mandate because businesses don’t give a shit. They’re only there to make money for the corporate bosses and investors.
Caveat emptor is not a universal mantra everyone knows or understands.
And what would be better recommendations for the poor individuals trapped by loans?
Regulatory reform? Not “just go buy a laptop and study amortization before you buy”.
Yeah, that sounds reasonable in the long run (years), while the laptop plan is more immediately useful.
Probably the most valuable thing I learned in school was how to build amortization schedules. I’ve used it on vehicles, student debt, and mortgage. It’s really helped me win the “stop paying unnecessary interest to others” game.
Same here. I’ve forgotten probably 90% of what I learned in school, but amortization schedules have stuck with me because they’re such a necessary part of life.
The rise of
Reading the article, it sounds like the exact scam that was parodied in GTA V almost 15 years ago. I imagine this is not a new problem. Maybe the rising interest rates made it even worse?
This article pisses me off. Back in late 2020 I went to a dealership to buy a new car, very high credit score, 1/3 cash down, and qualified for a 0% interest deal that was going on at the time.
The dealership came at me with the most bullshit offers, tried to get me to take dealership financing at 4%, then 3.5, then 3% at a longer loan duration and acted like they were doing me a favor the whole time. Finance guy was being such a dickhead about it even the sales guy started getting pissed at him.
Took nearly 6 freaking hours to close the deal. Finally got my 0% offer and expected financing/cost because it was 20 minutes to closing time and I was like “fuck it, I’ll go check out your competitors tomorrow,” keys in hand, walking out the door. Sales guy literally chased after me and stopped me at the car to say the finance dude finally caved.
Fucking scumbag stuff. Dealership changed their name a year later and I don’t wonder why.
And then you kept walking because fuck those guys?
Nah, I bought it because there wasn’t going to be a better deal, I did my research for weeks and months prior and that 0% popped up in the middle of reviewing options.
I think they tried the push because it was the last day I could get it before the deal expired. The zero % financing was via the manufacturer, not dealership.
And they make less money on that than the dealer financing options. No surprise they were being pushy about it.
I mean, I was already preapproved for a 2.5% loan and qualified for the 0% offer, made that clear. I was very up front there would be no dealer loan.
I made it dirt easy, like “I’m qualified for this zero interest deal, I’m willing to pay up to $10k in cash up front. Make it happen for $300 a month or less with those terms and you have a sale.”
They still fucked around so hard. I really was ready to walk out empty handed, they made the deal literally with me unlocking my old car to leave.
I admire your patience. I would have walked out an hour in.
0% interest rate is usually given in lieu of a cash back offer. So, you could get like $2500 cash back and a 4% interest rate or a 0% interest rate with no cash back.
My strategy would be to take the cash back, take the dealer loan to reduce friction, and then refinance immediately when you get home at a lower rate.
0% was a brand-wide deal (manufacturer, not dealership) to get rid of previous year stock, there was no cash back option on it. Plus, there’s no lower rate than zero, and best I could get with a different loan was 2.5%. Though I did reference said pre-qualification during negotiation when they made the crap offers. Made it clear I wasn’t walking out with a dealer loan.
All Carsalesmen Are Bastards.
Defund the dealerships.
No fan of Musk, but this kind of shit and other scams are driving me towards companies like Tesla that are using a direct sale model.
Subaru dealers lied to me about the engine I was getting, said the head gasket issue was fixed. Turns out it was fixed, just not for the model of engine that was in the specific car they were selling me.
Then a different dealer did the head gasket job, thousands of dollars, and now they’re telling me it needs to be done again four years later for another 5k.
A local Chevy dealer was screwing over their employees with wage theft by agreeing to give raises and then quietly taking them away later.
Fuck them all to hell, small business my ass. If you have to spend millions lobbying your state government to make direct sales illegal, I’m going to do everything I can to avoid giving you my money.
Are they just talking about the predatory “buy here, pay here”-type used-car dealers that have been around for a while, or are new-car dealers getting into the scam now, too?
The whole article was just anecdotes and heresay, so who knows. I know there is a ton of predatory b/s involved with buying cars but these examples seem like outliers. I think the Tik Tok lady was lying about her car payment(s) though just to go viral and it totally worked.
No it sounds like she got a shitty interest rate and it never occurred to her that said interest rate would mean paying just interest for years before touching the principal. Something around a 15% interest rate with no money down would probably give her that result. And yeah that’s very much an offer a credit lender will make when they know they can repo the car for extra profit when the borrower defaults. The car has to be insured. The lender literally cannot lose.
Here’s a Consumer Reports article cited by Vox. It’s got a few examples to help substantiate the claims it’s making.
I automatically think less of anyone who doesn’t buy Toyota at this point. Used or new, no other maker comes close to the value. I don’t even like their cars but I’d never claim that my personal flavor is better than Toyota’s offerings outside of my own niche interests (and I’ve still got a Corolla I drive most days in the summer). $1,400 a month for a fucking Tahoe is ridiculous and I have a hard time having any sympathy for someone stupid enough to make that their “dream car” or worth taking out a $84,000 loan for.
Toyota has raised their prices inline with inflation since 2021 (~24%). Nissan and Suburu have been under inflation in that period (~20%). Stellantis (Dodge etc.) have raised their prices ~50% in that period and Kia/Hyundai have gone up ~40%. People should look at which companies have been price gouging and avoid them.
Sticker price is only one part of the equation. Toyota cars are more reliable (read: consumer friendly) than any of their competion and have been for several decades now. If you want to save 4%, go for the car that’s almost garaunteed to blow a head gasket within its first 120k.
You mean Toyota, the same company that has spent years lobbying against emissions standards in Australia and dragging their feet on EVs?
If you’re a financially strapped consumer looking for a car, you’ll find no better deal than one of Toyota’s models, excepting some special scenarios. Their slow progress towards EV adoption doesn’t negate that.
I don’t see why it’s a big deal that they’re dragging their feet on EVs in classic Toyota style. This is what they do and why they’re so reliable. Other companies jump headfirst into projects often with disastrous results.
Not to mention Toyota was first with the hybrid and hybridizing a good chunk of their fleet so its not as if they’re selling a bunch of gas guzzlers like Dodge/Chrysler.
I don’t agree with the other guy that people are stupid for buying any other brand, but Toyota is consistently the best bang for your buck in most categories.
Blind loyalty to a brand is extremely dangerous.
It isn’t blind. As soon as Toyota breaks their decades-long streak of making the best valued cars, I’ll never recommend them again. But for now, recommending people concerned with money/value buy only Toyota is based on current facts.
I did the math for the interest rate since they didn’t bother to in the article. The article says she had paid $1400/mo for 3 years and had only paid 10,000 toward principal. Assuming that’s 36 months of payments, the interest rate would be around 15.5%. The payment term would have been 10 years and total payments would end up being $168k.
Predatory lenders and financial illiteracy; a perfect match made in hell.
While whoever did that to her really ought to be in jail, she does need to take some responsibility
- most people dont need such a big vehicle - clearly it will be expensive
- most people shouldn’t get the top end trim of whatever vehicle
Unless she willingly went into this because she used to have higher income, I do t see how she could claim complete ignorance
That kind of interest rate indicates she was a bad credit risk, either because she made the same mistake before, or she couldn’t afford it. If she’d already made the same mistake, will she ever learn? If she just plain couldn’t afford it, yeah, a lot of that is on the scummy salesman
I automatically think less of anyone who doesn’t buy Toyota at this point.
It’s almost like some people have different needs for their cars than you do? No, that can’t be it. They must be dumb for not choosing what you like.
I guess I’ll go buy the small Toyota EV… nope, can’t. I guess I’ll go buy the small hybrid Toyota truck… nope, I can’t. Or maybe I absolutely hate the entertainment system software that feels like it was designed 10 years ago.
It’s almost like some people have different needs for their cars than you do?
Toyota has one of the most diverse product ranges out of any automaker. Notice I said the brand and not a model? They make cars to fit 99% of people’s needs.
I’ll go buy the small Toyota EV…
You can run a Prius in EV mode.
I guess I’ll go buy the small hybrid Toyota truck
No you won’t lol. If you’re seriously concerned with that, get a manual transmission Tacoma (the only mid-sized truck with one) that gets better MPG than a hybrid Maverick. Then sell your Tacoma for 90% of what you paid for it and buy a hybrid truck when they’re the first to make one worth buying in the first place. Otherwise, have fun being a beta tester for Ford/GM.
Or maybe I absolutely hate the entertainment system software that feels like it was designed 10 years ago.
Skill issue, iPad baby, etc.
It’s the big 4 Japanese brands for me: Toyota, Honda, Mazda, and Subaru.
Mazda’s been on a roll recently, I’ll admit, but Subaru has had issues forever and Honda cars are overvalued to hell.
I agree. Nissan was the solid #2 Japanese company until getting in bed with Renault.
I’ll defend the KA24 as being equal to or better than the 22R every day of the week, but that’s a good Nissan motor; the hardbodies never came close to the overall construction quality of Toyota P’ups
I do own a Toyota, which I am happy with, and I still think that’s a shitty attitude.
So congratulations, you got me to think less of you.
I’ve been very happy with Mazda over the years. I had intended to get a Toyota at one point, but the local dealership by me was scummy and kept trying to force me into buying specific models I wasn’t interested in which pissed me off. I went to the nearby Mazda dealership as my second choice and I’ve never regretted that decision.
I was very happy with my Mazda 3. It just didn’t work once I moved out to the country. The thing is like 3" off of the road.
The investigation begins with an anecdote about a man who received disability payments from the Social Security Administration; he received a loan for a Jaguar with an astonishing annual percentage rate of 75 percent.
Fucking WHAT?! It should be so illegal to try to take advantage of someone who doesn’t understand finances. I get that you really should understand the basics of finances and interest before you spend that kind of money. But also cars are such a necessity here that not everyone who buys one is going to be well-educated, speak good English, fully literate, or without a learning disability.
Before anyone tries to pull the “it’s the buyer’s fault” line before on me before reading the article, here’s some great excerpts showing how scummy these lenders are:
… men recently released from prison who found that their credit histories prevented them from getting reasonable loans at affordable interest rates…“A lot of people we were interviewing were driving pretty fancy cars. We were stroking our chins, going: ‘How did you afford that?’ It turned out that some of them were walking into dealerships and being told they couldn’t get financing for the Hondas they wanted, but could for a top-of-the-line Mercedes”… “Why would a lender and dealer do that? Because they know they’re going to be able to repossess the car quickly.”
Look, I am in sales. I know exactly how people can run you around in circles bullshitting you into closing before you realize how bad of a deal you’re getting. It’s what I look out for when interviewing, because I’ll walk if that’s the culture your product or company has around it.
My jaw dropped when I got to that part too! That’s a 4x value payment on a 5/yr loan! Beyond disgusting tactics needed to get someone to in go for that. It’s absolutely predatory.
Aaand it’s gone. The whole comment. It’s gone.
He quoted the part of the article that stated a customer unknowingly purchased a Jaguar with 75% APR.
Thanks!
Yeah but ‘just be financially literate bro. It’s your fault if you get taken advantage of when buying something you’re almost required to own’. Goodness that felt gross to write.
Love this comment because you actually read the article, unlike some other commenters…
