To Kia and Hyundai, I’m Sorry I Complained About Your Financing Deals

[zhelder]

Just took a look at the Toyota website, and Jumpin’ Jehoshaphat, it’s a whopping 5.04% interest to finance a 2020 Highlander for 60 months, or 5.69% for 72 months. You can choose $2,000 cash back instead, but, even with that, you’re still likely to pay more than 3,000 over a comparable Telly or Palisade.

OK, Honda’s offering 0.9% on the Pilot, but... it’s a Pilot. A five-year-old design that was dated five years ago. And I’m expecting the remodel to be an even bigger dud than the Highlander.

I still want 0% for 84, but I’ll try to be less harsh in my complaints. 5.69?!? Nearly dropped the iPad in the toilet when I saw that...

 

[MarcinTexas]

Just took a look at the Toyota website, and Jumpin’ Jehoshaphat, it’s a whopping 5.04% interest to finance a 2020 Highlander for 60 months, or 5.69% for 72 months. You can choose $2,000 cash back instead, but, even with that, you’re still likely to pay more than 3,000 over a comparable Telly or Palisade.

OK, Honda’s offering 0.9% on the Pilot, but... it’s a Pilot. A five-year-old design that was dated five years ago. And I’m expecting the remodel to be an even bigger dud than the Highlander.

I still want 0% for 84, but I’ll try to be less harsh in my complaints. 5.69?!? Nearly dropped the iPad in the toilet when I saw that...

84 months on a depreciating asset?! If you can't afford it on a 60 month payment at most...you can't afford it. 84 months is insanity.

 

[zhelder]

84 months on a depreciating asset?! If you can't afford it on a 60 month payment at most...you can't afford it. 84 months is insanity.

I agree if there’s interest, but at 0%, why not?

Seriously, I’m not going over 60 if there’s any interest.

 

[MarcinTexas]

I agree if there’s interest, but at 0%, why not?

Seriously, I’m not going over 60 if there’s any interest.

Any car is a depreciating asset. Carrying debt on it -even at 0% for longer than 60 months puts you in a position to have a loan balance that could potentially be greater than the vehicles value - especially if you trade it in before it is paid off. I hate it that I won't be able to put more than 50% down on our Telluride SXP - but will be paying it off fast. I hate debt.

Our country is addicted to debt and far too many people have debt on houses and cars that is way too high. I feel the same way about a 30 year mortgage. We have a generation of people that will never be ready to retire because they continually buy things they can't really afford - despite the fact that they are "approved" for the loans. Avoid 30 year mortgages and never buy a car that is more than 25% of your gross income - and you will be able to retire comfortably. I am proud of the fact that my total debt (including my mortgage) is less than one year's salary. People may laugh at how I live today - but they won't be laughing when they come up to retirement age and aren't ready. My guess is that the average person is way over extended on houses and cars and probably can't even afford to pay their credit card off every month. Actually I don't have to guess - all statistics point to this as fact.

While not a strict follower of him, I do agree with Dave Ramsey's philosophy - live like no one else today so one day you can live like no one else.

The 84 month financing thing just sets me off. That and everyone that says they stretch their debt out to invest the difference. The facts on consumer debt and delinquencies in this country do not support that as actually happen. More a pipe dream for most than anything else.

Ok...done ranting.

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[Kirbo]

I have a legitimate question; do people honestly get 84 month loans? I didn't even know that was possible.

My concern with a loan that long would be like above, you run the risk of owing more on it than it's worth. Be a bummer to wreck it and owe more than you get from insurance or decide you hate it and owe more than it's worth then.

I really had no idea you could get a loan that long for a car.

 

[Nas4atu10]

I have a legitimate question; do people honestly get 84 month loans? I didn't even know that was possible.

My concern with a loan that long would be like above, you run the risk of owing more on it than it's worth. Be a bummer to wreck it and owe more than you get from insurance or decide you hate it and owe more than it's worth then.

I really had no idea you could get a loan that long for a car.

It's totally possible, not ideal for most, but it is a viable option for others. Not every shoe fits the same foot. By the way, I've never financed a car for that long, but on ALL of my cars I've financed, I always get GAP. Has saved me twice after my car was deemed total in a collision.

 

[Cmsharp]

The amount of debt some people are comfortable with is shocking. Our total debt is less than a years salary. I have coworkers with 4 times that amount on about the same household income. I would be a basket case if that was me!

 

[MarcinTexas]

The amount of debt some people are comfortable with is shocking. Our total debt is less than a years salary. I have coworkers with 4 times that amount on about the same household income. I would be a basket case if that was me!

Exactly! What you can get approved for and what you can truly afford is typically 180 degrees apart. If people were content to live on less than they earn, save for the future and purpose to pay off their house - they would be much better prepared for retirement.

Went to get pre-approved to finance 50% of the purchase of my Telluride SXP and the bank told me I qualified for up to a $100K car loan for up to 84 months. That is insanity - maybe I should just go for it and get the all new Escalade ESV Platinum instead!!! After all, the bank says I qualify for it. I would have a heart attack if I had a car loan that large - and I make good money. My main goal is being debt free by the time I am 55. No Mortgage, kids college paid for and spend the ten years after that banking for retirement. If I borrowed as much as the bank says I qualify for on cars and my house I would have a stroke.

Survey: 69% of Americans Have Less Than $1,000 in Savings

Find out why they say they can't save more.

www.gobankingrates.com

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[MarcinTexas]

I have a legitimate question; do people honestly get 84 month loans? I didn't even know that was possible.

My concern with a loan that long would be like above, you run the risk of owing more on it than it's worth. Be a bummer to wreck it and owe more than you get from insurance or decide you hate it and owe more than it's worth then.

I really had no idea you could get a loan that long for a car.

It is becoming increasingly more common as people demand more and more luxury and features and unwilling to drive what they can afford. Even with incomes rising and payroll taxes falling - people aren't using that windfall to get ahead and plan for the future - more and more are taking that cash and leveraging over longer terms to get a nicer vehicle.

How Long Should a Car Loan Be? | Edmunds

The longer the loan, the more interest you will have to pay on it, both in terms of the rate itself and the finance charges over time. Edmunds recommends a 60-month auto loan if you can manage it.

www.edmunds.com

Best quote in this article:

"Let's say you want to buy a new car, but the monthly payments that are being quoted for the usual five-year loan are too high for you. That may be a sign that you're shopping outside of your price range."