patrick.net

Tenpoundbass says

So the guy is telling his Customers, why Leases have gone way up and not much difference than a Finance payment Less than a $100 difference in most cases not $300 and $400 difference.

So why didn't she buy it instead of lease it and build up equity instead of just throwing the lease payments away, just like rent? She'll have nothing to show for all the money she spent when the lease ends. Bad choice.

Tenpoundbass says

Yesterday I put in a full day's work buying two cars.

I just went through something similar two weeks ago.

Dealing with car salesman is like getting root canal, having to play their little Jedi Mind Tricks. I bought a new play toy, a sports car, for wifey, to play with on nice days. Had to hit the sales guy over the head with a 2x4 to help him concentrate on what was going on. He wasn't happy when we left. Maybe I should send him to where I took all my sales training, so he can learn how to control the deal and not lose his shorts.



That actually was the cheaper deal of the two.

Next up, I bought a new motorhome, so I can have something to play with too. The RV dealers are so much easier to manipulate than the car dealers. I ended up getting a lot better deal then I thought I could. The owner of that dealership was definitely not happy when we left. She was an easy push-over. I love winning!!

Man, talk about blowing through a quick $110K+ in a short period of time.

Debt-saddled buyers lean on Mom, Dad

In a township outside Akron, Ohio, where Gregory DeLozier and his wife raised five children, there are few sidewalks and sparse public transportation. Getting their children behind the wheel of a car wasn't optional.

At the Bureau of Motor Vehicles, DeLozier once joked that he should apply for a dealer's license because of how many registrations he was renewing for his teenagers. "I got two insurance bills every month," he recalled. "Three cars on one, four cars on the other."

Even with four of the five children out of the house, DeLozier, 59, is still doing business as the "dealership of dad." The software engineer and adjunct professorat Kent State University still shoulders four of his children's vehicle expenses. In the last six months, he estimates, he has paid more than $15,000 in vehicle expenses for the children and their spouses.

"We're like the circus net below everything that falls. That's how parenthood is in America right now," DeLozier said. "Your kids are on a high wire, they fall down, you pick them up and put them back up again. We paid for lots of repairs."

With prices rising for new and used vehicles, and student debt posing a mounting burden, more young adults are asking their parents for assistance with auto purchases, insurance costs and repairs. As their children's personal debt reaches unprecedented highs — TransUnion says millennials have a record $683 billion in student loans to worry about when figuring out how to afford a car payment — some parents are putting their own financial security on the line to keep their family on the road.

‘Times are different'

There's little data available on how many parents shoulder vehicle expenses for their adult children. To determine who's driving what, automakers and other agencies garner demographic data that measures the number of households with children in them, but not the ages of those children. Parents may continue to pay for a vehicle after its driver leaves home or purchase vehicles in their names for a son or daughter to drive.

"We live in a country where you have to have a car. Uber is not an affordable alternative. You can't get an Uber every day to your job," said Jonathan Banks, general manager of vehicle valuations at J.D. Power. "The majority of our population is still in a rural setting."

Bill Lucy, 66, of Fort Wayne, Ind., gave a 2009 Toyota RAV4 to his youngest daughter in 2016 and still pays for its insurance. She didn't attend college, though, so he didn't need to help her with any student loan payments.

Mike Robertazzi, 63, of Toms River, N.J., purchased an Infiniti with his wife for their 25-year-old son. The son, who lives with them, previously owned a Chevrolet Corvette before being laid off.

"He didn't have any real income, and since he's going to school, we thought we'd do that for him," Robertazzi said. "Times are different. When I was young, I bought my first house when I was single."

Captive finance companies, which experts say are the type of lenders most likely to do deals that include a co-signing or co-borrowing parent because they have access to automaker incentives, won't disclose how often these deals cross their desks.

Student debt

Dina Wilson, general manager and finance director of Timbrook Kia in Cumberland, Md., said the prevalence of parent-and-child customers at her store has increased.

"I've seen a lot more of those than what there ever used to be," Wilson said. "As finance managers, we all need to be more aware of who our customer is in front of us."

Vehicle purchases and student loans — whether for themselves or their children — are two of the biggest contributors to increasing debt for older Americans. People 60 and up had total debt of $615 billion in 2017, according to TransUnion, which is less than millennials owe on student loans alone.

Americans 60 and older held 21 percent of total automotive balances in 2017, vs. 12 percent in 2010, TransUnion said. Auto loans now account for $246 billion, or 40 percent, of their total debt.

For all Americans, fast-rising student loan debt is sapping income they could have used for other purposes, including a vehicle. More than a quarter of millennials with student loan debt have delayed buying a car because of it, according to a survey by Bankrate.com released in February, with the Midwest as the region most likely to cite loans holding back a vehicle purchase.

Mark Hamrick, Bankrate's senior economic analyst, told Automotive News that many Americans are struggling with their finances even in a strong economy.

"It's not unusual for many small towns in this country to have essentially not participated in the economic expansion in the past 10 years," Hamrick said. "It doesn't surprise me that the Midwest would be having some warning lights going off there."

Student loan debt, which totaled $1.46 trillion in the fourth quarter for all ages, also is preventing younger Americans from purchasing homes, getting married and saving for retirement and emergencies, the Bankrate study found.

Expensive mistakes

Lacking a financial safety net for an unexpected expense also can compel a young car owner to turn to parents for help.

Though he considers his children financially responsible, DeLozier said they have made some costly mistakes with their vehicles.

A few years after he bought his daughter-in-law a used Toyota Camry, she called him from the road.

"We call that DadStar 'cause they would call me and say, 'Dad, I'm on the freeway, and something's making a funny noise,' " DeLozier said. "She's a young professional, a biostatistician, but she's no car mechanic."

His daughter-in-law had never gotten an oil change, he said, and the Camry's engine had thrown a rod.

He knew she and her husband, his 28-year-old son, didn't have the money to replace it. A few years before, he had co-signed on a Kia Soul with his son after he had hit a deer, DeLozier said. Before the accident, his son was overpaying for his vehicle, a used Nissan Murano.

"He paid like 50 percent more than what the Murano was worth, and at a ridiculously high interest rate. It was like $28,000 at 18 or 19 percent interest," he said. "The only way he could get reasonable rates was to have me co-sign. This is about access to credit for him."

DeLozier had an idea for his daughter-in-law. He passed down his vehicle, a Honda Fit, to his 19-year-old daughter and replaced it through CarMax. Her car, another Camry, went to his daughter-in-law.

"She's got a car now because I was able to afford a new car," he said. "That trickle-down effect gave two other people better rides."

But not every parent can afford to help their children in the same way.

The Consumer Financial Protection Bureau said in a December study that older Americans who provide financial support to children have lower financial well-being scores than those who don't.

"There comes a point we have to say, 'We can't do this anymore.' The parents, in trying to do the best for their kids, do the worst for themselves," said Ray Walker, who works in sales and marketing and lives near Orlando. He pays for two daughters' vehicle expenses while chipping away at a $50,000 student loan for one daughter, which represents about half the debt incurred while she earned a music degree at Belmont University in Nashville.

"We don't have retirement money right now because we've paid for student loans," Walker said. "People are sacrificing their own future."

In New Jersey, Robertazzi and his wife are retired but feel trapped by their son's financial situation. He couldn't remember the last time they took a vacation.

"Here, what I thought was going to be a phenomenal retirement and a phenomenal future wound up just being the opposite," he said. "Every little bit helps now, and every little bit that's going towards everything else — it hurts."

Used over new

Affordability and growing debt are increasingly driving young people and their parents to the used-vehicle market.

"Whether fresh out of college or becoming a first-time homebuyer, many young adults are just starting to plan their future and often look to their parents for financial assistance on big purchases," a spokeswoman for CarMax wrote in an email to Automotive News. "While young adults might be tempted to look at new cars, buying new isn't always the best choice."

Average monthly payments for a new vehicle have risen to $533 in the last five years, according to transaction data from Cox Automotive company Dealertrack, up roughly $40 a month for a loan and $70 a month for a lease.

Part of the reason is that vehicle transaction prices are rising as larger models loaded with more technology fill the marketplace. But smaller, more affordable alternatives also are vanishing in the new-vehicle market.

Looking for dependability

The number of new vehicles sold for less than $20,000 dropped nearly 20 percent last year, according to J.D. Power data, while sales of vehicles over $40,000 rose 7.4 percent. Meanwhile, the average income of car buyers in Generation Z — defined as those born from 1995 to 2004 — hovered around $20,000 a year in 2017, according to J.D. Power. The company cited census data for 2017 that shows the median income ranged from $17,700 for 18-year-olds to $24,000 for 22-year-olds.

Though not all of them are old enough to drive, Generation Z makes up 14 percent of the U.S. population and bought used vehicles 63 percent of the time, J.D. Power says. Millennials — born 1977 to 1994 — also make up 14 percent of the population and purchased used vehicles 51 percent of the time. Their median salaries in 2017 ranged from $26,100 for the youngest to $50,000 for the oldest, J.D. Power said, citing the census figures.

Parents and children alike are seeking attractively priced vehicles with a history of dependability, J.D. Power's Banks said.

"They seem to have that same mentality," Banks said. "Regardless of how you look at it, pragmatic parents or pragmatic young adults, they're opting for the value alternative."

Of 2,100 consumers surveyed for Cox's "Evolution of Mobility Study," Generation Z and millennial participants said owning or leasing a vehicle was too expensive much more than older respondents. The number who agreed with that statement has risen 9 percent since 2015 for Generation Z and 10 percent for millennials.

"They are far more likely to tell us that owning a vehicle has just become too expensive," said Isabelle Helms, vice president of research and market intelligence at Cox Automotive. "We know their financial situations. We know they are plagued with debt."

Other options

Many adults don't want to have to co-sign with their parents, according to Jenn Reid, vice president of automotive marketing and strategy at Equifax. If the dealership offers those customers a different scenario, especially for someone who hasn't had a vehicle before, it can dramatically change the outcome.

Reid says in a market saturated with certified pre-owned and first-time buyer programs, consumer education and underwriting standards enhanced with technology can go a long way in helping these customers become financially independent with their vehicles.

"I'm a firm believer that there is literally a lending program for everybody," Reid said. "It's about putting the consumer in the right vehicle, with the right terms, and setting them up for success."

Still, parents such as DeLozier who have paid for countless repairs, replacements and vehicles outright don't feel the options are as efficient as stepping in themselves.

"No one has a gun to our heads," he said. "I can tell my daughter, 'You have to make a two-hour bus commute into Cleveland every day to go work at the hospital.' I suppose I could tell her that.

"You want your children to succeed, so you basically say, what am I capable of doing for them?"

https://www.autonews.com/sales/debt-saddled-buyers-lean-mom-dad

Someone who had 5 kids brought it on themselves. No sympathy!

zzyzzx says

Someone who had 5 kids brought it on themselves. No sympathy!

This is true.

Kakistocracy says

Still, parents such as DeLozier who have paid for countless repairs, replacements and vehicles outright don't feel the options are as efficient as stepping in themselves.

"No one has a gun to our heads," he said. "I can tell my daughter, 'You have to make a two-hour bus commute into Cleveland every day to go work at the hospital.' I suppose I could tell her that.

"You want your children to succeed, so you basically say, what am I capable of doing for them?"

Absolute fucking idiots, parents like DeLozier. He should have his intestines ripped out.

Bailing out your kids by buying and fixing their cars NEVER makes them self-reliant, in fact, just the opposite, you're enabling them to continue being Socialist slugs. Let the bitch take the bus for two hours, it will definitely motivate her to stop paying $200 on a cell phone plan, buying $1000 new iPhones every year, eating out every meal and stop buying $5 lattes every morning.

LOL @ another whiny shit article courtesy of Kaki-bot. Idiots sre buying their 25y.o. kids Infinitis to replace Corvettes, because kid got laid off, but student loans are to blame. Right.

MrMagic says

So why didn't she buy it instead of lease it and build up equity instead of just throwing the lease payments away, just like rent? She'll have nothing to show for all the money she spent when the lease ends. Bad choice.

The last car I bought I ended up trading it in 3 years later anyway. Leasing had been the better deal, I could see what the finance companies could not.
Why buy new or preowned if leasing was so dirt cheap?

Now there just isn't any escape the car lots want your money regardless how you obtain a car.

Recently there's been a commercial on the radio stations "Used Car Liquidators" or something like that. They guarantee that if you bring your car down to them, they will pay you top dollar for your used vehicle. Seems like private industry keeping the success of Cash for Clunkers going. I remember junking a car that had a blown engine and transmission for $1200 during cash for clunkers heyday. Now you'll be lucky to get $35 for it. But make no mistake these Used Car buyers will pay a premium now for your used car so they can keep the used car market inflated. The days of finding a 5 to 6 year old car on Craigslist or a private buyer for $1200 to $3000 is over. We'll never see that again.

She got a good payment $179 a month. They tell you $179 but then you have to pay local sales tax on your lease payments so it bumps up to $200 a month.

She may buy it after the lease depends on if she still likes the car or not.

Mazda has gone up a lot since the last model I bought from them. I'm paying $470 a month for my car.

I hope in three years they'll stop putting all of the tech crap in the cars it just inflates them.

FTR my daughter saved up and bought/leased her own car, I just went to be the hard ass if they tried any shit.

Friday we went after we agreed on the car, the salesman told us to come back tomorrow(Saturday) the finance department was closed. The idea was they would run her credit which my daughter and I believed to be adequate to get in the car. The sales man told us regardless I could cosign. My daughter ran her CR before she shopped so she knew her score. The next morning the salesman told us... I got some bad news she has a considerable lower score than we thought, he said even if I cosigned they look at her as a risk. He said they'll do the deal and put her on as the sole buyer no cosigner but they wanted more down and more payment a month. I demanded to see the credit report that I would dispute an item he said was on it. He wasn't very keen on producing that report. He said he goes by a CR agency other than what is provided on the free CR's.
That was why it was lower. I asked him again, I said if they are disparaging a credit that I know was paid off, I wanted to see it. Then I reminded him the night before he told us that even she had bad credit that I could cosign and the price he showed us was even for that scenario. He then went back to the manager I guess he told them I wasn't buying and would probably walk. He then came back and said good news, we'll take the higher score but I had to cosign. I said that's not good enough, the fine print in the incentive said a score lower than the score he was talking about was all that was required. He went back again, then came back and agreed. She signed her own deal and used her own money. I saved her from the guy tried to get her for an extra $95 a month.

Unfortunately I spent all my raging bull energy at the Honda dealers as was docile little Lamb by time I got to Mazda. It's only the 7th car I've bought from the same salesman.
But the biggest issue for me was buying a brand new car that was the first specimen to hit the market with no incentives. I couldn't have picked the worst car to try to buy if I were looking for cheap payments. I bet those that lease the same car in November of this year will pay a 1/3 to almost 1/2 less than I am.

Still I probably should have waited until Sunday to go to Mazda on a fresh start. I may have taken my car to another dealer and found one willing to take delivery of my lease return there. I think for $470 a moth, I should be driving an American car.

Do you guys know Camaro comes in 4, 6, and 8 cylendar options?

The 4 banger 2.0 can be had for $18K the 6cyl about 28K and the 8 cyl for $36K

I think I'll be looking at the American cars after my Lease is up.

What's the point of a camaro with anything less than V8, also do they still make them in manual?

@tenpoundbass the tactic they tried on you is old and profitable for the dealership. Basically they shake your confidence in your credit history and get you to sign papers at a higher interest rate than the bank actually is offering you. You don’t see the bank’s approval letter at 6%. You just hear from the finance department guy that her rate is 10%. You sign, and they split the extra interest with the bank 50-50. Over the life of the loan, 4% could be $3500 extra, and so the dealer just made $1750 for lying to you.

Best defense against this is what you did, get your own CR. But even better than that is to actually apply for the loan in person at our local bank. They’ll approve you and tell you the rate. Then you take that letter to the dealership and present it when you find a car you want to buy. That gives them no wiggle room to lie to you and you get the best financing possible.

I know about this because I sold cars for a minute back in my early 20s.

Best just to go to car dealerships with loan already. I hate when dealerships talk in terms of payments instead of total amount its such a bullshit game.

RC2006 says

Best just to go to car dealerships with loan already. I hate when dealerships talk in terms of payments instead of total amount its such a bullshit game.

Exactly, it's really easy to call your bank and get their car loan rates. Then just plug the rate into any online payment calculator, and you'll know all the available monthly payments ahead of time, so the dealer can't screw with you.

Wifey had some sort of VIP program through her company that said she gets invoice pricing, and kept harping on it and told the dealer about it. I told her to just zip it, as we will pay LESS than that price for her car. She kept saying "how", this is suppose to be the best deal because it's through a major corporation.

When I got done with the dealer and we left, she said, I guess that VIP Program wasn't that great, after all......

RC2006 says

What's the point of a camaro with anything less than V8, also do they still make them in manual?

I agree I was just surprised they had those other options. Yes they still make a manual in all engines.

Quigley says

Best defense against this is what you did, get your own CR. But even better than that is to actually apply for the loan in person at our local bank. They’ll approve you and tell you the rate. Then you take that letter to the dealership and present it when you find a car you want to buy. That gives them no wiggle room to lie to you and you get the best financing possible.

I know about this because I sold cars for a minute back in my early 20s.

You're absolutely right I should kick my self for not thinking of that. I do have a 875 credit score.

All my wife's doing she handles setting the bill pay systems and sweat the $ amounts between the savings and checking.
I would probably have a crappy credit score if not for that woman

Tenpoundbass says

I do have a 875 credit score.

How? I thought it only went to 850?
What I do know is that your credit score is like Schroedinger’s Cat. Look at it and it’s going to change states.

Hate car shopping. I pay cash and still had to walk out because dickheads tried to sneak extra 1000 for themselves into government taxes.

Quigley says

Tenpoundbass says

I do have a 875 credit score.

How? I thought it only went to 850?

Maybe that's Marcus math?

I'm sorry I meant 775.

Tenpoundbass says

I'm sorry I meant 775.

Whew.... I thought for a second Marcus was wearing off on you.. good thing.

I just checked, mine's 842. The knuckleheads at the bank never leave me alone when I come in.

Quigley says

I know about this because I sold cars for a minute back in my early 20s.

I did too. Did you use a 4-square?

Obligatory:

Even the total price before 'Market Adjust' is bull shit. I can't read it all but you can see the destination charge. That's a BS fee they put there to knock the price you pay up. Another common one is a fee for it sitting on their lot. Don't ever pay any of that shiite.

Ha! There is a $1700 gas guzzler tax! hahaha

Naperville Illinois wow...

just_dregalicious says

Even the total price before 'Market Adjust' is bull shit. I can't read it all but you can see the destination charge. That's a BS fee they put there to knock the price you pay up. Another common one is a fee for it sitting on their lot. Don't ever pay any of that shiite.

I think the intent was to show the $20000 "market adjustment" bullshit. Otherwise yeah, I would have loved to see the whole window sticker with detailed pricing and in high res so that I could read it.

MrMagic says

Whew.... I thought for a second Marcus was wearing off on you.. good thing.

I just checked, mine's 842. The knuckleheads at the bank never leave me alone when I come in.

LOL, I just checked mine. I'm at 841. Got me beat.

Zero debt and pay off my two cards each month.

Last time I was at the bank, I wanted a low limit credit card for a new business - but said they weren't allowed they couldn't run my credit. They gave me $25k without a blink. No credit pull either.

joshuatrio says

LOL, I just checked mine. I'm at 841. Got me beat.

Zero debt and pay off my two cards each month.

Last time I was at the bank, I wanted a low limit credit card for a new business - but said they weren't allowed they couldn't run my credit. They gave me $25k without a blink. No credit pull either.

It's nice to be "wanted" at the banks. LOL.

I do the same, have zero debt, except for a partial mortgage. The stock market was returning (except for last year) a lot more than my mortgage rate, so instead of locking up cash in the house, I let it ride in the market where it was more liquid (plus paying a higher return) since there is no equity/value growth in the housing market here.

We throw a ton of stuff on the credit card, primarily to rack up points/air miles, then pay it complete off at the end of the month.

My bank was starting to really bug me when I went in to cash a check or get cash. A soon as I swiped my ATM card for identity, and they saw my balances come up, their eyes would get real wide and they would immediately say "Would you like to talk to one of our investment bankers"?

I finally told them to put in big RED LETTERS on my account when it pops up "DON'T ASK". They've finally calmed down.

MrMagic says

My bank was starting to really bug me when I went in to cash a check or get cash. A soon as I swiped my ATM card for identity, and they saw my balances come up, their eyes would get real wide and they would immediately say "Would you like to talk to one of our investment bankers"?

Lol, yep.

MrMagic says

@tenpoundbass the tactic they tried on you is old and profitable for the dealership. Basically they shake your confidence in your credit history and get you to sign papers at a higher interest rate than the bank actually is offering you.

I think the reason is the "looking beyond the sale" tactic. When they (not quite) close the deal promising one set of terms you are then thinking about how great driving the car is and aren't any longer concerned with the payment terms. When those terms are suddenly switched, you don't want the good feelings to evaporate (and the "deal" to evaporate) so you wind up taking whatever (lousy) deal they propose at that moment.

The same phenomenon works the same way with trade-ins too: promise customer great deal, wait a few days, then offer customer something significantly less. With the trade-in, they'll delay the "final inspection" — our trade-in specialist won't be here until
Monday, you'll have to sit tight on this great deal until then. During that time you'll be "looking beyond the sale" to all the great things to come. When the final inspection and final sale happen, the trade-in is much lower than "promised," but since you've been imaging how great everything is going to be, you've sunk several days of time waiting, and you told those 15 Craigs List buyers you are trading in, you go along with the bad deal.

zzyzzx says

I think the intent was to show the $20000 "market adjustment" bullshit. Otherwise yeah, I would have loved to see the whole window sticker with detailed pricing and in high res so that I could read it.

I don't have any issue with a $20k "market adjustment" — it's in plain black-and-white for all to see. Let them charge whatever the market will bear.

I let it ride in the market where it was more liquid (plus paying a higher return) since there is no equity/value growth in the housing market here.

Growth in the housing market is not relevant, it is the interest on the loan. The issue is whether the stock market investment is paying more than the interest costs. The housing market growth would be relevant in a rent-buy decision. Since you already own the home, the home will have the same "appreciation" regardless of any mortgage.

HeadSet says

Growth in the housing market is not relevant, it is the interest on the loan. The issue is whether the stock market investment is paying more than the interest costs. The housing market growth would be relevant in a rent-buy decision. Since you already own the home, the home will have the same "appreciation" regardless of any mortgage.

Nope, growth in the market IS relevant. The appreciation (or lack of) has a big bearing on overall investment value, outside of the financing cost versus stock market return. It's two different animals that work together. Here's why.

One example: House paid off, local appreciation running 3%, what's your net gain on the house investment? 3%
How about house paid off, local appreciation running -3%, what's your net gain? -3%

Example 2: Mortgage on house, interest rate: 3.5%, Cash invested in stock market instead returning 6%, local appreciation running 3%, what's your net gain on the house? 5.5%
How about Mortgage on house at 3.5%, Cash invested in stock market making 6%, local appreciation running -3%, what's your net gain? -0.5%

You would be making more in a positive appreciation market and wouldn't be losing as much in a negative appreciation market in example 2 carrying a mortgage.

Plus, I didn't factor in any equity buildup from the mortgage payments, since that would be same in both situations.

Example 2: Mortgage on house, interest rate: 3.5%, Cash invested in stock market instead returning 6%, local appreciation running 3%, what's your net gain on the house? 5.5%

I see that differently. Whether the house appreciates or not does not matter, you already own it. The decision is still "if you can beat the mortgage with stocks, leave the mortgage be and put the cash into stocks." The decision is not "if the house appreciates/depreciates, pay off the loan."