[New2Roundel]

Originally Posted by premier3is

You'd be surprised to know how many people live beyond their means.

I'm not arguing that, but I find it hard to believe that anyone is buying a new or recent luxury car with a 10 yr loan AND at >10% interest. I can see that type of behavior at a seedy used car dealer selling abused 15 yo S classes or 7 series cars.

[pz619]

Originally Posted by premier3is

If people are truly getting 10yr loans at 12% interest for a car... 1. You REALLY can't afford it and 2. You need to take some financial courses ASAP on managing money. 3. Get some help for how stupid you are.

Psh a $75k loan is just a $1076.03 payment for 10 years totaling $129,123.85 (54k in interest) on an asset with a sharp depreciation curve. What could go wrong?

[DarkstarZero]

Originally Posted by New2Roundel

I'm not arguing that, but I find it hard to believe that anyone is buying a new or recent luxury car with a 10 yr loan AND at >10% interest. I can see that type of behavior at a seedy used car dealer selling abused 15 yo S classes or 7 series cars.

You're right, the >10% is probably an exaggeration though it's hard to tell since all the advertised numbers are for 'excellent credit' and you can't see the interest rates that people are paying with low scores.

But the 10 year loans are very real. I've personally had my local dealership try to push BMW Select's Balloon financing on me where they said I could just refinance the balloon payment making for a 10 year loan. It felt like they were making commissions on that financing option.

[New2Roundel]

Originally Posted by DarkstarZero

But the 10 year loans are very real. I've personally had my local dealership try to push BMW Select's Balloon financing on me where they said I could just refinance the balloon payment making for a 10 year loan. It felt like they were making commissions on that financing option.

No doubt. It's quite a never ending cycle once you get on that extra-long loan train. Having said that, I think it's smart to finance for whatever period get you the lowest interest. It's definitely possible to pay the loan off early. I don't think however, that a lot of people think much about what it takes to stay above water at the very least.


Personally, I usually go for 5 yr loans, but have no issue with going a little shorter or longer. I paid off the BMW in 3 yrs but had a 5 yr loan. The Jeep will hopefully be almost paid off by the end of 2021 and IIRC right now, we have like a 70 month loan on it. No worries though---it will be paid off WELL before then. And right now, we owe a good amount less than it's worth.

[wdb]

The loan repackaging "industry" moved from home mortgages to car loans almost immediately after the 2008 meltdown. My wife's financial advisor warned us about the bubble about 2 years ago. So yeah, I think it's real.

As for the used market, a meltdown sounds pretty nice from my perspective as a buyer. I'm going to get some popcorn, if the store has any.

[jamesinaz]

Well there has been movement in the used car market I am looking at. There is a single dealer here sells BMW, Audi, MB, etc. Penske Automotive.

0% Interest on every used vehicle under $40,000.

Have to say that limit irks me as I am really considering a 1-3 year old Macan S. They typically run between $40k and 50k. Seems weird to have that cut off.

I was considering paying cash but heck, 0% interest why wouldn't ya.

[dgoldenz]

Originally Posted by jamesinaz

Well there has been movement in the used car market I am looking at. There is a single dealer here sells BMW, Audi, MB, etc. Penske Automotive.

0% Interest on every used vehicle under $40,000.

Have to say that limit irks me as I am really considering a 1-3 year old Macan S. They typically run between $40k and 50k. Seems weird to have that cut off.

I was considering paying cash but heck, 0% interest why wouldn't ya.

You sure it’s not just for loans under $40k? Put down enough to get it to $40k. Don’t know why they’d care what car it’s on. Nothing is free though, they’re making it up somewhere.

[jamesinaz]

Originally Posted by dgoldenz

You sure it’s not just for loans under $40k? Put down enough to get it to $40k. Don’t know why they’d care what car it’s on. Nothing is free though, they’re making it up somewhere.

I don't know. Can't really check yet since my lease runs out in June. Well I can but don't see the reason to bug them until I am ready to make a decision.

[chassis]

No meltdown yet in my area, or online for the vehicles I am monitoring. Popcorn might run out before the economy starts creeping back into action.

[Unknown_Car]

Originally Posted by DarkstarZero

I'm wondering if there will be a complete collapse of the used car market over the next 6 months.

A loan officer told me that I would be blown away by how many people out there have cars they shouldn't be able to afford but do because they got a 10 year loan at like 12% interest in order to have low monthly payments that they could make. These are luxury cars like BMWs, Mercs, Porches, and Teslas.

Edit
Some people find this hard to believe. A great example is BMW's own "BMW Select Financing" program which is balloon financing offering "Lower monthly payments up front and the option to refinance if you're qualified." Essentially turning a 5 year auto loan into a 10 year loan with refinancing (or repossession) at the end of the first leg.
/Edit

Now that means all these people are way upside down on their loans. The first things to go when people try to maintain financial stability are their cars. But since they're going to be so upside down, the easiest way out is to default on the loan. I think everyone is going to do this around the same time - which means a flood of cars going to auction at the same time and then hitting the market at the same time. About 3 months from now is my guess.

I drove by carmax the other day and their lot is already PACKED, fence to fence, bumper to bumper, no room for more cars and no buyers.

But at the same time, auto makers have shut down - so with no new cars coming into the market, will it all just even out?

CarMax was always packet around here, so nothing new.

[DarkstarZero]

Originally Posted by chassis

No meltdown yet in my area, or online for the vehicles I am monitoring. Popcorn might run out before the economy starts creeping back into action.

You'll need to wait 6 months. The crash won't even start for 4.

[NickyC]

Fun times ahead, folks who are underwater on their car loans now are absolutely screwed.

https://finance.yahoo.com/news/fear-...110000556.html

[jamesinaz]

Originally Posted by NickyC

Fun times ahead, folks who are underwater on their car loans now are absolutely screwed.

https://finance.yahoo.com/news/fear-...110000556.html

Wow. I might be sitting in the cat bird seat in June. Looking for a car. No trade. Can pay cash if I want.

[NickyC]

Originally Posted by jamesinaz

Wow. I might be sitting in the cat bird seat in June. Looking for a car. No trade. Can pay cash if I want.

Yep, definitely wait a few months. Good luck!

[DarkstarZero]

“Six months from now, there will be huge, if not unprecedented, levels of wholesale supply in the market,” Dale Pollak, an executive vice president of Cox Automotive, which owns North America’s largest auto-auction company, wrote in an open letter to auto dealers last week. “Cars are coming in, but they aren’t selling. Today’s huge supply of wholesale inventory suggests supplies will be even larger in the months ahead.”

Wow, I nailed it. Maybe I should quit my day job lol

This is a big deal guys, should be front page.

[SAADTHESAV]

Wow this is an insightful thread.

I was planning on buying a 2018-2019 M4.. I guess I should just wait until September to buy one? I really wonder how much used cars will drop from it's current price.

I look for a used 2018-2019 m4 every day and I have a bunch saved on Autotrader. I haven't seen many of the cars get knocked down on price so far. There's still a bunch of overpriced m4's I see at these dealerships.

Going to just track these used cars and see how much they drop over the next several months. Will be interesting to see.

[BzsBimmer]

Originally Posted by SAADTHESAV

Wow this is an insightful thread.

I was planning on buying a 2018-2019 M4.. I guess I should just wait until September to buy one? I really wonder how much used cars will drop from it's current price.

I look for a used 2018-2019 m4 every day and I have a bunch saved on Autotrader. I haven't seen many of the cars get knocked down on price so far. There's still a bunch of overpriced m4's I see at these dealerships.

Going to just track these used cars and see how much they drop over the next several months. Will be interesting to see.

Yeah you’re going to have to wait. The glutton of cars sitting on dealer lots haven’t really been impacted by outside entities trying to ditch their cars. Private sellers probably aren’t feeling the pinch quite yet and those who are under water probably don’t have the reserves to pay the difference.

The boulder just started rolling down hill. Give it some time to pick up speed.

[10"]

you can get any deal you want right now.

20-25% off most new cars....the car industry is going to come crashing down soon...

[DarkstarZero]

All these cars are going to hit dealer auctions at the same time. There will be a huge amount of auction inventory but dealer's won't have any money because they're not selling cars, that means no buying power, that means no bids and nearly limitless cars.

There's no reserve at these dealer auctions, they sell for whatever the highest bid is. This is going to be Christmas for independent dealers, buying up supercars for pennies on the dollar.

[PoorLurker]

Originally Posted by DarkstarZero

buying up supercars for pennies on the dollar.

:cries:
For complete selfish greed, I hope that used car prices don't crash in the next year or so.

I will kick myself thinking I could have gotten a car of my dreams, but I ended up spending all my money on a couple stupid toilets and other house stuff instead.

[SAADTHESAV]

Hate to revive an old thread, but what does everyone think of the car market now?

It's been around 6 weeks since this thread has been made.

Any new thoughts? Still think the used car market will crash?

I've been in the market for an m4 and I still see used m4's going off the shelf at a pretty fast rate. I really have seen no change in price and the buyers market compared to pre corona.

[RM7]

Hard to say, everything will slow, but will prices come down all that much? IMO, you can't be hoping car prices will come down significantly and at the same time hope your house value doesn't crash at the same time.