Camaro5 Chevy Camaro Forum / Camaro ZL1, SS and V6 Forums - Camaro5.com - View Single Post - Americans increasingly going upside down on auto loans

Silverado · 01-02-2008, 11:58 AM

Being upside down on a loan...any loan...means that the loan is "outstanding" for more than the item (car, home, etc) is worth. If there was no downpayment or the downpayment was minimal, then the loan pretty much starts out upside down (unless there was a great deal to begin with...even then, on a car, it turns upside down pretty quickly.). Carrying any loan amount over to the next car is a terrible idea, period.

Credit card "debt" is easy to manage....my wife and I basically use the credit card to "build up good credit" and to keep from writing checks for everything...if we don't have the money in our checking account to pay for an item, we don't buy it. We just write one check at the end of the month to the credit card company and we're done with it. I even tried to "charge" my Silverado when I bought it (okay, not the full amount, just the balance after the two trade in's I had at the time and, I was using my GM card to build up for the next purchase....). The dealer just wasn't equipped to handle charging a vehicle.

I don't do car loans any more. If we can't write a check for it (again, the balance after counting the trade), then we don't get it. We just agreed yesterday, as a matter of fact, on the new Enclave. The dealer finally came down to our number. We had a set amount we were willing to spend (cash outlay) and that was it. So we are ordering an Enclave, trading in the Tahoe and paying some cash. In mid-February when we get our new vehicle, it will be paid off already.

But, not everyone can afford to pay for the entire vehicle...I get that...but even car loans are easy. Don't get more loan than you can afford to pay for. Yes, that almost always means getting less car than you want, but that's what you should do.

Of course, I don't think lenders should approve people for the most of the loans that they do anyway. When I was working at the Lexus dealer, the finance guy actually told me that 51% of the people that come in to buy cars can't afford them. If that's known ahead of time, why are the lenders allowed to approve them? That's ridiculous. I'm all for people being responsible for themselves, but because of what it ends up doing to the economy, because of what it ends up costing other people, I think there should be some tighter regulations on the loan process (cars, houses, everything).

01-02-2008, 11:58 AM	#11
Silverado GM Guy For Life Drives: 2010 GMC Yukon XL Join Date: Apr 2007 Location: Omaha, NE Posts: 971 View My Garage	Being upside down on a loan...any loan...means that the loan is "outstanding" for more than the item (car, home, etc) is worth. If there was no downpayment or the downpayment was minimal, then the loan pretty much starts out upside down (unless there was a great deal to begin with...even then, on a car, it turns upside down pretty quickly.). Carrying any loan amount over to the next car is a terrible idea, period. Credit card "debt" is easy to manage....my wife and I basically use the credit card to "build up good credit" and to keep from writing checks for everything...if we don't have the money in our checking account to pay for an item, we don't buy it. We just write one check at the end of the month to the credit card company and we're done with it. I even tried to "charge" my Silverado when I bought it (okay, not the full amount, just the balance after the two trade in's I had at the time and, I was using my GM card to build up for the next purchase....). The dealer just wasn't equipped to handle charging a vehicle. I don't do car loans any more. If we can't write a check for it (again, the balance after counting the trade), then we don't get it. We just agreed yesterday, as a matter of fact, on the new Enclave. The dealer finally came down to our number. We had a set amount we were willing to spend (cash outlay) and that was it. So we are ordering an Enclave, trading in the Tahoe and paying some cash. In mid-February when we get our new vehicle, it will be paid off already. But, not everyone can afford to pay for the entire vehicle...I get that...but even car loans are easy. Don't get more loan than you can afford to pay for. Yes, that almost always means getting less car than you want, but that's what you should do. Of course, I don't think lenders should approve people for the most of the loans that they do anyway. When I was working at the Lexus dealer, the finance guy actually told me that 51% of the people that come in to buy cars can't afford them. If that's known ahead of time, why are the lenders allowed to approve them? That's ridiculous. I'm all for people being responsible for themselves, but because of what it ends up doing to the economy, because of what it ends up costing other people, I think there should be some tighter regulations on the loan process (cars, houses, everything).