The Worst Auto Loans You’ve Ever Seen
Oh lord. When I was on active duty I saw a ton of really, really bad loans. People who joke about the young aviators / soldiers / marines / sailors who get this Mustang V6 at 29% interest aren’t really kidding … unfortunately. I also saw a guy buy an 8 year old MX6 at over 30% interest, total madness. But, the worst I’ve ever heard of … I was talking to a salesperson at a Chevrolet dealership, we were looking at SUVs like the Traverse, and I asked him how the heck so many homemaker soccer moms were driving in cars. New and fully loaded Tahoes / Yukons / Suburbans.
He told me that they have been funding them for over 8 years and their interest rates are usually around 10%. Think about it: financing a vehicle for more than 5 years longer than the warranty lasts, and your interest rate completely squeezed. He said it was worse than that, because in a few years when GM inevitably refreshes the exterior, most of them will be rushing to get this new one. And they’re all completely upside down. They therefore end up with longer loans at higher interest rates. And the cycle repeats every few years. He had a client who had to take out a 120 month loan to get his new Suburban. TEN YEARS! People are crazy, and following the Joneses is stupid.
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