Feds to up Interest Rates

[mcinfantry]

Pay cash.

Yep
Real B6g members only use cash

and I mean hun-dogs

not a wire transfer, check or debit card
Real hard cash

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[JeffL]

these days people are financing the ADMs. crazy.

 

[AzureGray6G]

I wish my pay went up as easily as they raise rates!

Well, as long as pay raises are averaging 3% and inflation is averaging 6-7%, people in America are basically getting "poorer"

 

[JBlanco]

these days people are financing the ADMs. crazy.

Crazier are the banks that are financing the ADMs! If the lender defaults and the vehicle is repossessed, the banks is stuck with an overpriced used vehicle.

 

[1979]

Here come all the financial advisors

 

[YULQQKN4]

Crazier are the banks that are financing the ADMs! If the lender defaults and the vehicle is repossessed, the banks is stuck with an overpriced used vehicle.

Yeah its crazy! Most of my banks are financing 130% of invoice or MSRP (depends on bank) or sometimes they use NADA or BlackBook or JD Powers....and advancing up to 130% of that number. Things could get really really really really ugly really quick.

 

[JBlanco]

Well, as long as pay raises are averaging 3% and inflation is averaging 6-7%, people in America are basically getting "poorer"

According to the Bureau of Labor Statistics, median weekly earnings have increased ~9% from Q1 2021 to Q4 2022, so if you are getting "poorer", it's time to get a new job.

 

[tock13]

I have build sheets in with a couple dealers for the 27th bank reopening regardless of the interest rates. I figure by the time I can get anything built the interest rate will be on the way back down.

 

[AzureGray6G]

According to the Bureau of Labor Statistics, median weekly earnings have increased ~9% from Q1 2021 to Q4 2022, so if you are getting "poorer", it's time to get a new job.

So would that be 4-1/2% per year ? And how much was inflation during that time ?

 

[AzureGray6G]

So would that be 4-1/2% per year ? And how much was inflation during that time ?

Here are the published inflation rates for 2021 and 2022
The average for 2021 - 2022 = almost 13%

 

[AzureGray6G]

Here are the published inflation rates for 2021 and 2022
The average for 2021 - 2022 = almost 13%

So even if the median weekly earnings have increased ~9% from Q1 2021 to Q4 2022, people are getting "poorer" ?

 

[Roger123]

Many have been waiting 2-3 years... I would assume the average auto loan term is around 4 to 4.25 years these days. I'm sure most people that are still waiting can put more than 50% as a down payment if they were smart about putting money aside during the wait.

BUT I'm sure for a lot of people—whether they are willing to admit it or not—the Bronco was always a stretch purchase and they may not have been squirreling money aside while they waited. Or perhaps they suffered a financial setback during the wait and are still recovering. And for those people, interest rates have pushed them out of the market unfortunately.

• Americans are taking many years to pay back their auto loans. The average auto loan term is 69.7 months for new cars, 68.1 months for used cars and 35.9 months for leased vehicles, according to Experian.

 

[BlarneyStoned]

That's gross. In my opinion, if you can't afford a 3 year loan, you can't afford the vehicle. I could see someone considering a 5 year loan if it's an unexpected purchase and they absolutely need it for their family.

I'll do 5 year loans but make 3 year payments, that way if I do have something come up I have more flexibility in managing my cash flow without missing a payment or paying late. In this case I've been putting what would have been my monthly payment into a savings account ever since I made my reservation, so 2.5 years worth of payments are sitting there for a down payment. However if I can't get a rate under 7% I'm probably just gonna pay cash outright for the damn thing.

 

[Roger123]

Here come all the financial advisors

Buy low, sell high.

 

[DryYourTears]

Yeah its crazy! Most of my banks are financing 130% of invoice or MSRP (depends on bank) or sometimes they use NADA or BlackBook or JD Powers....and advancing up to 130% of that number. Things could get really really really really ugly really quick.

There are serious concerns about an auto loan "bubble" popping. Lots of people doing dumb things - trading in cars they owe money on and financing that debt into a new vehicle purchase, really long terms (as mentioned), and late payments have been increasing since at least mid-last year. Plenty of articles out there about it.

I financed vehicles for many years. When rates were low or there were special deals, I'd finance for 5 years so I had cushion if something bad happened, but often pay off early, or at least trade in with some equity. I'm glad I've avoided ADM and gotten to a point where I didn't need a loan, but it took years to get there (and some luck).

Hopefully if the bubble does pop, it doesn't tank the economy like the home loan issue did.

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