Topic: Upside Down Major

[tooscoops]

these things lease... small percent actually pony up the cash or finance it. but with these long terms available, a finance is less money/month, so i can see how some people might go that route these days.

wow. that is a tough spot. negative of 29k... no bank will do that (in nearly all cases)... even if they did, say a 5 year term, at used car rates, they are paying 547 before adding an actual car to the mix... pretty tough to lower payments considering. plus, IF something like that got approved, unlikely they'd get the rate i used.

[Cord]

Presumably the $90k included tax.

A top of the line F-pace with the four major option packages is $82k. That's before choosing an extra-cost colour or upgraded wheels.

Yes, tax included.

$16500 in factory options + $1575 freight.

[OliverD]

Shoulda leased it. At least then they could throw it up on Leasebusters.

[Jaeger]

Although the overall theme of being upside-down is the same, the sheer amount of dollars involved with new-ish cars in the luxury segment can make for a spectacularly dismal scenario. We recently had a person wanting to get out of their Jaguar F-Pace and into a much cheaper used vehicle. The goal of this customer was not a frivolous desire for something new. Apparently something had happened and they were attempting to lower their monthly car expenses. They had paid $90,000 for the Jag (he showed me the bill of sale) and currently owed $84,000. The horror came in when we tried to determine the Jag's value as a trade-in. Since these types of cars are not what we'd normally stock we sought information from the local Jag dealer as well as outside wholesalers and exporters in an attempt to get a number. The Jag dealer wanted nothing to do with it and wouldn't even provide a figure that they'd own it for. None of the wholesalers we consulted had any interest in owning it either. We finally got one guy to commit at $55,000. So, depreciation of $35,000 and negative equity of $29,000 in a few months.

The total lack of interest in this car surprised me. I don't know much about them beyond what I've read. But I'd assumed they were well regarded. Apparently not by the people that actually have to sell them.

I'd say if you have zero, zip, nada deneros to put down on a new car purchase then a $90k new car is NOT something you should be purchasing.

Speaks volumes that the Jag dealer wanted nothing to do with it - something I'm guessing they don't communicate to potential new car buyers. 

[Fobroader]

So how big of a ginormous turd is the F pace if the dealer won't touch it with a 10 foot pole....yikes, that speaks volumes for me.

[evil_twin]

Still...that number isn't really that surprising is it?   Buying a $90k vehicle (and especially a FBC) how could you expect anything BUT a huge depreciation the minute you drive if off the lot?

I'd say if you have zero, zip, nada deneros to put down on a new car purchase then a $90k new car is NOT something you should be purchasing.

 

People shouldn't be buying a brand new $90k vehicle if they can't stomach the actual cost of the car (and not just monthly payment).

[Fobroader]

Stupid is as stupid does.

You can't legislate stupid or expect business owners to parent/babysit adults who want to make bad decisions.

This!!

[tooscoops]

yep. as much as "life changes" and tough times happen... you need to prepare for them. rainy day funds, and emergency reserves of cash are just non-existent anymore. everyone buys a car expecting today to be the worst state they will ever be financially. so wrong for so many people.

i shake my head at least once a day... it varies between shaking it at peoples expectations, and at peoples financial situations.

[johngenx]

Who the F... puts down 4K on a 90K car..?

You'd probably be surprised at the number of people shopping $50K+ cars that have pretty high incomes and literally no money in the bank.

[tooscoops]

yep... living paycheque to paycheque happens despite the size of that pay. increase what someone makes and it usually just increases what they spend.

putting 4k down on a 90k car is quite surprising... amazing anything was put down.

[mmret]

Who the F... puts down 4K on a 90K car..?

You'd probably be surprised at the number of people shopping $50K+ cars that have pretty high incomes and literally no money in the bank.

In spite of the government's best efforts, I am still flush with cash.

Sent from my SM-G930W8 using Tapatalk

[tooscoops]

ok... haven't done any in a while...

my co-worker i am now calling the "grave-digger" considering how deep he is burying a few customers lately... while he isn't about to smack sense into them, it really isn't his fault, these customers are just dense.

ok, one... wants out of his cherokee... bad finance rate, long term, drives 40k/yr. so his trade is worth 11300 (ouch)... owes 28. wants a wrangler. the bank approves it... he is now in a 2 door wrangler that if he makes all his payments, he will be paying over 64 grand.

another, wants to lower payments, is at 315ish... on a crew ram she bought new a year ago. higher than avg kms, dents all over and a big scrape down the side. worth 21500... owes nearly 45k. decides to get a used 200 to lower payments to 305ish. so that means she will have paid over 55k for a used 200... a nice one, but still... we are selling it for like 22k. bank had the good sense to say no to that one.

[johngenx]

How could someone buy a crew-cab truck for $315/month and owe $45K on it?

[dkaz]

How could someone buy a crew-cab truck for $315/month and owe $45K on it?

Biweekly payments for 8 years I'm guessing. Although it could also be weekly payments.

[tooscoops]

bi weekly, yep. and that means that *gasp!* the 200 payments are bi-weekly as well.... wrap your heads around that... 300+ bi-weekly for 7 years on a car we have advertised for 21-22 grand.

and she was honestly happy with the deal... thought it was a smart decision.

almost lucky for her, she had entered proposal... she didn't think that would affect the credit application since the payments were near the same as what she already had. bank disagreed.

[dkaz]

That's nuts. I thought $325/mo for 7 years @ 0% was bad. It's not a difficult payment to make by any means (especially since I'm not paying $2250 a month for rent and saving $1600 a month for a house downpayment anymore) but I'm very much looking forward to paying it off, then likely no more car payments ever for the rest of my life.

[tooscoops]

two rios in today... one was 7k upsidedown, the other only 4k.

might not seem as drastic, but this in on cheap cars to start. being 10-15k off on a 60+k truck is one thing... but 7k off on a 20k car is rough... especially because the cheap car is bought with the intention of being inexpensive... some of those trucks are making money for the owner every day, so it's not as big a deal to them.

[johngenx]

If you buy a $20K Rio new, then you're basically $7K upside down the day you drive it, assuming nothing down - 100% financed.  On cars that depreciate hard, it's prudent to put some dough down, or keep it handy, or take a short financing term so you can outpace the depreciation.

[Gurgie]

If you buy a $20K Rio new, then you're basically $7K upside down the day you drive it, assuming nothing down - 100% financed.  On cars that depreciate hard, it's prudent to put some dough down, or keep it handy, or take a short financing term so you can outpace the depreciation.

Generally with zero down on any car & a 5yr loan, you're upside down for the first 3yrs pretty much 

[Fobroader]

If you buy a $20K Rio new, then you're basically $7K upside down the day you drive it, assuming nothing down - 100% financed.  On cars that depreciate hard, it's prudent to put some dough down, or keep it handy, or take a short financing term so you can outpace the depreciation.

For a car like that I would go maximum 3 years financing with a few grand down. Not worth it, whats a Rio worth after 5 years of financing, whatever fuel its got in the tank??