Have We Gone MAD? The Average Car Loan Swells To Over $520 A Month With Loans Up To 96 Months!

A high monthly payment doesn't mean anything. Someone could have $600 monthly payments but only 2-3 year term.

However, a high payment along with longer terms means that many buyers will be underwater with their car for a significant amount of time. Makes it tough to replace the car for a long time without having some decent equity.

"Have We Gone MAD? The Average Car Loan Swells To Over $520 A Month With Loans Up To 96 Months!"

Yes!!! Tick, tick, tick, tick...

If you have to finance past 60 months, you can't afford the car.

The stage is set for Financial Meltdown #2.

Rescinding the laws that were designed to prevent such a recurrence will likely help it along. Profit at ANY price :-/

Why not just double the all time debt once again?

There will be plenty of people who will be upside down in their auto loans and will be very unhappy campers when the sell or trade in their old heap.

They'll only be upside down if they spend beyond their means and if they do and they get caught, screw them. People without common sense deserve the worst.

@MDarringer totally agree with you, screw them. The problem is that the government will save their behinds like they did with the entire mortgage crisis and other things and we end up paying for it for doing things the right way.

@USNA1999 I agree that the morons will be bailed out. Because lenders know there is "no downside", they do dumb loans.

My solution:

No loans past 72 months (I think 60 is long).

No balloon payment loans. Mini and the Germans love these loans for getting the monthly payment down. Can't pay the balloon payment? Well, we'll be happy to finance that.

Permanent ban on financing "negative equity".

Permanent ban super high interest rate loans with a cap on so that none go higher than 2-3% over prime rate. These stupidly high interest rate loans are prone to default.

I guess this means we will have to live within our means.

As a person of means, I want to remain that way, so my wife and I live within our means and are putting things in place for a rainy day.

Because I grew up poor, I don't want to go back, but it's almost as if the American middle class has gotten OK with utter fiscal irresponsibility because they've been told they "deserve" the best without earning it.

I know you haven't realized this about me, given how kind and gentle I am, but I despise stupid people especially the financially moronic.

You talk a good talk but you support the moron in the White House to abolish all forms of financial regulations to appease the banking industry. Want to do something good ? vote the @$$hole out - otherwise, you're just full of $hit.

@EVisNow Given how you describe the President, I assume you're 100% OK calling Valerie Jarrett an ape, right? Otherwise you'd just be a hypocrite.

MD ... Right On !!!

I think, from a financial standpoint, the 18 to 35 year old adult population has the WORST understanding of financial matters. They believe what they are told by the media (especially if there is a celebrity involved) and the do not read the fine print.

They are completely conditioned to just hit the "agree to terms and conditions" without reading the document and they assume every document is of no consequence, like the "iTunes terms and conditions" or various "privacy policies".

They will, uniformly, all get screwed at some point during their lifetimes.

I don't agree that it's solely 18-35 year olds who choose not to think. If you're in the car business you see ample proof that 18-35 is not a "container" at all. I would say that yes there is an increasing tide of idiots. My sons so won't be such fools.

Where is common sense? Where is due diligence?

People need to be educated. I blame the parents that are afraid to be honest with their kids. I digress.

Lease the same vehicle they will never own (assuming 8yr loan)for half the amount. I never understood the logic of paying $30,000 over 5 yrs or more on a depreciated product. Unless that vehicle is a collectable, a first addition or BMW GTS!
But I'm in the minority.

The ONLY way that buying makes sense if it is your dream car, collectable as you say, you have kids that will trash it, or one that you're going to drive until it dies.

Otherwise lease and dump.

Too many variables, nothing wrong with financing if the APR is lower than what you can make of it (CD, funds, investment...) I know many manufacturers subsidized rates are 0% up to 60/72 months. But if there’s a cash rebate option, the math gets a little more involved.

For the kids, they should work all summer and save up whatever they can. Whether it’s $500 or $5,000, that’s their budget to buy a car. If the parents feel like it, they can match it. Enough of this entitled generation...

@wilfred You must love the bigotry of ageism, grandpa.

I can hear you saying (as you shake your cane in the air): "It's those damned millennials. They don't know the value of work like our generation."

The data on millennials dispels the notion that they don't have a work ethic. In fact, they are no more or less lazy than any generation before them.

Moreover, you do realize that the kids in high school and up to age 22 aren't millennials, right?

There are plenty of fiscal idiot buyers of all ages to go around.

The feds didn't bail out homeowners! They bailed out the big banks who caused the mess. The bigs banks got their asses saved. Homeowners had to suck it up.