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    Thread: A Third of New-car Buyers Roll Debt From Old Vehicles Into Their New Loans

    1. 03-25-2020 11:33 PM #101
      Funny this thread gets bumped by a bot...
      We just took out a 84 month loan. 0% interest, but still, daunting term. However, we have equity in the trade in, not debt, so that's my down payment. Looking at amortization and autotrader pricing trends, we won't ever be upside down on the car. I can't imagine rolling debt into a new car, increasing payments. At what loan-to-value do banks start saying no?

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    3. Learning New Things Every Day. GreenandChrome's Avatar
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      03-25-2020 11:35 PM #102
      Quote Originally Posted by shimps1 View Post
      Funny this thread gets bumped by a bot...
      We just took out a 84 month loan. 0% interest, but still, daunting term. However, we have equity in the trade in, not debt, so that's my down payment. Looking at amortization and autotrader pricing trends, we won't ever be upside down on the car. I can't imagine rolling debt into a new car, increasing payments. At what loan-to-value do banks start saying no?
      Silverado or Equinox?

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      03-26-2020 12:19 AM #103
      2 of my 3 cars are paid for. Where’s my HJ from Ramsey? Tell him to lotion up first too.
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      03-26-2020 07:40 AM #104
      Semi related. I once helped audit a company that purchased sub-prime auto debt. That was some sad stuff. Insane interest rates and bi-weekly payments for an aging luxury car with too many miles on it already. There’s no good outcome there.

      The OP is really a tier up from that but it’s still dumb. People are way too focused on what their payment will be rather than term and total. “Oh the new model is out and my payment won’t change much...”

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      03-26-2020 08:17 AM #105
      Quote Originally Posted by Taco1933 View Post
      The OP is really a tier up from that but it’s still dumb. People are way too focused on what their payment will be rather than term and total. “Oh the new model is out and my payment won’t change much...”
      I think it might be more complicated than that. For example their car might be a total pile and it makes sense to get rid of it for something more reliable. At least then you have a known payment and no surprises.

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      03-26-2020 08:41 AM #106
      Quote Originally Posted by CTK View Post
      I think it might be more complicated than that. For example their car might be a total pile and it makes sense to get rid of it for something more reliable. At least then you have a known payment and no surprises.
      There are exceptions to every rule, but it’s pretty rare that a car turns to junk within the first five years of ownership (and most of those years should be under warranty). That’s a very small sliver of that 1/3.

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      03-26-2020 10:27 AM #107
      Quote Originally Posted by shimps1 View Post
      Funny this thread gets bumped by a bot...
      We just took out a 84 month loan. 0% interest, but still, daunting term. However, we have equity in the trade in, not debt, so that's my down payment. Looking at amortization and autotrader pricing trends, we won't ever be upside down on the car. I can't imagine rolling debt into a new car, increasing payments. At what loan-to-value do banks start saying no?
      They don't, they simply raise the rate for it to make sense for them and where any fiscally responsible person would turn away, but most don't understand that, don't do the math and end up with the ridiculous rates and bi-weekly payments as mentioned elsewhere in this thread. Basically they end up taking out a personal loan because the car is no longer worth what the loan is for, and for all but the highest rated borrowers, personal loan rates are typically 10-20%.

      If I wasn't stuck with the trade in value of my Infiniti at $27.5-$30K w/ a lease buyout of $35.5K right now, I'd be taking advantage. But it would be foolish to roll in ~$6K worth of payments onto another vehicle when I can simply ride the lease out (June 2021), and more likely just wait till December when the value is close enough that a dealer is more likely to be willing to eat the remaining payments.
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    9. 03-26-2020 10:34 AM #108
      Quote Originally Posted by GreenandChrome View Post
      Quote Originally Posted by shimps1 View Post
      Funny this thread gets bumped by a bot...
      We just took out a 84 month loan. 0% interest, but still, daunting term. However, we have equity in the trade in, not debt, so that's my down payment. Looking at amortization and autotrader pricing trends, we won't ever be upside down on the car. I can't imagine rolling debt into a new car, increasing payments. At what loan-to-value do banks start saying no?
      Silverado or Equinox?

      It's free money.
      Yukon Denali actually. Same deal on some GMCs.

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      Yesterday 12:37 PM #109
      Quote Originally Posted by shimps1 View Post
      Yukon Denali actually. Same deal on some GMCs.
      Very nice.
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