r/facepalm • u/thenewyorkgod • Apr 28 '24

🇲​🇮​🇸​🇨​ Some people have zero financial literacy

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u/double_ewe Apr 28 '24 edited Apr 29 '24

I work in an adjacent industry and this happens a lot. With an 84mo loan it's almost impossible for your principal payments to keep up with depreciation, so you're basically guaranteed to be underwater at trade-in.

It's not uncommon to see Loan to Value ratios of 130%+ (e.g. borrowing $130k to buy a $100k car).

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u/ballmermurland Apr 29 '24

Not defending the gal here, but 84 month loans for cars should be illegal.

It used to be 60 months as the max, what the hell happened?

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u/RandomNick42 Apr 30 '24

Cars got expensive. TBF they do last longer. A new car absolutely can last 7 years in the buyers hands no problem.

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u/JPolReader Apr 30 '24

My last car lasted 13 years (bought at 2 years old). My current is 6 years old and still feels new.