American Car Debt is EXPLODING Higher ($1,000 Per MONTH)
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- Опубликовано: 8 июн 2024
- Car payments are exploding higher.
We are now seeing more and more people extending their loan terms just to make the car payment fit within their monthly budget.
People do this without realizing how much they will be paying in interest over the course of that loan.
Also, we are seeing a HUGE uptick in the amount of $1,000+ per MONTH car payments.
This is a value-packed presentation so stay until the end and share it with a friend!
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⏰ Timestamps ⏰:
0:00 - Intro
0:27 - Car Loans Reach $1.4T
1:25 - $1,000 Car Pmts
2:45 - 90 Month Car Loans
3:12 - A Dangerous Road Ahead
3:55 - Roadblocks to Affordability
6:30 - Policygenius Spot
7:45 - Roadblocks Con't
8:44 - Delinquencies Are Up
9:40 - Current State of the Auto Market
12:14 - How Can You Position Yourself
13:17 - My Thoughts
16:01 - LOL
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Have Zach and ray on your show from car edge use to be yaa
I have a family member in finance. They made a comment that because homes are so far out of reach for young people, cars have replaced them as their largest expense, source of pride, and status symbol. They are making payments that would have been equivalent to a home payment 10 or 15 years ago.
Same thing happened in Japan in the 90s / 2000s. I recall the land under the imperial palace was worth more than Manhattan.
True most people in my apartment building drive luxury automobiles but a luxury car in an apartment building is a huge indicator that someone isn’t financially wise. A friend who works in finance once told me that: Homes aren’t necessarily “out of reach” for young people, it’s just that when someone applies for a mortgage loan, when a bank reviews their credit and sees all those student loans, if it also sees that the applicant bought an expensive luxury car before purchasing a home, 9/10 the loan will be denied because the bank already knows that they’ll prioritize a car payment over a mortgage loan, and that the home may end up in foreclosure; It’s as simple as that. At the end of the day, for most young people, home ownership will ultimately boil down to financial literacy and not student debt. My $.02 👨🏾🎓
@@whatwasisaying1338 If you can afford to pay $1-2k/month in rent, then you can definitely afford a mortgage. Based on your information, obtaining a mortgage is where the problem lies
Banks can even collapse due to Fed radically raise the interest rates so can’t the housing market? Houses in some region have declined 30% from its peak. Market itself will find the point of equilibrium where supply n demand will meet.
I am not arguing here but trying to have a peaceful conversation.
Hope everyone is doing well.
@@wesleyguan6833 you're right, absolutely. Housing will eventually be corrected and find its true value. I was speaking in general about the last 5-10 years.
I work around a lot of young professionals (nurses). The new Bronco comes out. My coworker (who most likely lives with parents) says “I went and got my Bronco! I was able to get the payment DOWN to $780/month!” What a stupid, stupid move.
A friend of mine got one and the payment is around $900/mo. Ridiculous.
@@vizzzzzzzle when I was younger, I went out and bought a new car off the lot. But after a few months, the novelty wears off and that payment became a burden. Nowadays I keep my vehicles maintained and running good, and I love that they’re paid off.
I have never had a car payment and I am 35. If you can’t pay cash you shouldn’t buy it
Healthcare folks can be pretty bad with that. Brand new jeeps & 4runners everywhere.
You're just jealous that they got approved for a cool car and you didn't. Bet you'll be punching air when they pull up to work in that fresh new ride 😛
Once you pay off your car. Take 12 months and bank those car payments.
After 12 months, I realized that I don't need a new car and enjoyed the financial freedom. 4 years later I bought a fun car with cash.
Break the payments cycle, get ahead and enjoy the freedom.
the one smart comment on here.
Amen . Financial freedom is the real freedom
But... I got my car last year with 2% interest financing. I could have paid for that car a couple times over in cash, but I'd much rather have a cheap loan (less than inflation) and keep the money invested in stocks
I have not had car payments since 1996.I buy used vehicles.I had a1994 Toyota truck for 21 years 1995-2016 and a Honda Accord 2016-present.I paid a total of $16,000 for the 2 over a 28 year period plus repairs.
"But my car breaks down too often" ; "But my car is not safe according to * rating" ; "But my car feels small" ; but... but... Translate: they crave something new and demand everything "right here right now". Preparing for success is not a page in their books.
It's insane how expensive cars/trucks/suv's have gotten, especially over the last few years.
If people stop buying, the wheel will stall. Buy used car instead.
@@kent570253 This right here, but people dont get it.
Ben hardy just posted a video of a Ford dealer. The cheapest truck base model XL was $48k smh
I’ll take my used and well maintained 2012 F150 with 120k for $16k. Ppl are insane paying over 50k for personal vehicles.
Why does everyone love SUVs so much
Here is a personal finance tip for cars. Get a Sedan or Hatchback maybe even a coupe. Everyone wants SUVs but the problem is that drives up the demand meaning they cost more. MY mom bought a Cadillac SUV (it wasn't an escalade but I don't remember which one) and she could have gotten a CTS with the same interior and better performance for 10 grand less.
Also Sedans will pretty much always get better gas mileage then an SUV with the same power train. Sedans are lighter and lower to the ground meaning they have better aerodynamics meaning.
Not to mention insurance is pretty much always cheaper on Sedans
Also sedans tend to be more reliable since once again they are lighter with better aero. Meaning the Power train doesn't have to work as hard to move it and the breaks don't have to work as hard to stop it.
Congrats on the baby on the way! I just had my first kid (a boy) at 35 years old. Thanks for all your financial education, it helps tremendously.
Congrats!
@@WhiteBoardFinance wow Marko 2nd baby.. u guys r not playing..congrats to u n your wife
Congrats to both!
@@nnekaoa9234😂 Marko
Come on man how many you guys to pop out 6 at least right 🎉🎉🎉
Car Payments Are EXPLODING Higher ($1,000 Per MONTH) - LOL..........Not for me... I paid cash for a 94 Celica. Scotty Kilmer.
Thanks!!
I never leased a car in my life. Just wait 2-3 years, buy used and save 30-40% off list price.
Same. I just bought an X5 with 11,000 miles on it (literally looks like a new car) for $25k off sticker.
Yeah but how will you show to your annoying neighbors that you are better than them unless you have a new car every 6 months? 😂 what’s sad is people actually do that
@@WhiteBoardFinance X5 or any German cars are money pits.
@@tdgdbs1 People do say that. But I got a Mercedes from 2004 and it’s still running great. I do however follow the service guide lines with a service every other year. Now I have to add I don’t drive that much so maybe that’s why. But when cared for, German cars lasts good. Yes services are more expensive, but I haven’t had to fix much on the car at all.
I've owned about 10 German cars. Made money on a lot of them. All depends on how you take care of them.
I know a girl who bought a barely used Kia Sportage and was immediately 10k underwater. She didn't buy gap insurance, totaled it, and then bought another car that put her underwater ANOTHER 5k. So now she has a loan from a credit union for 10k covering the debt from the first car, and another car worth 20k on which she owes 25k. She makes $20 an hour and these two payments are $900. And congratulations on the baby 👶
Is she your wife?
@@jackjack4412 the girl from the story? No lol
@@nick31427 thank god
That $900 is 30%+ of her net income.
@@jackjack4412 🤣🤣🤣🤣🤣🤣
I genuinely feel bad for people struggling with high debt. Been there. I’m also happy to be debt free now but I wouldn’t even be in this spot if it weren’t for people like Marko and a ton of hard work. The struggle to stay debt free continues even after not having any loan payments for 3 years. It’s worth it though, stay disciplined folks!
Most people do it to themselves. Plenty guys I work with have brand new telsas. I know how much they make. They only can do it working overtime. What happens when overtime dries up?
15 years ago when my son was in school, 70% of the children there qualified for free or reduced price lunch based on household income. Yet somehow 100% of their parents drove a better car than mine.
I don't feel bad they're still poor and I'm not
This is true. But I have no feelings for people buying a new large SUV when they can't afford it. I will be enjoying my popcorn watching this.
@@Jeremy_810 well i knew someone pops that was a RE investor made good money drove a luxury car and the children still got free reduce lunch so that doesn't mean much
@@timothyolawunijr8259 means he was probably lying on his taxes. Back then (where I lived) the cutoff was around $45,000/year household gross annual income to qualify for free or reduced price lunch. Closer to $35,000/year for a single parent income.
They need to start making base model cars again and take all the fancy electronics out of the car
I demand more Dave Ramsey impersonations 😂
Thank you, Marko, for another great vid.
personally, I am about to pay off my car (1k left) from a 2018 purchase.
I really wanted to treat myself to something new but my gut has told me to relax.
this is just what I needed to focus on wealth instead of short-term happiness.
appreciate the presentation!
love these vids!
Enjoy ur paid off vehicles take a restful financial break
Save up for 5 years and see if you're willing to write that check for a new car.
@@rathelmmc3194 exactly, I tell people that all the time
Plus, if you've "starved" your car obsession, your next car paid with your savings will feel more "awarded" because you've been waiting soooo long. If ppl keep getting anything "today" then eventually they'll feel no emotional pulse getting new stuff.
To start comparing quotes and simplify insurance-buying, check out Policygenius: Policygenius.com/whiteboardfinance. Thanks to Policygenius for sponsoring this video!
Nice video!
and congrats to the new baby
god bless you and your lady
Thank you very much!
Everyone wants to drive a Range Rover not a Nissan Versa - I call my Versa Topo Gigio after the mouse on Ed Sullivan! OK I`m old! LOL
Congratulations Marko! I hope your family keeps receiving blessings moving forward. Thanks for all the valuable information
I'm still driving my 2000 Acura Integra. Not that I can't afford new luxury car but I hate car payment. My coworkers are driving Tesla , BMW , Benz , Lexus etc. They all look surprised when I told them what I drive. They looked even more surprise when I told them that my house is paid off , no CC debt , 1 year emergency fund , 6 figures in 401k , and I'm about to buy a rental property in future.
I drive a 94 Integra and I love it. Such a fun, reliable, and cheap car.
Appreciate the info as always & congrats on the new addition to the family Marko 🙏🏾
Glad to see you talking about this, Marko!
I have never been more grateful than when I stumbled upon your videos in early 2019…at the end of 2019 I bought a very nice used 2016 Honda Accord and used your methods/suggestions at the dealership and got an incredible deal. I paid it off a year and a half later and it’s still keeps it’s value to this day. I’m not in car debt and not worried about the current situation that a lot of people facing today!! Congrats on the new future baby girl!! 🎉
congrats on the baby !!!yeeyeeee waiting for your school to start up !!!!
Thank you for always putting out great content! Congrats on your future addition to the family👶
Thanks so much!
50 year mortgages are next
Really enjoy when you do these types of slides and presentations
Marko. I like the Power Point format. And the message is clear, people are only thinking about my monthly payment that can be squeezed into my monthly bills. We too want the latest model. And we have a used three year old Subaru. It works just fine but the lust for a new shiny luxury car is there. Hard to resist. But our discipline is to stay within our means and that results in no change. Great video!
This was good. I especially love the outake as always Marko! Keep up the great work! And congrats on your new addition!
Thanks a ton!
Love the format of this video! the charts are an excellent visual aid. Thanks for all the info as always!
Glad you enjoyed it!
Another great video Marko. Congratulations on your baby girl. All the best to your family. Greatly appreciate all the wonderful content that you provide.
Thanks so much!
Here I am with no car payment with 3 cars……started working towards this the end of 2021……
Thanks Marko! Keep these great videos coming.
Thanks!
Mazel Tov to you and the expecting momma (and another good informative video).
Thank you!
Thanks Marko for the knowledge dump 😮
Congrats on expecting Marko! Great content.
Appreciate you Marko!
i love your slides.. all that information in one place.. nice..
Glad you like them!
Congrats on your baby on the way!! Great content, as usual. Thank you for sharing.
Thanks so much!
Incoming famous dave ramsey quotes. "That's stupid with a bunch of zeros at the end." "I want you to have a nice car, but I don't want the nice car to have you."
Congrats on the new baby Marko!
Thank you very much!
My house (duplex) escrow is $1850/mo.
My tenant pays me $1300/mo.
A $1000/mo. car payment is beyond INSANE. What are we doing?
I know it's pretty wild as Americans (we're in the same boat as Canadians), but for example, a new Corolla in Thailand starts at a price roughly similar to the US price. However, they make about 12K average less per year. So they stretch out payments and make larger monthly payments in relation to their monthly income. However as I understand, default is much harder. This is what the manufacturers and banks are hoping for will become the norm in the US in the next few decades. A literal slave of the consumer's own making.
We are about to have our 3rd kid and my wife really wants a Toyota Sienna but i refuse to buy the inflated price. I have the cash on hand but i just cant bring myself to do it, id rather wait.
I love your PowerPoint videos. Don't ever change and sell out like every other financial channel.
Thanks for you content over the years. I was able to debt avalanche during the pandemic. No small part to having a 2010 car paid off. Don’t drive your debt it’s not worth it
Thanks buddy! Almost one million 💪
people with kids that think they are too good for a minivan, and need a90k suburban...
Thanks Marko ✌️ You're the best
Very informative video.
Me personally I bought a lightly used f150 in December 2020. It had been sitting on the lot for a while and the price had come down quite a bit as I had been watching it. I went in at the right time and made a fat down payment and got a 2% interest rate. I’ve got just a few thousand left on the loan been paying 400 a month. Can’t wait to pay it off and drive it for many years to come (knock on wood)! I can’t imagine paying anywhere close to 1,000 a month or for 90 months even!!!
Let’s go!!!! Congrats on the baby Marko!
Thanks for the video. We were just starting to talk about upgrading our vehicle but will DEFINITELY hold off for now 🙅♂️
Glad it was helpful!
Congrats. I had the same with two daughters. At first I wanted a boy but after having girls I’ll tell you it’s great. They’ll always love their dad.
Anyone who takes out a $1k car payment on something that isn't a money maker (i.e. work truck) is a friggin' moron. That is absolutely INSANE.
So many people buy expensive trucks and don’t even haul anything or do a trade… So stupid. You don’t need a 70k king ranch when you’re a couch potato 😂😂😂
@@NickOloteo yes, just watched a video by "Not Just Bikes" talking about these stupid trucks
Here in Ireland over past few years I've seen lots of nice new cars being bought... I feel many of them got trapped by lowish monthly payments
Congrats for the new blessed bundle of joy to your family .
Thank you so much!
A few years ago, my 2002 jeep needed a new engine. I sat down with pen & paper, and did the math.
A five year monthly payment was going to be $1,365.86 a month. My mortgage payment was $593 a month. Since the body was in great condition ( no rust), I rebuilt the vehicle. Bringing it back to new, including the frame, it cost about $16.500 total. That was three years ago. A new vehicle for under $17,000.00 isn't bad considering new was going to be $87,500. I saved $70,000. Not bad.
Congrats! Keep us posted on your car buying journey. I for one am in the same situation and I’m curious to see how you navigate it. We are considering saving up to buy a new ‘24 Grand Highlander. I’ll likely employ your strategy with cash in the last video.
Big Fan of the channel,Thank you for all the videos. God bless.
Thank you too!
Great video, congrats on the new family member!
Thanks so much!
Congrats Marko and thanks for the video.
Thanks for watching!
Congrats on the good news!
Good content man. Keep it coming. Congrats. Buyers should shop rates, and pay as much in cash as possible. Most all stop buying cars if you do not need one!
Appreciate it!
Congratz Marko!
Explained well.
Bruh, u got a whole starwars /hansolo outfit vibe in this vid.
That aside overall good vid!
Good Ramsey, too😎
Congrats on your babyy !!
Your videos are awesome dude. Why would anybody not like them
Thanks for the update! I'm going to be in the market for a car for my daughter this year. Hoping to pick up a good deal. Definitely will pay cash.
I work at car dealership, I have never seen this in my 30 years in the business.. the average car payment is over $500 and most above $800 .. and not luxurious cars .. just plain Toyotas ..
Nice finance bro vest!
Missing the WhiteBoard Finance logo!
Awesome Data.
💪😂
Girls are the BEST!!! Congrats Marko!!! :) And thank you for always putting out great content!
Glad you like them!
Them being the videos I put out haha
Yes marko thank you again
thx 4 a great video..
Glad you enjoyed it
I have a friend that just bought a brand new 700+ horse power Ram TRX. Well over $80k. $12k just for the extended warranty. I'm happy for him, just not for me.
It will be worth $20k a year from now and probably broken down. Extended Warranties never pay out.
Combination of rising car prices, low interest rates, and the trend towards financing rather than purchasing outright has led to an explosion in car debt in the United States.
Good info thank you White boy finance
Too many people buy SUVs because they have a kid. A typical family sedan works just fine even if you have two kids. You don't need a big SUV for 1~2 kids. Stop spending money on these big SUVs that cost $50K+.
I'm upset paying 260/m for a 60 month loan on a Ford Focus because I had bad credit for being a foreigner 😒
I can't imagine paying anything over 700$ on a car. That's rent price in most places in Spain...
Congratulations on the new little one!!!
Thank you so much 😀
Good presentation. Makes me feel good that I listened to my mother in being responsible in economics. I have NO debt, FICO credit score of 835 and live well.
Excellent!
How do you get to 800 and pass it?
@@jimmytimmy3680 850 is max. Never late on monthly payments, pay off credit cards every month, keep CCard balances less than 10% of total credit, keep inquiries to a minimum, card longevity like 10 to 15 yrs. And of course, no bank ruptures. Good Luck...))
Congraduations Marco!
Thank you!!
congrats on the baby!
Congrats Marko 🐣
Congratulations to you & your wife on minion #2 being on the way! 🙌
For a recent graduate trying to buy a car, this is scary. I'll most likely go used and pay in full because of all of this. Still very scary though.
Good luck with that! Had ro drive near and far for my 21 year old used car because what he had saved 💵 wasn't enuf
Highly recommend it. Still driving the same 5k car I bought in college, 3 years after graduation and 4x income later.
@ Sean Edelman Buy a used Toyota, thank me later.
Why buy used? The prices of used cars are even more absurd than new right now. Pay 10% more to choose the colors and options you want, and probably get a better warranty. And you usually get a better interest rate so the prices are even closer than they first appear. For the past few years and likely at least one more it's been either buy new or don't buy at all.
@@rightwingsafetysquad9872 1) you can get a decent used car for 5 grand.
2) You don’t care about warranties if you get a decent running car for 5 grand
3) new cars are an absolute waste of money whose value drops like a rock the second you leave the dealer lot.
Perhaps in the coming months I can scoop up a few at auction and start a turo business. Great vid as usual! The private equity look looks good on you. 👊🏻👊🏻
Marko, just came here to tell you that I dig that Patagonia sweater vest. I am now going to purchase one because of you for the office. Patagonia stock about to booooom!
My brother has a higher payment than his house on a Chevy Tahoe !!!!!!! Crazy.
Crazy. Those don’t last very long either.
I'll just keep my 15 yo paid for Corolla. Crazy people pay $1000 a month to have a car. And I actually made $500k last year. No way I would ever pay that kind of money for a depreciating asset.
Not everyone has the same game plan. People have the right to enjoy THEIR money. You only live once.
Dave Ramsey impersonation at the end was gold!
CONGRATS ON THE KID!!
Thank you!
i like to buy my cars from private sellers and finding cars that have been owned by one owner and have taken care of it. Clean title, good maintenance and pay in cash even if it's older than 10 years. Use the carfax and take it to a mechanic before you buy it.
same!
Thank you
You're welcome
Congratulations on the baby!
Thank you so much 😀
Marko, thanks so much! Can't believe those numbers 😬 We were planning to buy a new car but we will wait.
90 months for paying a car... 😮 That's like a 100 year mortgage
Happy to help!
That Dave Ramsey arms-crossed impression is spot on 😂
Congratulations on the new upcoming baby girl. Bless your family.
Thank you! You too!
Marko, if you haven't already heard it there's a good episode by Planet Money called "Three Sides Of A Car Loan". The three different perspectives are that of the salesman, the driver, and the repo man. I think we're at an inflection point right now; if there's any hiccup to low-income borrowers source of (already low) income, then auto delinquencies are going to shoot through the roof. It'd be interesting to see if any publicly trade repo companies start to see an uptick. $PRAA?
Yeah, that is. Ninety months term is outrageous. At that point, it would unless to even get the loan. It make no sense.
Everyone usually boasting about buying their 2010 Toyota Corolla for cash on these investment forums, and this might not be practical for many of people who have needs (kids) or just want to enjoy life while still being financially responsible. As Marco has mentioned, use your common sense. If you do not want to buy a car in cash, and want to have a nicer car, look what financing options you have (something less than inflation). Also consider putting down enough money, not only to lower your monthly payment but also making sure you are not going under water and your loan always stays lower than the value of your new car. Enjoy life and be financially responsible!
Value content always..
Imagine borrowing tens of thousands of dollars and paying four-figure monthly payments for a rapidly depreciating asset
In all fairness, not everything you buy has to be an appreciating asset. Whats the point of making money, if you can't also enjoy it. Personally, I pay $3k a mo in autoloans and dont regret a single thing.
@@secretysecret1551 with 3k a month I’d fly out every weekend, and live the life of who your paying 3k a month to.
@@Coolruiz19 well that would be to several car companies, but thats kind of the point, spend money on what makes you happy (within reason)
But the stoplight! How else can you look 😎
@@secretysecret1551 Unless your net worth is high, that is not cool and is silly. You will regret it later in life.