Banks SCREWED The Car Market (SCARY DATA)
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- Опубликовано: 26 июл 2024
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Today on the Daily News You Can Use, Ray and Zach discuss auto loan terms and how banks are stretching them out longer and longer. Tune in to learn more! 
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Please come to Canada 🇨🇦 🙏
I was driving from Milbrae CA to Palo Alto on US101 freeway on Sunday July 7 and noticed a large red 'MSRP or Less' banner attached to Toyota101 building in Redwood City.
Using God's name as a curse word.... I'm done with this channel.
Greed killed the car market
Don't buy that overpriced shit, folks.
You are not buying a car. You are going into servitude to the bank and the dealer.
Prices killed car market
Prices and the lack of meaningful wage growth that hasn't kept up with productivity in the past 30 years or so.
Everyone is to blame. From the dealer to the bank especially the consumer for accepting.
I keep hearing from dealers that everything is priced so aggressively but inventory is just sitting and rusting out. I told the dealership if the market was so hot as you make it out to be......why are these "best" deals just sitting for months and months
True. Suckers paid double the prices that the vehicle was worth.
@@mikes2687 The great deals won't start until they knock half off the stickers.
Don't forget the federal regulators that are driving up costs just to offer many vehicles today. Their fuel economy and emissions regulations get more strict every year and at a rate that's so aggressive that cost of powertrain development is astronomical. Everyone complains about how reliability is in the toilet. Part of that is because manufacturers are forced to rush out technologies in order to meet emissions regulations or face massive fines. Vehicle emissions are insanely low today. 99% of consumers would rather have a reliable vehicle than one that emits 3% less but breaks down 30% more often and costs 50% more to repair than the previous model.
You can't really blame the consumer when our cities are built in ways that require cars to get around
Absolutely nothing makes sense in the auto industry today, prices, quality, VALUE, financing, insurance, NOTHING!
$65+ for a new Tacoma TRD Pro. The previous generation of that truck was just $42k and that was back when it was still made in the US.
Banks should have never allowed 84 month loans.. even 96 is starting to become a thing... you are basically underwater on those loans for 75% of the loan term. 60 months with 20% down needs to be the max.
if its 0% financing who cares if its 96 months. i had 72 months for 0% interest on infinity qx60 but i paid off in 2 years. but have to have over 800 credit score
@@angie-xy5sf For one 0% financing is a scam- there's no such thing. That's a "buy down" nobody is lending money for nothing, ever. They just add the interest into the sales price and people think it's 0%.. it's not. And 99% of people who get 84 months make 84 payments. Not sure why you'd pay off "0%" anyway when you can make 5% on your money.. you already pre-paid the interest so you might as well keep the loan around.
@angie-xy5sf I had a 0% loan without knowing my credit score. Guarantee you it was below 800, as the car loan was my first loan outside of a federal student loan and I regularly use 30-90% of my credit card every month. Although I have never paid a cent of credit card interest, late fees, or insufficient funds.
Banks meet the demand, if customers want it the customers get it.
Like Ray is saying…who is to blame? Customers or banks? Customers have a power tool…We can say NO!
I agree, but most people are so dumb
Funny how Ray squeaks when he gets excited. 😂😂😂
I'm here for the rants!
How many can afford a thousand a month, not to mention 1600 a month, these dealers are crazy
I was paying $3000/mo this year to off my car loans. Paid off a 2022 rav4 hybrid in april and a 2020 passat this year in June. Rav4 was on a 48 month note and the passat was on a 72month note.
It's not the dealer.
92 MONTHS ,iSIN'T THAT CALLED DEBT SLAVERY ?
It's your option to sign or not sign for the loan.
Slavery is bad because it's not an option. Stupidity is the word you're looking for.
Mfs act like they need a $100k truck
It's called a collapsing economy.
It is called Indentured servitude.
To add insult to injury, the bank creates the money out of thin air based upon your willingness to sign the document.
*correction the FED invents money then deposits it into the bank for you to borrow.
@@thedude5040 To illustrate, suppose you take out a car loan from a bank for $20,000. The bank does not need to have $20,000 in cash sitting in its vault to lend to you. Instead, it simply creates a $20,000 deposit in your account (or the car dealers account). You can then use this "new money" to buy the car. The bank expects you to repay the $20,000 plus interest over the term of the loan.
In this way, banks are able to create money from thin air when they make loans. This process is known as fractional reserve banking.
72 months is more than long enough, and no normal person should pay more than $500 a month for a car. $400 is really the high sweet spot for a new car.
Gotta thank Ray and Zach for the content. On Friday I just purchased a 2022 Defender - and with the tools available, and being informed on what the market conditions were, I was able to negotiate a $8000 price drop on the listed price ($71k to $63k). I'm also incredibly jealous that you're able to work with your Dad Zach. I wish I could spend more time with my old man.
Now figure in the depreciation...what will the truck be worth after 96 months! The negative equity would be nuts!
Going forward, cars will not deprecate as much as the past
It’s cool. We’re going to bail them out again. They should never have approved loans over value
Yep. Too Big To Fail! The bailout money will of course come with strings attached, by way of making a large percentage of their offerings what the consumer has loudly rejected. They'll again be in trouble a few years later. Rinse & Repeat.
Ray has got to be my favorite “average” person on youtube. His rants are priceless. 😂 👏👏👏
Like I have been saying; just don't buy. You can fix your vehicle you have now.
Correct.
You can also lease from a desperate manufacturer for next to nothing and wait for them to get real with prices and improve tech.
Repair cost are high as well
@ericmaclaurin8525 no thanks. I buy all my cars in cash. I own 4 vehicles now, and couldn't care less about keeping up with the Jones'. If the rest of the car buying public did the same, prices would fall off a cliff.
Best part of having an older car is there's none of that surveillance tech crap installed.
The day is right around the corner when you will never own a vehicle. You will pay monthly for life. The days of owning anything is coming to an end. Companies make money by keeping us in debt for life.
What a dumb statement. You're a fool. Capitalism can't function like that fool.
Not true at all. Many people go under 5 years and their vehicle is paid off and still driving fine.
@@rotart12arx3 you're blind as hell.
"You will own nothing and you will be happy". Klaus Schwab. Founder and Executive Chairman of the World Economic Forum. Agenda 2030.
Man - I love driving my old paid-for cars every day and listening to this channel!
I drive a 2008 Mercury grand marquis and my kids drive my 2018 Toyota Camry. I have no car payments and it is a very good feeling.
That's why I always go with 48 months maximum
LOVE RAY SPEAK TRUTH HURTS DONT BUY
OMG that Camaro story. I would never take a rig like that out for a drive. Even if they wanted me to drive it for a better sense of what’s wrong I’d be terrified.
Dealers are killing themselves slowly. Just got off the phone with another dealer. Was told they bought the truck at auction for 38k plus 3ish for recond, so 41k. Truck books at 38k retail.
They can't even move the truck at 35k....i offered at 29/29 because max trade is 28/29k. They are so screwed i even told the lady.....if you cant sell retail at 35....who is going to buy at auction for 30-35......
I love Ray's sarcasm towards Big manufacturers and car data reporting media. 😂😂😂😂
I was at a Toyota dealership yesterday Monday town and country charlotte NC can you believe that the sales person was denying that the Tundras had a recall he kept flashing the keys of the truck just to never open the truck for me to see it it was a TRD package tundra iforce max version he was really rude and the vehicle was priced at $82k he said the dealer was only offering $1k off MSRP terrible dealership never go there.
Who pays almost 10% on interest rate? That is crazy!
Back in 1996 I payed 8.8%
That's pretty much the state of the market right now. Even people with great credit are having high interest rates right now.
We should see the 40 and 50 year home loan soon too
There are 100 year house loans in Japan. The only way they can afford a house.
But you can write off taxes & interest on a home loan in the US.
@@805private9lol only poor people think writing off interest is an advantage
You preach on Ray
GREED killed them all. GREED is NOT good.
The term rates on mortgages are doing the same thing. First it was 20 years, then 30 years, now some banks are doing 40 year mortgages! Absolutely insane.
Banks and bank execs getting rich. What's new???
92 months is wild.
It's actually 96
@@rrpence21 haha even worse.
@@rrpence21well there are 2 leap days in that 96 months. So.. 96 months and 2 days?
Works on house payment as well. Look at 15 year versus 30 year financing. Scary numbers!
Negotiateed a Camry down $2455 off MSRP. $12.000 total down. 4.5% 60 months $420. Plus insurance- fuel. Maintenance & cleaning. Its crazy expensive.
You say prices won’t come down but at these unaffordable prices I don’t see how they can’t come down. When the mass majority of the population can’t afford these prices eventually these vehicles won’t sell anymore.
Ray, I love it when you rip it hard! Keep it up!
I would do that if i drove nowhere, had a $100 payment, and after the 8 years, it would only have 10k on it. It would be worth something more than a paperweight or scrap metal.😂😂😂😂
Some of these car loans are expressed in simple interest however, many banks use the rule of seven eights, and charge most of the interest upfront on the loan and less interest at the tail end
😊
$20k just in interest for a truck is insane lol
Inflation is not price increases but really an expansion of money supply. Longer loans and mortgages are effectively that expansion - inflation - that always leads to higher prices. Utterly nuts 🥜!
Yea but the problem is that expansion of money supply never seems to increase most working class peoples wages.
It's my understanding that luxury cars depreciate faster because a) the new car buyers don't want to hang on to them and b) they are expensive to maintain and repair, so they will be due for high cost items sooner.
Getting close to boat loan terms of 10 to 20 years.
The age of $8k to $12k riding lawn mowers. People are sniffing glue.
I had a 2008 Mazda 3 that cost $18K and I paid 60 payments. That car lasted 13 years in Western NY salt, had 230,000 miles, and no major problems. It still had original starter and alternator, spark plugs changed once. after 100,000 miles I started changing the oil after it burnt a quart, which took 15,000 miles.
The "no money down" part mystifies me. The minimum down payment was 20% forever. When did this change?
AFAIK, it was never a bank "rule". It was, however, the way most disciplined/responsible banks did business.
Millenial here. I'm not aware of a time when 20% was a requirement or even a soft suggestion must be a relic of the 80s
@@thedude5040 Did not say it was a requirement. It most definitely was (and is, in my view) the dividing line between someone who qualified for a decent loan versus someone who was so flaky, they would barely qualify for a usurious interest rate subprime loan. With zero down, you start out radically upside down and stay upside down for the duration. Zero down is a deal for someone who failed at math and desperately wants something shiny..
@@yelapa999 I was offered a 0% loan with nothing down.
@@yelapa999 I got a zero % loan and did not have to put anything down. I put $2000 down just because it felt weird not to do so.
72 months shouldn’t be your base case. That ought to be 36 months. We shouldn’t be complicit in normalizing this idiocy.
I worked for a mortgage company back in 2004-2005 and even back then they were just starting to roll out 100-year mortgages for property in California and NY because property values were so high in those markets the average person couldn't afford the monthly payments of a 30-year loan at the interest rates at the time. It's similar to how vehicle prices are so high now, the average person can't afford the monthly payments.
To whoever is buying these Vehicles: Please stop agreeing to these prices and terms, it’s the only way to end this madness
Absolutely amazing god bless this company for giving awesome information!
NO! Dealers screwed the car market!
96 is to long
I'm 75, so a new car is out of the question. The old vehicle I'm driving is looking better every day..I just need to find a good jaguar machine.
I don’t understand your comment, makes no sense?
There is no such thing as a good Jaguar.
You need a safe and slow car. But age has nothing to do if you can afford a car, but poor planning does.
@@elainehaney1636 Elaine that is one of the stupidest posts I have ever seen 😖😖😖😖🥲🥲😖😖😖
All things considered, you can take A LOT of Lyft rides for $100k +.. How long is it gonna take before people figure out how little they need a car in their driveway?
Banks just want more of your money.
Actually the problem is banks don't need your money. So it has to be alot of money to get their attention.
Car prices will drop during the depression and auto inventory will be liquidated during their going out of business.
A garage owner blew my head gasket, he came screaming around the corner revving the hell out of it when I arrived to pick up the car.
Correction, cars do Appreciate. YOU just have to wait until they have fully depreciated and become classics and appreciate in Value. Such as my 66' Pontiac, my 69' Pontiac and 67-72 Chevy trucks and Blazers have gone insane in prices!
I love when you guy's break down the payment numbers
Banks should only finance 80% of MSRP. If the dealer wants to charge a markup, sell the customer extended warranties and key insurance, and the state tax, license and title all that needs to be cash from the customer. If the dealer sells the car below MSRP like how the market worked all the decades before the 2020's then that could allow a customer to have a smaller down payment.
Really the longest car loan you should get is 48 months. Most warranties are 48 months and not good to be making payments on a car while on the hook for costly repairs (since I can't go to Autozone and spend $250 for the Holley 4-barrel like I could when I owned a 1970 Cutlass Supreme in 1992) is just asking for the repo man.
If the banks and dealers want to finance a 10 year old POS for 50k (120% LTV) over 84 months at 17% to someone with a 580 credit score then they deserve to eat the loss... you did not see the repo coming?
I have a pretty basic 2004 Chevy Silverado 2500 WT, I have the original signed paperwork with the title, I believe it costed around 20K back then. If you use an inflation calculator on it, then it should cost just over 33K. A similar truck today would cost over $46K.
I come here to watch Ray lose his shit and go off the deep end. Love it and love you guys. Ray is quickly becoming the Jimminy Glick of the car industry. Great show fellas thank you.
Another 5 years at this pace and you'll see 15 year loan terms for automobiles, a loan term that was common for housing not too long ago.
Best thing I have learned over my years? Never finance a car beyond the warranty period. Once it's paid off, unless it's a collector item, or an old workhorse that's cheapo to fix, punt it and be done with it. Paying off a loan on an old broken down p.o.s? Catch yourself on, folks...
Simple banks are run by people, dealerships run by people and buyers are people. All selfish and greedy.
I got some decent deals in Feb/March. I actually bought two pre- owned vehicles. I got a 22 loaded BMW X3 for $33K and 16K miles and 2 plus years left of warranty. That is $20k of depreciation vs a new one. The car has been flawless. I also bought a late 21 Honda Passport for $28K and 18K miles. This falls in line with a "far" deal, but better than paying $44K for a new one. Folks, there are deals out there. Do your research and stick to your guns.
Thank you ray for making the customer responsible for writing the loan not the banks or dealers. These are not dealer problems. When money was free. We all all all financed f150 and Silverado when we should have had rav4 and ford rangers. Customers issue here
Oh good, I love it when Ray tells us a story.
I just bought a vehicle and financed for 120 months. This was approved based on lifetime maintenance and lifetime warranty through a franchise dealership.
Love it when Ray says “Ventner, New Jersey”
"Ventnor City, New Jersey." Just think about a Monopoly game board. Ray's on the yellow property. :o)
@@NVRAMboi and picks the car as his token!
Are people desperate. Throwing away their wealth like this. Spending around $15000 a year on a vehicle. I spend $1200. Ridiculous!
This proves that schools do not teach basic personal financing.
LMFAO
You aren't paying more interest because the extra money comes off the principle and the interest is accrued annually based on what you still owe on the loan. So the idea of doing a 72 month loan and paying extra while you can would work. But to be honest with you, it's better to get a cheaper car instead of something you might not be able to afford. Or keep your money and repair the vehicle you already own. I swear that a large amount of people buying new cars.....DONT NEED THEM.
I dont want to pay for 6 months
That’s what they said about Carvana going bankrupt, they are now at $130+, lies lies
These car notes are more than I pay for my house, no way in hell I’m paying that much for 1 car, 2 I could understand and that has to include the insurance. Do these genius banks not see they are setting people up for failure? These people won’t be back in the market for at least 5 years.
Then you must have an older mortgage payment. The property taxes on my first house I built in 2021 alone is about $650/mo. It's just a ranch style house, 5bed 3bath. Because of the water shortage my water bill is often in the $300-$600/mo range
@@thedude5040my mortgage is only $730. And I have 2 paid off cars and 0 credit card debt. Only debt is mortgage. People can be debt free if they stop buying stupidly priced vehicles.
@@thedude5040 2018 and refinanced after that. Paying what they want for these new vehicles is just plain dumb, even dumber if anyone pays over MSRP because that’s just lost money, plus they pay interest on lost money on top of a depreciating item.
@@stevenbesson8988 I paid above market price on a brand new 2022 rav4 hybrid. Paid off the car loan 18 months later
Think you can afford that new car? Do this: Estimate your OTD price, then estimate your monthly payment. Then contact your insurer to find out what your monthly insure premiums would be, if you bought it. So, if your "proposed" new car payment would be $700/mo. and insurance would be $200/mo., your total outlay would be $900/mo. If your current car payment is $450/mo. and insurance is $125/mo, that totals to $575/mo. Simply, save the difference between the "proposed" $900/mo. & your current payment of $575/mo. and put the difference ($325/mo.) in a savings account, for a few months. If there is no change, to your lifestyle, you may be able to afford the new car. But, if not...
Once a person no longer has to pick one of two needed items on what to buy they no longer have a sense of what is affordable.
There is a story out there of a Ford Tech damaging a ladies Escape on a test drive and then just towing it in and parking it. It was not driveable. When she came to get it the dealer said since it was other drivers fault they werent responsible and she would have to contact her own insurance. After a few weeks of getting nowhere she called a local TV station and they did a report on it. Surprise! These jerkoffs were now more than happy to help. Another layer of hateable added on.
The audio is a split second behind the video....freaky-deeky! ☺
I try to do no more than 36
Months and I look for interest deals. Just bought a 24 Mustang Ecoboost Premium Convertible. 10% off msrp, 36 mos, 1.9% interest.
Not sure if matters, but with work truck you can deduct appreciate
No one can afford a car, a motorcycle, or a house with these ridiculous prices. I think everyone should live with what they have for a few years and see what happens. Even if you put a couple grand in your current car every year, it's still cheaper than a payment.
Go get em Ray!!!!😂😂😂😂😂
If wages hadn’t been in steady buying power decline since the 1970’s the current high interest rates wouldn’t be as impactful. Real wages haven’t kept pace and employees willingly accept lower buying power.
The length reflects the gross inflation and price gouging that is the norm. Prices have way outstripped income growth.
I guess I just don’t have the stomach to finance a vehicle in full without down payment anymore.
Can’t believe these numbers are even being considered
I just bought a 2024 outback. I wound up putting 2 thirds of the cost as the down payment and used their 2.9 percent finance promotion for 48 months. That brought my payments down to @230 a month. And my thoughts was to either make additional principal payments or at a point just pay off the entire loan early (they said there was no prepayment penalty)
Anything I missed in my decision to do this?
The car market killed the car market. The manufacturers and dealers did this.
I understand people need a mode of transportation but we need to stop buying everything unless it is 100% necessary. Houses, cars, entertainment and restaurants. Let them know we won’t buy if they want to drain our wallets. Decrease demand and prices will fall.
I enjoy your programs! You both seem so sweet! Good for you!❤😊❤😊
Instant gratification, worry about it at the end of the road, you might not live that long, but you probably will.
Never change Ray
Even better,,, save $1000 a month for 24 months...
That works out too a $24.000 down payment... then take out a 24 month loan for the rest...
Save save save in all catagories
I was falling asleep until Ray woke me up.
This was as crazy as an 72?month loan was 10 years ago. Then the 84 came out. People need to realize what they are doing to their wealth by financing these depreciating assets. Sad. I’ve got an 11 year old Corolla and 10 year old Tundra. Already know exactly when the Corolla is going and that is in 5 years and tundra in 7. When I bought them the plan was 12 years. Decided to pay house off first and save cash for two new ones
I'm keeping my paid off 2017 honda accord and my 2001 jeep cherokee. And bank what i would have paid on a car note. This is simply crazy.
Add Tesla to the list of automakers fudging sales numbers
You would have to buy the gap insurance. Wreck and total out that truck at 120k miles and let your auto insurance and gap insurance take care of the loan so can come out above the water...
It would be interesting to include average depreciation for each of the vehicles considered. How much does each vehicle depreciate during the life of each loan term? It seems there could be a sweet spot of financing calculated based on such an algorithm.