Car Debt | America's Largest Addiction
HTML-код
- Опубликовано: 26 июл 2022
- Help grow this channel with just TWO cups of coffee a month:
Private Discord: www.calebhammer.com/discord
Patreon: / calebhammer
RUclips membership: / @calebhammer
Do you want to be in a Financial Audit and you're in the Austin area? Email castingcalebhammer@gmail.com
Private 1-on-1 consultation: calebhammer.as.me/
Want a free $5? Sign up for Acorns using my link: share.acorns.com/calebhammerc...
_______________________
My socials: linktr.ee/calebhammer
My filming equipment:
Camera: amzn.to/3OqHkG5
SD storage: amzn.to/3OaimKD
Tripod: amzn.to/3ObsaEn
Microphone system: amzn.to/3ObIYeq
Lighting: amzn.to/3REor4Z
Teleprompter: amzn.to/3OaiLN9
USB C SD card reader: amzn.to/3PAq02m
_______________________
Sources:
www.bankrate.com/insurance/ca...
www.npr.org/2022/07/02/110910...
www.lendingtree.com/auto/debt...
uspirg.org/feature/usp/drivin....
www.jobted.com/salary
• Going Bankrupt | The C...
www.creditrepair.com/blog/fin...
wallethacks.com/average-media....
www.townfairtire.com/blog/how...
en.wikipedia.org/wiki/1950s_A...
www.nbcnews.com/business/cons...
www.bloomberg.com/news/articl....
www.thezebra.com/resources/re...
www.thebalance.com/what-is-th...
*Disclaimer: neither this video, nor any content produced by Caleb Hammer should ever be considered investing advice or official financial advice. All content is made for entertainment and educational purposes*
_______________________
Give this video a like and leave ANY comment below so that RUclips recommends this video to more people. Subscribe and stick around for more. Thanks!
What do you think? Are American's obsessed with cars in such a way that always perpetuates aggressive and bad debt?
My best guess would be a sense of freedom, I personally would like to drive around town in a tuned out car, but for now my 2004 red minivan will have to do.
@@dylanbendure4285 Nothing wrong with an older car and saving up to buy what you want in cash later!!
I have worked with people that treated their cars like a phone. Once they were done paying off the loan, they would look for a new car. They never gave a reasonable explanation. It's always like "it's time for a new one".
our infrastructure is built for cars. other countries have great public transport and healthcare.
People want to look good in the eyes of friends and complete strangers. As if they actually care lol.
The creeping length of auto loans and dealers actively selling people on “what monthly payment are you looking for?” instead of the overall total cost of the vehicle are honestly a little horrific.
Absolutely horrific
Yep, it always best to not be a "monthly payment" consumer as it will quickly get you into financial trouble.
Totally agree - we need to teach people to negotiate on the “out the door” price philosophy.
This is true but it's mostly due to lack of financial literacy. You'd think that anyone who passed the 6th grade would know to put their payment in a calculator × the number of months to get the total amount payable but nope...😅
It's just one of the more expensive subscription services for a lot of people, but the opportunity cost of doing that your whole life will cost them dearly in retirement
It comes down to mindset. Fiscally responsible people ask "How much?" Broke people as "How much per month and how much down?"
Giving up on what my car looks like was one of the most financially liberating things I've ever done.
Well duh shud be common sense
@@hhjhj393 clown
@@hhjhj393 by that logic. Do not live in a house. Give it to the homeless and leave. Watch ur privilege
I look at my truck and think damn. That whiskey sent gives it some character to lie to myself to not buy another vehicle 🤣
@@brianj1r144 I LOVE my 13yo truck. Hoping to get 20 put of her
To make matters worse, when i was searching for cars, the salespeople KEPT TRYING to steer the convo to be about monthly payments whenever I would try to negotiate the full price.
When I grew fed up and told them IM PAYING IN CASH - I DONT NEED TO BORROW ANYTHING....They tried to convince me to JUST take the loan because it was "safer"..."what if something happens and you need that money?" - I have an emergency fund already, but thanks for your concern.
If you are weak-willed, even if you walk in with the best intentions to be responsible they will social engineer you into making decisions that you weren't planning on... DO NOT FOLD.
(I walked from 3 dealerships until I found one to stop wasting my time....and 3 weeks later, 2 of them called me back...wondering if i was still interested and willing to agree to my terms. NOPE.)
They make money off of financing you, so they always push for it.
You have to realize they are out to sell you a loan, not a car. Buying the car is a means to that end. They're not stupid.
When I bought my car in cash I still had to sit through the finance option lecture It was a waste of time, even they said it. They said it was company policy even when people pay cash. In Australia btw.
Use the fact they get a kick back on financing to your advantage. You can negotiate a better deal if you play that card, "if i use your financing, ill pay X , out the door with your dealerfees, before taxes"
The issue with car loans is that you don’t realize how much a car costs. If you pay it up front you feel the pain when a car costs 30k and you’re more likely to look for a cheaper option.
Car guy here, and I would NEVER consider taking on a auto loan now. The fact that dealers can up-charge whatever they want and hide behind the “good luck finding one somewhere else” attitude combined with the length of the loans now is sickening.
Ill keep my early 00’s shitboxes.
Its always blown me away how much money people who don't even like to drive will spend on a car.
Gotta look fresh for the ladies
I don't have a license or car. Never did
@@noveleden some places in the country absolutely require a vehicle to function on a daily basis. I think people that live in the middle of big cities don't understand that because they are close to everything need/do.
@@user-ek5nl1jc4b Great news.
i was always taught to buy used no matter what, never finance a depreciating asset, that's a liability.
My main issue with car loans is that people grow accustomed to always having one, so the moment they pay off their car they just turn around and sell it and buy a new toy. Instead of just sitting on the paid off car for another 5-10 years and saving the money they used previously on the car loan.
VERY TRUE
I never understood how people get used to car notes, once I paid mine off I felt FREE (mind you, mine was only $330, lol).
Totally agree!
Yes. If people will just accept a 5-10 year old cash car instead of a new to 5 year old financed car, you would save enough over your life to nearly retire ($492k after 40 years invested at 6 percent above inflation buying a 10k car every year instead of financing a $20k car). These are conservative numbers.
Years ago I went to the dealer with my GF to get her car serviced and they tried to sell her a new car and my GF just couldn't understand how a nicer car was only going to be like 60 bucks a month more than her current payment… uh because your current loan has like a year left and the new loan will have 6 years left..
I’ve only ever owned 90s Hondas and I can’t see myself driving anything else for a long time. They are dirt cheap to buy, maintain and drive. Plus I actually love them and are fun to drive.
I went to buy a car and was extremely frustrated when the starting questions was “what is the maximum monthly payment you can afford” when I specifically said I’m looking for a car for X dollars. I left that dealerships and never looked back.
Commercial lender here. I’ve been in the credit analysis/commercial lending side of banking for over 6 years now, and I can say that most high net worth clientele don’t drive the most expensive cars. I typically see nicer cars (with huge payments hiding on the credit reports) to lower net worth individuals. Actual wealth is more important than the *appearance* of wealth. Way to spread the word! 👏🏻 great video.
Very true if its a status symbol but if they use that car as a hobby its differnt, ie going to car shows, the track and such.
The rich stay rich by acting like their poor. And the poor stay poor by acting like their rich.
@@lucasw2880 I agree I still wear cloths from when I was 16. I really only spend money on my hobbies. I blame my grandfather for getting me into cars and racing. But yeah if you spend more than what the stock market average 7% a year. A more realistic number to spend is 1 or 2% to keep up with inflation and taxes and if you have the money managed by a good company thats another 1.5%. However thats if you just live off stocks like me.
@@lucasw2880most people who are actually balling out buy a nice car.
@@Corgiking521 When your making $1M / year and your buying an $80,000 car that's fine. But when you make $50k / year and your buying an $80k car, that is not fine.
I think some people are obsessed with looking good in front of everyone’s eyes even if they’re financially struggling behind closed doors. You said it, it adds value to their status, specially among those ppl who lack financial knowledge.
yuppppp 100%
Impress people you don’t even like
New vehicles are the biggest drain on wealth. Even if you paid all cash, it is still a depreciable asset that requires maintenance, fuel, registration and insurance. You should only pay cash for a car based on 10% of your annual income.
@@pinnedit By buying shit you don't need, with money from a job you hate.
@@EdwardAndersen My 2003 E55 AMG is very reliable, the new mercedes’ are Junk and unreliable and are hard to work on, the 2003 is easier to maintain
As a car guy who makes tons of sacrifices for his car....these people are insane. I have a 2003 s2000 I bought for 10.5k 8 years ago and it's reliable sporty and plenty of space for groceries. I've never had an auto loan. These people act like they are entitled to brand new cars when a 200g civic or Camry will always do
100% right, I bought an $8k car about 5 years ago after my mom talked me out of buying a $40k car (thank god for that) it’s been paid off for about 4 years and I don’t even want another car because honestly I hate payments. It baffles me when someone pays off their car and then a couple a months later they land themselves in another auto loan, screw that.
If baffles you but you didn’t do it because of the advice and pressure from mom. Lol. This comment gave me a headache
I had never heard about financing a down payment either. I didn’t know that was possible! I’m definitely staying with my current car as long as possible. Loving these videos ! Thank you.
SAME, and thank you so much :)
It almost seems like something like that should be illegal... the down payment is supposed to be money you actually have lol
That was definitely a buy here pay here note lot that can make shit like that up. No real dealership would do that.
Lol and don't forget people finance in the SALES TAXES too… lol I didn't know that was a thing until a had a friend that is always getting new cars and I said don't you get sick of paying all those sales taxes…. "oh we just finance that in"…
You can finance a down payment on anything even a house as long as you have access to another source of credit. They average person should probably not due it but it’s definitely an option especially if the loan is cheap.
The first time I heard somebody talk about rolling "negative equity" from their 3 year old car to their new car my mind was blown. How agressively you can screw up your finances in the US is astounding.
Even worse, rolling the negative equity on their current car loan, into a LEASE on a new car!🤣
So over the lease term, you pay off the negative equity on your old car, the depreciation on the car your driving, and have NOTHING at the end...🤔
There is a big car leasing outfit in my area that advertises that all the time.
Yeah it’s all up to the individual to decide.
They call it the "my money my choice" freedom. But when they screwed up their own finance they cry for help. There's no responsibility enforced.
My sister in law did this. She bought a car and less than a year she decided she wanted a better model.
I had several friends in HIGH SCHOOL do this. I can only imagine how that affected their finances 😖
I remember when I was 21 and about to finance 30k on an expensive car because I wanted it but my father told me to stop being an idiot and convinced me away from doing it. It feels so much better to have a less expensive car but no car debt. I even had student loans, was still in college, and still thought financing an expensive car was a good idea 😂
At least you learned. I always knew financing a car was a scam, especially when I saw how my buddy went from being able to play games and hang out all the time to constantly having to hussle to pay his car every month. Told myself I'd never finance, then I got a good job and was making consistent income and convinced myself I needed a newer car so as to not look broke and financed a used civic for $15k...then I lost my job 3 months later...I will never finance a car again. Thankfully I did a 5 year finance instead of 7 but yeah, terrible decision. Moral of the story is even if you got money or make money to finance, don't do it.
Meanwhile my idiot mom is urging me to finance a car I can't afford when I've been saying a used car is a much better deal lmfao.
You have a great dad.
@@AE-pv9vc Thank you
Got to love dads!
Cars and houses are the two things people use to outwardly try and project their “wealth” or level of income and success yet are the two things that they also can’t afford, eventually default on, and keeps them relatively poor in the long run.
it is so satisfying to be absolutely debt free... and don't worry about how old your car or phone is
I bet!
I could only safely say that about an old Toyota or Honda, with few outliers. And a phone may be forced due to planned obsolescence through software updates being a thing
@@inconspicuous7464 I couldn't agree more. If you have a GM and you want it to last sell it and get a toyota or Honda even if you have to downgrade. Also avoid Nissan with their awful Jatco Cvt transmissions.
@@MSG685I have a 2004 Saturn Ion sedan with a 2.2ltr ecotec with 275,000 miles and purs like a kitten. So not all GM cars are bad. Ive had this car for over 11yrs now. Cheap to work on and plenty of parts to choose from.
@@ddemier older Gm products were much better then the modern ones. I had a 94 Pontiac Bonneville that went 189,000 miles before trading it in with no problems. I replaced the a/c compressor at about 140,000 and possibly a starter. I also had a well maintained 09 Cadillac Cts and that thing was crap, everything broke. The 3.6L engine is majorly flawed and it is in most of their cars.
I think Americans are obsessed with looking rich with these new cars. If you can't even afford the down payment, you shouldn't buy the car!!! Stop borrowing against your future earnings!!!!
Two years ago I bought a Toyota Corolla 2010 with just under 100,000 miles for $6500 cash. Basically no repairs have been needed on it besides typical maintenance. Now I’ve got about 125,000 miles on it and it’s running great.
I didnt even know financing a down payment was a thing. The pricing of vehicles has gone absolutely bonkers now. I bought a minivan before COVID started for just under $10k. But now the cheapest I can find in a 100 mile radius is $20k, with most being over $30k. It's completely insane.
I remember buying my first car at 26 years old and then Getting it repossessed 1 year later. BEST THING THAT EVER HAPPENED TO ME. It made me realize that when you can’t afford something. Don’t buy it. I change my ways of handling money for the better. Now almost a decade later I’m better than 95% of the people i know.
@@franklin23st you must be fun at parties
What happen once your car was repossesed? Did it destroy your credit? Or affect your ability to buy a home? I’ve heard it doesn’t matter but idk
@@PeaceeTV_ I'm pretty sure it fucks your credit for a few years as defaulting on any loan will. If you plan to buy a house with a loan as 99% of people do, probably don't plan on going broke for 7 years or something prior. If you just never pay off any loans and don't mind people taking stuff from you or not being able to get loans then I guess it doesn't matter. There are people that buy things like houses without a loan. Usually not great houses but they fix it.
A lot of people in the US are financially irresponsible and are more concerned about status and perception than their financial future.
this is a huge pert of the problem
@@saidtheblueknight I feel like the key is to find a balance. I can definitely cut back on some hobbies to keep more of my money but if all I did was work and not enjoy life I would lose my shit.
@@ag11b69 right most people would. Pay yourself first.
Young people's expectations of what a car should be today is so much higher than when I got my first car in the late 1980s. My first car was brand new, but it had nothing in it. No power windows, no power locks, no AC, no airbags or ABS. Not even a tachometer and you had to pull up the antennae manually, LOL. Had to install an after-market stereo.
Not to mention the fact that finances aren't taught in USA schools, I went to those public schools that offered free lunches and I don't ever remember finances being brought up, just basic math problems. I took a finance class in college but honestly everything just went over my head. I'm doing my own research and reading books on finances after finishing college because last thing I want in life is to make financial mistakes that will make my life harder unless I make the right financial choices.
We have paid cash for used cars ever since we got married. It has been a HUGE part of our financial stability. When I hear about how much people pay monthly for their cars it staggers me. I have no clue how they can make their books balance with such a huge drain.
Cars definitely are a staple part of the U.S, that is for certain. I like how you mentioned in the later part of the video that the U.S is a car-dependent country, except for people living in the few cities that are walkable and have mixed-use scenarios. Not Just Bikes and City Beautiful are RUclips channels that talk about this more in detail and I wouldn't be surprised if you got this from they do! While cars are pretty much essential in our lives here in America, I hope it can be at a point where we don't necessarily rely on them anymore 10-20 years from now.
I live in Michigan so a lot of this is spot on. Most people here spend more on their car payment than their mortgage. You see so many people who live in trailer parks or crappy apartments but you’d better believe they’ve got a sleek Dodge Charger sitting in the driveway. It’s so stupid. They’re handicapping their financial future for a status symbol. These people will be poor forever.
I’m in Michigan too and see this a lot. Live in a beat up trailer and their car costs more than their home
There is a lot of truth in what you wrote.
A sleek Dodge charger 😆
Sad thing is, they won't even make memories with that car. It's just a shiny toy.
I'm on Detroit's east side. Got
I was born and raised in Vienna Austria where you can easily get by on public transportation and your yearly cost is $500. I moved to the U.S. and started selling cars and often saw +$800/month and +70 month car loans. It's absolutely asinine. Imagine how much more money you would have and be able to save if your car loans weren't bleeding you dry. But hey....at least you look cool.
I wish it was as easy to get around without a car where I’m from.
Not really looking cool either. Whenever I see a nice a car I think what an idiot. I get tempted to sell them something also since I know thier a sucker.
There is a lot of truth in what you wrote
@@jamisonmunn9215 You have no right to judge people on what they drive. There are people who have the money to buy an expensive car, and there are other people who just enjoy nice cars and don't spend money anywhere else in order to afford them. Just because you don't care doesn't mean that you can criticize someone else for driving something they enjoy.
@@top10cars2 you shouldn't encourage people to financially ruin their lives. Its people like you that allow these predatory lenders to keep operating prey on 20 year old college students who are already piling on student debt. Whats another $50k for a car. Is absolutely disgusting, and its not the wealthy I'm talking about or even worried about its the person spending half their income on something which is a glorified dirt bike that you could get for $1,000.
When my wife and I got married we bought a reliable used car for 14k we paid it off in one year, commuted to work together and just made our schedules complement each others, some days I drove some days she drove. In 2020 our neighbor was selling their car we bought it for $2,000, it needed some fixes but it was much cheaper than buying a second car from the dealer. This month we just closed on our home, we were temped many times to buy a new car but we decided to fixed our cars. having a monthly car payment keeps you broke.
That's the way to do it. Good on you both.
Im over here in Pennsylvania and honestly all my friends are currently paying for cars. The world never prepared us for this and neither did our parents. Unfortunately here you NEED a car as soon as you finsh highschool because thats the only transportation here. The car dealers all around this area are like sharks. They know people dont have alot of knowledge on these things and the squeeze us dry. I currently have another 4 years of payments at a 9% interest and its beating me to a bloddy pulp.
Caleb, I have to say, you're such a breath of fresh air in the finance youtube space. I really enjoy seeing the "realness" of the financial status of the average american and the common mistakes they get in to. It's finally putting life into the numbers we see. Keep it up! love your videos!!
Thank you so much!! I really appreciate that, Edrian!
Absolutely! And it shows what a productive conversation about money can look like.
Last month I finally paid of my car loan! One of the stupidest financial decisions I’ve made. Those dealerships really push people to buy cars despite it not being the smartest decision.
I bought a 15,000 Nissan Sentra while only making 15 dollars an hour at my internship. My initial interest rate was 12%!! Got it down to 1.7% when I refinanced and learned how to increase my credit score!
Little 19 year old me did not know anything!
Thankfully it worked out for me as I now make much more money and am really frugal, but I’m afraid a lot of people get stuck with big car loans they don’t understand.
Plus when you add gas, insurance, registration, and maintenance the monthly bill to own a car is MUCH higher than you expect.
I agree with you - we have a huge problem with this!
Well congratulations 🙌🏾
I'm so glad to hear you paid it off!! UGH, at 19??! Those salesmen are WILD
12 percent!?
Do you have any advice to avoid anything sneaky from salesman? I don't want to ever risk getting a car only to end up paying more than I can chew... I don't have a car license now but one day when I finally get one, I want to be careful with my car choice.
@@paolaanimator Just don't buy anything you can't afford. If you can't pay it off in 2-3 years then you can't afford it.
I really appreciate Caleb acknowledging that girl living with her parents was a good choice for saving money. Apparently living with your parents is shamed upon in the US as if we didn’t have enough financial problems to begin with.
I do that and drive an old car, it does have an effect on my self esteem thats undeniable but then I look at the digits in my savings and it makes it better :)
Not exactly. What’s shamed is living off of your parents. I lived at home through college up until I was about to get married (a year before I graduated). But, I was paying for my education, saving money, being the minimum financial burden on my parents I could be. What’s shamed, is kids living with mom and dad blowing money on stupid stuff cause their living expenses are being offset by mom and dad.
It takes a lot of discipline for me to stay content with my current truck. The only thing stopping me from getting a bigger truck, Mustang/Miata, and a commuter is the lack of a place to keep them. Yea, I'm definitely in the pool of people addicted to car debt.
That truck is probably a piece of shit
@@jvees7916 It's a new-ish Ranger. It does everything I need, amost everything I want. Comfortable and quiet on the freeway. Tows well. Great offroad. But a small bed and bad gas mileage. Good car, good truck, just not the best at either.
I financed my first car 4 years ago when I was 22. It was a 20k car at a 3% interest rate. My payment was only $350. But I saved up 8k and paid it off early a month ago. I don’t plan on financing a car again unless I absolutely have to. These rates and prices are through the roof
Nice!! That's awesome Aaron!!
Same here bro 20k car took it out sept 2020 original payment was $300 4% interestbut I gave $500-$550 a month finished paying off the remainder in Jan 2023
Avoiding buying a car as a college student for as long as possible. I'm lucky I can walk to class/work and take public transport to grocery stores.
_"Part of the reason that middle-class Americans look back so fondly on their college years is that it is the only time that many of them will ever live in anything resembling a walkable, mixed-use neighborhood with transit."_
@@TheRealE.B. that’s a really good point
I bought a 5k car that I still drive daily 3 years later.
I take the train ($7 round-trip)only 2 days a week for about $56 a month and then take the bus which is free with a train ticket to get to campus. Heard that they raised the parking permits to $330 per semester but that doesn’t include the cost of gas which most people commute from at least an hour away so I'm just chilling while saving tons of money. My parents are mad that I don’t want to buy a car but it’s way too expensive because you need to throw away all of your money just to take care of the damn thing such as insurance, maintenance, monthly payments...it's just too much right now.
Rode a bike until I could afford a car cash. Never had a car payment
Just now found this one. I’m used to the financial audit, but this one was a gem! Keep going my man
Thank you, Caleb. I've been driving my 2010 Subaru with 159k miles for 4 years, bought it for 8k cash in 2019 with 135k miles. Recently, I've been thinking of getting a newer car...thinking I could handle a car payment and deluding myself that I "deserve it". Since finding your videos, I'm so thankful that I don't have a car note hanging over my head and will continue to drive my beat-up Subaru for as long as I possibly can. My financial score is still probably only a 2/10 but at least I don't have car debt!
We were in the new car mentality for years. We were paying $1k/month for 2 vehicles. We hustled and paid them off early and now only pay cash. Yes, it’s harder than signing on the dotted line for a car. But it’s easier than being strapped to a payment for 5 years. Once we got rid of car payments it changed the game for us to be able to save money for life now and retirement in the future.
Oh wow :(( I'm so glad you guys are on the other side of that now!!
I just paid off my car 2 years early a few months ago. It’s 100x better having money in the bank than a new car. I’ve saved $5000 in 2 months pretty easily between the car payment saved and the money I was using to make extra payments saved. I feel like I sleep better at night having less stress about money!
wooooo!! Congrats, that's amazing :)
@@CalebHammer Thankyou so much!
If you saved 5k in 2 months just buy having paid off your lains thus saving the loan payments, just shows me that you took out insane loans.
@@roarbahamut9866 I had a car loan of $18000 or so with 2 years left on the loan and I just hammered it down working extra and not spending. Wasn’t a smart move buying an expensive car. Lesson learned.
Y’all sound like bots
This was a great video essay. Love to see more of this.
This is an excellent breakdown. I think you're right, a car loan bubble is coming on all the over valued cars from the pandemic supply chain problems.
Yep. Car loans are a huge struggle, especially when you don't have a lot of money in your budget. I do think that "buy a $2000 car" can be disingenuous, though. Often the costs of repair on a car that cheap are harder to plan for and just not worth it. It's often worthwhile at that end to get a smaller loan and get something more reliable in the 5-7k range.
I also wish people were more handy. When I got my last car, like many people, I was very tempted by new cars' modern entertainment systems. With a little technical know-how and some RUclips guidance, I put a $350 head unit into my used car and got the screen with the Android Auto and Apple CarPlay for like half the price of a new car with that built in.
I plan on owning a cheap car in the future. I was thinking about this. What if the used car is in less than ideal condition and therefore more risk at more repairs? I know the tip about getting a cheap car with less mileage but I don't know which car has less mileage. I just want a cheap but reliable car for basic commute in case I need it for work or groceries in the future.
@@paolaanimator Buy a Toyota Camry, insanely reliable and cheap as chips to fix when they do go wrong. Get a mechanic to look over it before you buy one if you're not confident with mechanical stuff, even if they charge you it'll be worth it to avoid a poorly taken care of car that might have big repairs looming.
@@paolaanimator There's plenty of reliable and cheap car brands out there. Honda is fantastic when it comes to reliability and cheap repairs. They also last a very long time.
Most car maintenance and minor repair stuff is just taking things apart and putting them back together in the same order. It's easy. I learned to work on cars from repair manuals but now guarantee (if you have a reasonably common car) there'll be a step by step guide on RUclips. I've never bought a car in 20 years for more than £1000. Drive them until they get so rusty it's not worth repairing or something big breaks that is worth more than the car to fix. Think about this, if you buy a car for £1000 cash and it lasts one year before something breaks, that's only 3 months of what you'd be paying finance, the other 9 months are free.
They should show this video to high school students and break down the mistakes that each person is making. Then go over how each person can make better decisions based on their own financial situation. Schools are tasked with teaching many different things but not financial literacy. One of the things that could change the direction of one’s life.
Schools are too busy teaching wokeness and secs to students now. Why teach useful information to people when it make those people that the establishment is trying to manipulate/control smarter and more independent?
You're so lucky you have no idea. I didn't learn about finances until taking a class in finances late in college and even then everything just went over my head. I'm so grateful at least that I didn't have a car during college since I just took public commute since it's cheaper and having a car in the city would be expensive anyway. I'm picking up books in finances right now to read it in my free time so I can learn finances better now that I finished studying in college.
@@paolaanimator My dad drilled in my head since I could hear, “If you do not have the money don’t buy it.” He said you need one credit card so that you can rent a car. He calls credit cards The devils tool.” I have gotten myself in debt and out of it twice. My goal is to not to go their again. I really wished I had put some money into ETF’s earlier in my life but money is hard to earn and easy to spend. Good luck with your financial journey.
@Russell Phelan lol wow, where have you been at the last 6+ years? Crawl out from under your rock, do a TAD bit of research and see the obvious of what is going on in elementary schools all the way up to universities all over the country. There are literally 1000s of videos and reports showing what is happening on campuses and the mindset of students due to constant pr0p0garbage being pumped into their minds by c0mm1 loving l1bb teachers and these guvment run institutions. Tin foil hats talk conspiracies, I simply spoke facts that ANYONE with an ounce of knowledge in current events is aware of. I can definitely tell you are a normie that only pays attention to what you see on the "news"............
Great idea but they won't. Too many multi- billion dollar industries depend on the financially illiterate.
This hurt my brain. I am a physician. I bought a $35,000 crossover, paid about $5k down and have about $450 payments that were financed for the number of years I plan to own it (about 6 years). I still felt bad about stretching the payments out that long, but I also know I can pay it off if necessary. The only reason I did this was that interest was lower than my house's with no effort on my part.
These folks have a bigger payment on a way more expensive car than I have... and my vehicle has almost every option someone could want and I got it new. What on earth are these folks doing that make less than 15% of what I do?
Its seems you got good deal on the interest.
This sounds like my car payment plan, had low interest. I’m about two payments from paying it all off cause I don’t want any more debt 😋
You literally sound like everyone is the videos haha
@@rs660alec3if your interest is low enough, and you can afford to outright buy the car in cash - it’s fine to make payments. I could afford to buy my new motorcycle for 15k in cash, but I got a great rate and only pay 150 a month on it. why bind up my cash when I can stay on top of the interest? i’ll get it down to 5k and pay it off
I initially thought I got a pretty good deal this year (slightly preowned 2022 vehicle with really good gas mileage) with a $338 monthly payment. This is well below the 15% mark of my take home and got a 72 month loan to get a lower APR since I anticipated paying it off sooner. Since I came across Caleb’s channel like a month ago, I’ve realized that you’re supposed to include ALL vehicle expenses into that 15% and should plan to pay it off in no more than 3 years. Between gas and a high insurance costs, my requires vehicle expenses actually exceed that 15%. Even with paying it off more aggressively, it’ll still take me close to 4 years to get it fully paid off. While I’m happy with my car and plan to drive it into the ground in 20 years+, I definitely wish I had realized all of this before making the purchase
I paid off my car last year and I’m so glad I did. I was sick and tired of the damn payments. When Covid first started and the government was giving out stimulus checks I used all of them to pay off my car faster. I budgeted more a week on top of that to pay it even quicker. It felt amazing to get that title in the mail a week or two later.
After driving cheap old cars (but cool ones!) for years I once got a 15K loan for a newish car. It was nice I guess, but sold it after a year and went back to older ones that I actually owned.
Never had car debt since. Last one I bought was a brand new Alfa Romeo and paid cash.
Financing over 4 years for a car is madness.
I live in an area where, statistically, my household income is more than twice the median. Everywhere I drive, I am surrounded by nicer cars. It's really astonishing that so many people spend such a significant part of their incomes on cars.
Some people live their life driving to different places more than being inside their house. If you use your car more than your home, you would probably make your car more of a priority than your home.
@@row7332 YES! Id rather buy my dream car instead of my dream house. Not only is it cheaper, its more flexible.
@@roarbahamut9866 Yes, but one depreciates dramatically and the other appreciates. It's an ego based decision over a rational one. Few people use their cars more than their home, and those that do should have it paid for by the company that makes them do it.
@@cokebottles6919 Houses are always pitched as an appreciating asset but the truth of the matter is it will always be a liability you never actually own.
those people are secretly loaded
I just moved to Orange County CA and your car is such a status symbol here. I have never felt more self conscious about drive a Carolla (in great condition) but I also wonder how many of these hot shots are in crazy amounts of debt or leasing their cars. It’s not worth going into debt trying to look rich.
Wow that’s wild, I would bet a vast majority of them are in debt up to their eyeballs
Don’t even worry about it. People who live in the OC usually have some money, generational wealth, or are just in overall heavy debt. Don’t even fret. I drive out there all the time with my Corolla too and don’t mind them.
@@heatflowers171 and OC is one of the most expensive cities to live in SoCal , they balling over there
In OC and can confirm
Same here! I always feel poor around them in my Camry!
We see this often now. A friend of ours paid $35K down on a new giant Chevy PU… and the dude still has $800/month payments. Insane.
Yeah it's absurd how high trucks are costing now...getting more normal to see six figure vehicles...
Yikes that's more than I put down on my house.
Love this! Keep speaking the truth. I’m 3 years of out of college and still have never owned a car. Carpooling and public transit go a long way on the east coast
Yeah!! North East has that great transit
Honestly as a car enthusiast, even I don’t understand the fascination with regular people spending their last dime on brand new cars. I am a fresh college graduate and I managed to find a great deal on a used car, insanely low mileage/one owner but fairly old. I love my E39 to death and it may be my forever car. I bought it because it was what I could afford. The idea of taking on debt for a depreciating asset at this point in my life even as someone who loves cars made no sense to me. Why people who don’t really love cars shell out fortunes for fancy ones I will never understand when they’re struggling to afford life as it is. Oh well, guess used car prices are coming down soon
I may not understand finances but I'm trying to understand finances now with the use of the internet. At least I know the best way to buy a car is used, least mileage, good condition for a low price. However seeing the high car prices right now scares me... I don't have a driver's license but I plan on getting one soon in case I need to commute to work in the future (even though I prefer remote work so I can stay home with my family and save some money). I want to buy a home one day, it's a dream of mine and I want to avoid too much loans paying off for a car long term so I can at least start saving up. I'm just a recent college grad looking for remote work to avoid commute in a pandemic era where I know gas prices are high, so I'll have to see how things goes. I've just been sticking to public commute (bus/train).
Well,used prices skyrocketed when a 5 year old car costs more than half of a new one that new one looks like a relatively good deal… especially when you start considering the increased reliability in a culture that requires many of us to have cars just to have a job does have some value.
As a former car enthusiast, i wasted almost 100k on cars since i started driving. Thats a huge chunk of my money gone for nothing. Car enthusiasts arent any better than someone who gets a 30% interest loan.
Both people waste all of their money thinking a big piece of metal will make them happy.
@@rhyse4818 I really don’t think that’s entirely fair. You do not need to spend $100,000 on cars to have fun, I bought mine for less than $7,000 and I’ve put maybe $1,000 of repairs into it and the thing runs perfectly
im driving a E36 '95, ~240k miles, and plan to drive it till it dies lol
This is a great compilation. Until your video, I had never heard of "financing a down payment". I feel like it shouldn't be called a down payment anymore, as it's more of a high interest penalty for being poor. People do need cars, since public transportation is unusable in most cities. But I do wish people had more guidance on choosing a late model, decently running car instead of whatever the salesman convinces them they want. If it's not at least three years old, you're getting fleeced on the cost to value.
Keep up the awesome content! I love your vids! 💜
The whole point of the down payment is to put some equity and prove you won default….
If you finance the down payment its not a down payment. They have commercials for no down payment 🤦🏾♂️
Thank you so much! AND YEAH, IT'S WILD!!
Finance a deposit 😳
Main issue is most people can't get financed on some cars unless they have a considerable amount down.
I lived in the UK till 25, moved to USA. The prices of cars shocked me! I still cycle as much as I can.
The UK has uniquely cheap used cars, probably because there is a much lower export market for them
This looks like it would be such a painful process to go through but so educational. I wish I would have found Caleb’s content sooner.
whats worst is when they finance the deposit. I didnt even think that was possible lol.
Yeah that's wild
I have long said that car debt is killing us much more than credit card debt. It's truly shocking how much car debt people carry.
Very shocking
Even worse that they will roll over negative equity 3-4 times and think nothing of it.
I'm amazed with all these people in these videos who make less than $40k and drive $15k cars. It's terrible.
I drive a $15k car now in my mid 30s but when I made $33k a ear starting out I drove a $3000 car. I drove that car until I was 28. I loved that car too!
@@aarodful I honestly think the 12-15k cars are less expensive on average than the 5k cars. At least if you have low interest rates.
@@MrAustanian it may be. These people are all in other debt though and I don't think they are getting great interest rates. Lol. I haven't heard one of them show their math on how long they plan to keep it and how it's cheaper than an old car. Lol.
In my case my car was pretty reliable. I think I had one major repair in 8 or 10 years and 5 to 8 other $300-$700 repairs over the years. Definately cheaper for me but it's hard to remember all of the costs now.
A 12-15k car can be cheaper over a period of time than many used cars. I haven't seen data but I could believe that. My civic now is pretty cheap to maintain and no issues. Still if you get a good reliable used car around $5 or $6k, it will be cheaper if it's a good model and you maintain it. I would guess. Plus it puts you further from bankruptcy and less leverage when you have a low income.
Love your videos. My car is paid off, now I’m focusing on knocking out my student loans. I’ve been encouraged to get a new car for many reasons, but man, I want to live this no car debt life for as long as I possibly can lol. I’m sticking with it until it gives out
While I hate car payments, it is a necessary evil in some cases. We live in the country with nothing within walking distance, so a car is absolutely a necessity. You could not pay me enough to live in the city. I like my privacy and being away from crowds. Not everyone feels this way and that is perfectly okay. Since I work from home and my husband is provided with a company vehicle we were very selective on how much debt we wanted to go into for a vehicle and made a purchase based on our budget. We did not want to limit our saving potential due to an over priced car. Not everyone looks at their finances before purchasing and that is a huge mistake. Sadly, we live in a society that tries to impress with bigger and better. I taught my children that if someone isn't paying their bills, then that person's opinion does NOT matter. Thankfully they listened to their momma.
Great video! That part about the car payments making saving up for a house down payment is spot on. I fear in 2 generations we will be “renting” everything. Houses, cars, appliances etc. because everyone will be straddled with payments unable to make any headway with savings. People are signing away their economic future to have the best thing right away. We are not raising our children to live that way and I hope channels like yours increase personal finance education for as many as possible.
I fear that too :(((
You will own nothing and be happy
I dread the days of paying $2k for a toaster because people are taking out 30 year loans for them.
these videos have definitely opened my eyes to the horror of auto loans. im "lucky" that i live in one of the better mass transit, walkable areas- NJ/NYC. am also lucky i have been WFH and have no need to drive anywhere.
these videos have been so enlightening to the debts americans undergo just for transit for their jobs. i feel for these people cause they're in a worse off state, TX that has little to no mass transit available. crazy to me how much a car is crucial to them cause for me i can hop on a bus, train, or even get a cheap uber since theres so many around.
Yeah, it is critical here in Austin, and I'm pretty much downtown!
You just have to avoid the shooters and muggers you’ll be fine.
@@pmscalisi oh give me a break. NYC is still very safe and probably safer than where you live. Yes stuff can happen, but it happens everywhere. You’re also more likely to get killed in a car accident than a train accident.
Wow, just came across this channel! Amazing content!
I seriously don't know how people could build any kind of wealth. I guess it's the lack of control on instant gratification and financial education. And advertisements are so powerful. Something looks so nice that would make someone that can't afford it somehow able to buy it.
Literally sold my car last year! I’m depending on public transit now. 😎
I live in downtown Pittsburgh, Pennsylvania and I also work from home. If I go into the office, it’s a 10 min walk or free 5 min train ride. 😊
Paid off my 2014 Corolla just this month after a 6 year loan (bought it in 2016) and i will refuse to buy a new car until I run this car to the ground. I hate car payments and I refuse to get into debt again. Monthly car payments are the worst 😒
WOOO!! Congrats on paying it off!!!
@@CalebHammer thank you 👏🏼👏🏼👏🏼
Currently drive a 05 Honda accord- plan to drive it until it dies! Don’t want a car payment and it is insane how much the prices of vehicles have increased since 2020! Great channel - I have binged the financial audit videos looking forward to the next video!
That's awesome :) and thank you so much!!
Good financial sense but that car is unsafe. Go get something with ESC.
We have the same car (I have a coupe) and I agree! It was my first big girl purchase and I paid it off in 3.5 years and never cared for another car note. However since it’s a coupe, I’m gonna have to give it up when we have a baby in the next 1.5 years, I’m hoping to God that the market is better for car by then.
Old Accords are very good. Even the techs at the Honda service center say that. Mine is a 2008. The tech took me back to where the work was being done and even showed me a 2004 Accord, saying it was in better shape than the newer ones. He also talked about how good the condition of my 2008 Accord was.
Did that with my first car, bought in 2004, it was a 03 dodge stratus sedan, with 14k miles drove it until it did last year 2021 with 245k miles on it, it was one of the best cars i have ever owned. it got 29 mpg up until the day it died. it served me will for 17 years!
My wife and I got caught up in this. We could afford the payment to begin with, but issues arose and we lost the car when I was hurt and out of work (no, we didn't have an emergency fund.) Now we own a car outright and just pay insurance, and we're kicking ourselves for not doing this to begin with
Did it destroy your credit? I’m genuinely asking because I make car payments as well.
@@elonsus9747 like a 50 point hit but there's methods to overcome that relatively quickly.
As someone who is not from the US but has been living here for 5 years now, is incredible to me that if you dont live in a big city, public transportation is horrible. The only bus route in my neighborhood stops service on Saturdays at 6pm! If I wanted to go to walmart I would have to take 2 busses for 40 minutes and then walk another 20 minutes to be able to buy groceries, and then do the same trip back. I soon learnt I needed to get myself a car. But I agree, people get in car debt they can't afford but I can tell this also happens where I'm from but public transportation is not as bad.
Just found this channel and I’m hooked 😂 I’m from Australia and people are addicted to financing shit they cannot afford and playing the victim card shortly after. If you got a brand new car and no stocks , savings or property … you got a problem.
you need more interviews ive watched them all and craving more, you needa do this full time lmao
I definitely want to hear your thoughts on the lack of financial knowledge or education in America! I feel like we all learn finances way too late in life and would be interested in hearing your thoughts on how to improve the cycle
I've often wondered who in their right mind buys a new car, but to find out it's not even rich people, just people in debt is more depressing than I thought.
We’ve been through the longest bull run in history. Loads of people are making large purchases with equity earnings.
@@wyw201 That's a good point and definitely makes more sense in terms of how people are affording them. I'd still question the value proposition of buying a new car even if you have the cash to do so though....
@@Teppishc Given how low interest rates were from 2008 till 2022, I bet most people are financing and leasing new vehicles.
Hey Caleb, just discovered your channel, and binged most of your vids. It's an innovative way to discuss personal finances and hopefully the protagonists learn from it. It also looks like you got the algorithm figured out and i'm glad to be onboard "relatively" early on. Wishing you the best from France !
Thank you so much :) France is my fav country I've ever visited!
In Australia, it’s common to finance 100% of the vehicle plus the closing costs and additions can be added for up to 7 years term
People change cars every 5 years. It's amazing to me how they continue to stay in debt. It's like a normal thing to have a car payment.
That always boggled my mind. How do people get used to paying interest on a depreciating asset? I paid cash for my car 11 years ago. I can't even fathom what it'd be like to have a payment for that long (even if I had new car every few years)!
I love your channel! It’s great watching your followers number grow! Well deserved 👏🏾I pray people incorporate your useful financial information because debt is not worth it
Thank you so much, Jeaninn! You've been subscribed for a week now and I could not have grown without you!
That average car payment is crazy! Haven't needed a car yet so I never knew how much most people spend on their car payments
It's insane!!!
You can find a decent and affordable new car that will not only come with a long warranty, but also ensure your ability to always make it to work. If you cannot afford the car on a 36-month loan, then you cannot afford the car. A decent and reliable new Honda or Toyota can still be had on a 36 month loan - you pay it off early, enjoy the 10 year warranty and knowing you can always get to work, and invest what would have been your monthly payment. Plus car ownership does allow you the freedom to look at more affordable housing options outside city centers which can mean more money in your pocket each month, but that all depends on where you live and work.
Can you help viewers understand the major differences between simple interest and compound interest! Thanks for the work you are doing!
How coincidental this showed up in my feed, right as I made my last payment on a car I bought 3 years ago.
Thank you for bringing up what got us here. A lot of people admonishing Americans on youtube about their car addiction don't mention that mass transit sucks in most places outside of some major metros in the US. There are lobbyists that represent interest groups who are invested in suppressing research and development of more light rail, for example. Big money in government is holding back progress here, and they keep us car dependent.
Also, a lot of youtubers don't live (or stay) where it snows a lot 😅 I've white-knuckled driving a small 20-year-old sedan on the freeway during a sudden snow squall (look it up, it's scary lol) and I would have given anything in that moment to be in even a younger, safer car with AWD. But, AWD costs 💸 it's not always about luxury or status. You're from MI so you get it lol.
Financing a down payment on a depreciating asset is nuts. But I remember people talking about the US car debt problem when I had my clunker a while ago, just with smaller numbers because of current inflation. So this isn't really new. I'm pretty sure we have wage, housing, and education pricing problems that prevent people from being able to save, which then cascades to having terrible auto loan terms, since very few can afford a strong down payment or cash sale.
haha, I feel that... west Michigan is very snowy so I feel the pain haha.
If mass transit sucks, then make the time to be at the stop. Where I am, the buses by my home come every two hours. I just have to wake up extra early to take it to work. If I want to park and ride, I also make the time to get to the park and ride and catch the bus. It all depends on the individual. Back in the mid-eighties, when I visited and stayed with my brother in Santa Clarita (the desert), I would make time for the little bus that came by the hour as well (and this was before the Metrolink!).
@@mariatolentino4516 Where I'm from there is no stop, or you'll be waiting two hours in subzero temperatures but okay you know everyone's situation in the country 🤣🤣🤣
I live in Wisconsin with a lot of snow and get by with just front wheel drive … I have never been stuck in snow. And it was a three year old used car!
Na... you can be car dependent but that doesn't mean you buy a car you can't afford. Find a 5 year old car, take it to a mechanic for a 100 dollar pre sale inspection. They will tell you if is it a solid car. Then buy it. If not, find another one. Rinse and repeat.
Caleb is spot on here. My wife and I are 40 and paid off our home in May 2021. We have only one vehicle that we paid cash for back in 2014 for $7,200 for a 2009 Hyundai Sonata. Yes it’s boring vehicle but it’s reliable. We have two kids and a dog. We haven’t had a car payment since 2008.
I’m expected to get a call From Ford for the new all electric 2023 Ford Lightening here in the next month or so.We plan to pay cash By buying the base model. The upper level trim is double the cost of the base model. It’s ridiculous what auto manufacturers cost for creature comforts and plastic aesthetics.
My grandfather told me. “Cars don’t make your money they take your money.”
I got to say your grandfather saying is out of date now. We live in a car centric society (at least where I am in Texas). Pretty much can’t not have a job without some sort of car. I get getting some used but that taking a gamble it keeps running.
Y’all are some boring people
@danegerous24 wrong- cars depreciate 70% in 7 years. Still taking your money. Doubt you can pay for a new car driving uber eats- not to mention the wear and tear.
Learn this lesson before it costs you...
Congrats- I have a similar ambition. Thay lightening is sweet, but even sweeter without a mortgage!
Hey, Caleb! I love your channel! I’m a car salesman, and would be happy to answer your or anyone else’s questions on the industry. So long as it doesn’t directly relate to my particular manufacture or dealership, as I don’t speak for them.
This video was amazing! ❤ Keep up the good work!
Hey Caleb, I’m in Austin and have been in the car business all my life. Would love to collaborate on a video about how to buy a car and what to avoid when doing so. Time to stop the stealerships.
I almost got a car with 25%! INTEREST I was so dumb thank God for my dad. He took me and the car back the next day and helped me give it back!
This kid really helped me budget my commissary while in jail
So this channel was recently in my recommended. And I agree with all the points you made in this video. Although I was flabbergasted at your private 1- on-1 consultation prices. $400 for 30 minutes and $700 for an hour. Damn.
A Channel about saving money and getting out of debt is charging that much to teach you how to save , the irony 🤣
These long loan terms totally have something to do with the outrageous car prices
$2000 cars don’t exist anymore
One breath away from disaster. Peak credit bubble of all time is popping. Tragic!
Took me till I was 25 to understand it’s completely unacceptable to have a auto loan. I drive a 2007 Toyota FJ Cruiser with 212k miles and I’m happier with that vehicle than I ever would be with a car that comes with a car loan. I taught myself how to work on it too and I don’t want a new car till my net worth is at least a few hundred thousand or a million dollars.
Actually pretty proud to say I’ve never had this issue. Payments were always around $300 or less, I was able to pay them off a year or two early, and when I finally did get a brand new car, I had it all of a year n I just sold it bc I didn’t want the car note. Bought a car less than 10k in cash instead. The credit cards are my Achilles heel 😬😔
I Put a 10% down payment with 6% interest rate on a 3 year payment plan. I managed to pay it off in 2 years 4 months. It was hard but now that it's paid it feels so great. I'm keeping this car for as long as I possibly can
I like your videos very much, it's very interesting and informative even though I am not from the US. Just one suggestion if you don't mind, I think it would attract more views if you actually visualize the data with graph, pie chart, etc. I think it doesn't just make it more visually appearing, but also makes it easier to understand especially for people that are less sensitive to maths.
Thank you Caleb!! 🛻
I actually sold my truck 1 month ago it was my dream truck BUT I got completely out of debt and had 24k in positive equity that filled my emergency fund as well feeling good !
That's amazing :) I'm so happy for you!!
Dude I love your content. Found you on TikTok and have been watching all your videos. If I do need to buy a car when should I? How about a house? Should get it now or should I wait? Interest rates are scary!
Thank you so much!!! The good thing about a home purchase is that you can always refinance at a lower rate later (I mean, you can do this for all loans, but 30-year fixed gives you a lot of time to do so)… big debate on what the housing market is going to do!! But I never try to time the maker.
I always wondered, why can't I just buy a car from the manufacturer at a set price and pay to have it delivered to me for extra? Then the laws preventing this were made aware to me. All for the auto dealers controlling the market. I've been trying to buy a car lately and every option is around 10K above the MSRP because of this middle man garbage.
Car PRICES are insane. Where I live you have to have a vehicle because you have to drive 150 miles to get to anywhere with a competently large hardware store. Personally I drive about 2500 miles a year, but it’s not uncommon for people to drive that a month here if they work elsewhere. A used car doesn’t last long when you run 30k miles a year.
The reason for all this car loan chaos is that we are no longer trained from an early age to imagine the future and the majority of us were raised by people without a plan for us.
It isn't someone else's fault. If you think it is, then spare society your opinions on stuff.