Here's an article about a couple who got a 7 year car loan. The couple were a little worried about taking on such a long obligation, but they couldn't pass up the offer. They were able to get under $700/month car payments.
The article says that people are no longer just buying more home, but more car as well. The average car loan is now 5 years and many more are written for longer. Also the average amount of car loans has increased 40% to $30k.
So is it the car companies fault? Perhaps they should stop making nice, expensive cars. And perhaps they should stop giving out loans. Or maybe people like the Posts, should step back and consider the debt before just leaping on it.
The couple bought a Ford Truck for $44k. They rolled over $9500 owed on their previous truck which they hadn't paid off into this new truck.
But they aren't the only ones, another woman in the article Cindy Gerhardt did the same thing. Except she has done it with multiple cars, rolling what she owed from each previous car into another successive car. So now she owes at least $15k more than the cars are worth. Her monthly payments are more than her mortgage. And she's unable to sell both cars and get a loan for a single car and the difference she owes.
She says the car dealerships never said no. That they kept giving her loans, I wonder did she ever wonder how she was driving nicer and nicer cars continually? Did she ever wonder how she drove a nicer car than someone who earns 2-3x what she does? I am guessing it just seemed like a normal quality of life for her. She drove cars she thought she could afford, but never stopped to consider if she could.
I wonder do you just see the monthly obligation and think great, I can handle $600. I know we would never be able to buy a car and say great $600. So I don't quite understand how it's so easy for people to do so. And think you can afford your luxury car. If you make $40k/year how do you buy a car that costs more than you make in a year?