Advising a friend.

[luv]

Originally Posted by OnTheWarpath58

I've been biting my tongue, but he's right. She ****ed up huge by buying from one of these places, and she's about to make it worse.

Then again, so does anyone else who buys from these lots.

I have a friend who used to work for one of these places, and finally grew a conscience and quit.

They'll keep every dime she's given them, and when she misses a payment, they'll take the car - and legally, there's nothing she can do.

Then they'll turn around and put that car back on their lot and sell it to the next sucker that walks in. These places make money hand over fist selling cars to begin with, and make even more money because in some cases, they sell the same car several times.

Also why they target people with no/bad credit. Higher likelihood they'll get the car back. They get so much money upfront, and charge a buttload on interest.

[Micjones]

Originally Posted by luv

Also why they target people with no/bad credit. Higher likelihood they'll get the car back. They get so much money upfront, and charge a buttload on interest.

It's insane. She's paying roughly $400 a month on this car.
It's almost 8 years old.

[luv]

Originally Posted by Micjones

It's insane. She's paying roughly $400 a month on this car.
It's almost 8 years old.

I'm guessing she might have gone five years on the loan? That's $24K. Even at four years, that's just over $19K. On an eight year old car.

[OnTheWarpath15]

Originally Posted by Micjones

It's insane. She's paying roughly $400 a month on this car.
It's almost 8 years old.

Jesus tapdancing Christ.

I just bought a brand new, $35K car, put no money down, and I'm not paying much more than that.

(Helps to have decent credit and be a smart consumer)

[wazu]

Originally Posted by luv

Also why they target people with no/bad credit. Higher likelihood they'll get the car back. They get so much money upfront, and charge a buttload on interest.

Usually the down payment covers the value of the car. Once they get a single customer to make that payment, they can repossess it over and over again and resell it over and over again for a ridiculous profit margin. Only costs are collection/repossession. They'll do it until the car breaks down and might actually cost them something significant to repair.

[OnTheWarpath15]

Originally Posted by Adam

Usually the down payment covers the value of the car. Once they get a single customer to make that payment, they can repossess it over and over again and resell it over and over again for a ridiculous profit margin. Only costs are collection/repossession. They'll do it until the car breaks down and might actually cost them something significant to repair.

This.

[Mr. Flopnuts]

Originally Posted by Adam

Usually the down payment covers the value of the car. Once they get a single customer to make that payment, they can repossess it over and over again and resell it over and over again for a ridiculous profit margin. Only costs are collection/repossession. They'll do it until the car breaks down and might actually cost them something significant to repair.

Oops. I missed this the first time around. This pretty much sums it all up right here.

[luv]

Just don't offer to cosign.

[BigMeatballDave]

Originally Posted by luv

Just don't offer to cosign.

He won't have to worry about that. Its a Buy Here Pay Here. Which means they finance, not a finance company. Those places will sell anyone a car.

[luv]

Originally Posted by BigChiefDave

He won't have to worry about that. Its a Buy Here Pay Here. Which means they finance, not a finance company. Those places will sell anyone a car.

Yeah, I know. That was my slam on myself. Trying to make a joke.

[Micjones]

That's what I tried to tell her OTWP.

She doesn't have the upper hand here.
They'd be foolish to write a contract in such a way that it gave the buyer an advantage.

[Micjones]

Flops when she tries to get a car from this other dealership won't they see an open car loan and deny her application?

I'm hoping so... That'll be her saving grace.

[Mr. Flopnuts]

Originally Posted by Micjones

Flops when she tries to get a car from this other dealership won't they see an open car loan and deny her application?

I'm hoping so... That'll be her saving grace.

Unfortunately a lot of these buy here pay here places don't run credit reports. It's risk/reward. If they can fleece enough of a down payment, they can always go get the car when she's 1 day late. That's right, legally these places don't have to honor any kind of grace period. Some states require it, I don't know off hand if MO/KS are on the list.

[Saul Good]

Originally Posted by Micjones

Flops when she tries to get a car from this other dealership won't they see an open car loan and deny her application?

I'm hoping so... That'll be her saving grace.

These places don't care. Everybody who walks onto their lot is in the same situation. The worse your credit, the bigger your desperation. Desperate people make stupid financial decisions.

Her credit is so shot that another repo isn't going to make much difference. She needs to scrape together about $1,500 and buy a jalopy with a little life left in it for cash. If she can then save up $300 a month for two years (while putting the other $100 she was spending towards repairs), she can buy a $7,200 car for cash that will last her 5 years. Then she can put $400 a month into investments and have a nice little nest egg.

You don't have to make much to retire a millionaire if you stay away from car payments, credit cards, and whole life insurance.

[Tylerthigpen!1!]

Originally Posted by Saul Good

You don't have to make much to retire a millionaire if you stay away from car payments, credit cards, and whole life insurance.

College kid here. What do you mean by whole life insurance? And do most used car lots run this business model?