Federal Reserve Bank of NY: 7 million people are 90+ behind on car pymt

[rpannier]

This is quite bad. Makes you wonder how many other bills they're unable to pay?
Also reported that 60% of all credit racked up over the past 10 years is in China

http://fortune.com/2019/02/12/americans-late-on-car-payments/

https://www.washingtonpost.com/business/2019/02/12/record-million-americans-are-months-behind-their-car-payments-red-flag-economy/?utm_term=.af8cfb1b9d7c

https://libertystreeteconomics.newyorkfed.org/

[TheBlackAdder]

1. Many get 7-year loans and cars die beforehand or are damaged in natural disasters with ltd insurance

[PoindexterOglethorpe]

2. Yep. A 7 year loan is truly stupid.

People need to understand basic finance, and only buy the car they can afford.

It's my opinion that after your first car, you should NEVER take out a car loan. Here's how it works: You buy a car. You make a down payment, and you take out a loan for the minimal possible time you can afford. When it's paid off, you keep on saving that sum of money. Then, when you need a new car, you've save a whole bunch of money and you have some value in the car you currently own. And that is the sum of money you use to purchase the next car. No loan.

And so on. You keep on saving the equivalent of a car payment each and every month. And you never buy more car than you can pay cash for.

When my younger son was in high school, shortly after his older brother had bought his first car, younger son asked me what was his brother's car payment. Zero, I told him. Your brother paid cash for that car. It was clear from my son's question that this sort of thing was a hot topic among his friends. He was clearly staggered by the notion that someone might pay cash for a car and not have a payment to deal with.

A year or so later when younger son was buying his first car, I explained carefully to him that what he could spend was what he had saved up (over the years we'd made him [and his older brother] put money into a savings account, much of which came from money generous grandparents gave them) and not a penny more. And so we went looking for a car for him. The amount of money was enough to purchase a reasonable reliable used car, and that's what he got.

Which is how everyone should look at a car purchase.

The only time I ever had a car payment myself was for my very first car. I got a loan from my credit union to finance it. The next time I bought a car I had the cash in hand to pay for it, and that's how it's been ever since. It's been a long time since I could afford a new car, but do not feel sorry for me. I'm quite happy with the used cars I've bought in recent decades. The latest was a 2017 Honda Fit that I was able to write a check for. And that's in part because the last time I bought a car was in 2006, a 2004 Honda Civic.

Finance 101.