American consumers are increasingly underwater on their car loans

kjclow

Top Post Dawg
Joined
Apr 26, 2003
Location
Charlotte, NC
TDI
2010 JSW TDI silver and black. 2017 Ram Ecodiesel dark red with brown and beige interior.
(And the story totally avoids the "why are these people trading in these cars?" question; are they doing it to buy an older cheaper car, which would be the prudent financial move? One thinks not.)
My youngest and her husband have done that twice now. He bought a Taco for work and then his work give him a taco. They traded that in on a CRV at a lower value than the taco was worth. After he quit his job for something different, they sold the CRV and got an older beater Nissan. Nothing but issues with that one and it now sits dead in their driveway. They had to pick out something else so they can get to work every day. I think it is a stripped Rav4.
 

d24tdi

Veteran Member
Joined
Jan 6, 2019
Location
MT
TDI
BHW x3, BEW x2, ALH x2, AHU, 1Z, AFB, AKN, BCZ, BDH
Was talking to a guy the other day who (to his credit) drives a Chevy beater pickup and is pretty smart with his money.

But his wife drives a ~5yo Ford Explorer, nice model with EcoBoost etc, that they had a loan on. His wife's comment was that since the Ford is now almost paid off, it was probably time for them to start thinking about what new car they should trade it in for. Didn't seem to occur to her that they could just keep driving the car, which they have taken good care of, and find something else to do with those hundreds of dollars a month that was being paid on a rapidly depreciating asset.

It seems some folks just can't imagine what life would be like without a car loan. Whereas for me, and seemingly quite a few folks on here, I can't imagine ever signing on to one.... Why?

I guess a lot of it probably has to do with the fact that to many folks, the features in new cars are extremely appealing. Adaptive cruise, huge screens, backup cameras, Apple CarPlay built in. They're willing to make the financial sacrifice to have these "upgrades". To me, not only are those things worthless, I would pay NOT to have them. You couldn't put me in a new Tesla even if you paid me to drive it. But for "normal" folks, living with an old car is a misery that makes them feel poor, rather than a pleasure or a relief....

And I guess it's worth us here remembering that for many folks, an old car ("old" meaning anything over a few years of age, but most importantly, outside of warranty) means trouble -- intolerable risk that could keep them from getting to work or school. My old car breaks down? No big deal, I know I can fix it, and in the meantime there are others. Worst case they're worthless anyway, if I need to move on. OTOH, if it's someone's only form of transportation and they don't even know how to open the hood or check the tires, as is the case for many folks that are busy living their lives..... Different situation. In that scenario a broken car leading to a big unplanned bill and/or the loss of the vehicle for repairs for a while is one of the biggest nightmares out there. Worth it to them to pay the hundreds a month I guess if it makes them sleep easier. (Though on a 7yr loan, you're paying on an old car anyway as @Mozambiquer noted..... that really makes no sense)
 
Last edited:

P2B

Top Post Dawg
Joined
Jan 11, 2006
Location
Toronto & Muskoka, Canada
TDI
2002 Jetta, 2003 Jetta, 2003 Jetta Wagon
It costs us less than two grand in insurance etc. per year to run an extra MK4 that's only needed if one of the others is out of commission. Well worth it. I might switch it for a cheap pickup if I can find one, would be handy to have.
 

IndigoBlueWagon

TDIClub Enthusiast, Principal IDParts, Vendor , w/
Joined
Aug 16, 2004
Location
South of Boston
TDI
'97 Passat, '99.5 Golf, '02 Jetta Wagon, '15 GSW
When I bought IBW I did take out a loan, because it was at 0.9% for two years and I got an additional $500 off the price of the car. Paid it off in 2004, and except for briefly leasing my GSW (So I could get the $8,500 rebate), I haven't had a car loan since. There are a few (very few) cars out there right now that interest me, but most of them are over $60K and there's no way I'm spending that on a car.
 

Dannyboy

Veteran Member
Joined
May 25, 2013
Location
Mb
TDI
2014
Bought my 2014 Jetta brand new during dieselgate in December 2015 on a car loan. First and last loan ever. So many hidden charges. If I'd known then what I know now I would have told they to go poke it! $18k turned into $29k after all said and done. Paid it off after 3 and half years saving about $7k
 

Mozambiquer

Vendor , w/Business number
Joined
Mar 21, 2015
Location
Versailles Missouri
TDI
2004 VW Touareg V10 TDI, 2012 Audi Q7 V6 TDI, 1998 VW Jetta TDI. 1982 VW Rabbit pickup, 2001 VW Jetta TDI, 2005 VW Passat wagon TDI X3, 2001 VW golf TDI, 1980 VW rabbit pickup,
One of my customers who had a nice CJAA Jetta had the DMF start to rattle and traded it in on a Jeep, because the Jetta was going to be a "money pit" Well, they are probably in for a bit of a shock with new chrysler Jeep garbage...
 

gearheadgrrrl

Veteran Member
Joined
Dec 15, 2002
Location
Buffalo Ridge (southwest Minnesota)
TDI
'15 Golf DSG, '13 JSW DSG surrendered to VW, '03 Golf 2 door manual
There's actually a company out there that tracks loan payment schedules and payoffs, when you pay off your loan they notify dealers that subscribe to their service so they can target you.
 

kjclow

Top Post Dawg
Joined
Apr 26, 2003
Location
Charlotte, NC
TDI
2010 JSW TDI silver and black. 2017 Ram Ecodiesel dark red with brown and beige interior.
I'm still getting those target letters for my 2000 beetle that I traded in on the JSW in March of 2010.
 

ezshift5

Veteran Member
Joined
Sep 2, 2003
Location
West Coast
TDI
2013 JSW TDI (Enroute BB).......2017 Jetta 1.4 turbo 5M ....................
I sure agree on the above ("troubling trend")................

I've noticed the staggering amount of new cars around here - 400 miles due North of Los Angeles.


ez
 

bigsexyTDI

Veteran Member
Joined
Sep 28, 2005
Location
Kentucky
TDI
'98 NB, '04 Jetta
Mitsubishi Mirage (OK, this one is probably the WORST car I've ever experienced... ever... but still, it was affordable).
It genuinely hurts my soul that you of all people can't appreciate the Mirage for the pure simple perfection that it is... I absolutely adore mine.

I bet you drove a CVT unit... the manual is the only way (obvs)
 

oilhammer

Certified Volkswagen Nut & Vendor
Joined
Dec 11, 2001
Location
outside St Louis, MO
TDI
There are just too many to list....
90% of its issues were from the CVT, you are correct. However, the Mirage, just like the Spark and so many others, were CVT-only towards the end, so there was no choice. You're the only person I've ever seen even mention a Mirage with a manual. I've never seen one.

Our shop Prius died (shocker... coolant in #2 cylinder) so we've been cursed with an older 1.2L Spark with the CVT, and while it is awful, I think it still drives better than the Mirage does. If it had a third pedal, it would be a hoot around town. It has great steering, great brakes, and despite its diminutive size, fits my bulky body just fine. But the CVT just totally sucks the life out of it. It's really sad.
 

Mozambiquer

Vendor , w/Business number
Joined
Mar 21, 2015
Location
Versailles Missouri
TDI
2004 VW Touareg V10 TDI, 2012 Audi Q7 V6 TDI, 1998 VW Jetta TDI. 1982 VW Rabbit pickup, 2001 VW Jetta TDI, 2005 VW Passat wagon TDI X3, 2001 VW golf TDI, 1980 VW rabbit pickup,
90% of its issues were from the CVT, you are correct. However, the Mirage, just like the Spark and so many others, were CVT-only towards the end, so there was no choice. You're the only person I've ever seen even mention a Mirage with a manual. I've never seen one.

Our shop Prius died (shocker... coolant in #2 cylinder) so we've been cursed with an older 1.2L Spark with the CVT, and while it is awful, I think it still drives better than the Mirage does. If it had a third pedal, it would be a hoot around town. It has great steering, great brakes, and despite its diminutive size, fits my bulky body just fine. But the CVT just totally sucks the life out of it. It's really sad.
I drove a manual spark rental car in South Africa. While it was absolutely gutless with the 1.0 liter 3 cylinder they had there, it was also kinda fun to drive...
 

Nuje

Top Post Dawg
Joined
Feb 11, 2005
Location
Island near Vancouver
TDI
2002 Golf 6MT; 2015 Sportwagen 6MT; 2016 A3 e-tron 6DSG
My youngest and her husband have done that twice now. He bought a Taco for work and then his work give him a taco. They traded that in on a CRV at a lower value than the taco was worth. After he quit his job for something different, they sold the CRV and got an older beater Nissan. Nothing but issues with that one and it now sits dead in their driveway. They had to pick out something else so they can get to work every day. I think it is a stripped Rav4.
I'd conjecture that this is the proverbial exception that proves the rule. ;)
 

Nuje

Top Post Dawg
Joined
Feb 11, 2005
Location
Island near Vancouver
TDI
2002 Golf 6MT; 2015 Sportwagen 6MT; 2016 A3 e-tron 6DSG
It costs us less than two grand in insurance etc. per year to run an extra MK4
Ok - I thought our insurance in BC was high, but $2K for a 20yr old Mk4?! Ouch!
I just renewed on my 2002, and even with $3M liability, underinsured, comprehensive, etc. etc., it was like $750.
 

gearheadgrrrl

Veteran Member
Joined
Dec 15, 2002
Location
Buffalo Ridge (southwest Minnesota)
TDI
'15 Golf DSG, '13 JSW DSG surrendered to VW, '03 Golf 2 door manual
I'm still getting those target letters for my 2000 beetle that I traded in on the JSW in March of 2010.
Yup, some dealers don't know when to quit! But most simply haven't wisened up to my once a decade or so purchasing cadence, and quit bothering me several years before I might actually give them some business. But the dealer that actually asked me to test drive the Golf R last week has me wondering... Haven't heard a peep outa them. They got my name and address from running a copy of my DL, All they have to do is input that to VW's CRM database and they'll have e-mail addresses and I think my blog URL too.
 

bart_dood

Well-known member
Joined
Oct 17, 2012
Location
Martinez, California
TDI
2006 VW tdi PD/BEW 5spd manual
The best way to take money from someone is to hide the true cost and play smoke and mirrors tricks to make them believe they either aren't paying for it, or only paying a token amount.

I think healthcare is a good example, USA spends roughly twice as much per person on healthcare than Switzerland....a country that is so expensive a slice of pizza is something like $30 US...

But ask an average American if their healthcare costs are out of control and they will probably explain how they have insurance and the insurance company pays it, all smoke and mirrors

One of my friends (who is pretty broke) just got a new iPhone. I asked her "aren't they expensive?" She said "nah it's just a small bump on my monthly payment"...
 
Last edited:

TurboABA

Top Post Dawg
Joined
Jul 24, 2010
Location
Kitchener, ON
TDI
RIP-2010 Jetta 6spd 2014 Touareg Execline '14 A6 Technik S-line
I have soooo many things I want to comment on.... no idea where to start.... or patience to ***** and moan about it all....
Someone mention Jeeps? Wife just called me about her '17 JC Ltd. that was getting an oil change.... needs lower BJs at slightly over 100k km on odo...
Jeep wants $1224 to put NAPA BJs on it :rolleyes:
Insurance? I wanna puke just thinking about it... I need to pay my renewal next week... $3400 (I need to check if these TDIs are exotics or something) 🤮 Insurance in Onterrible is a scam.
Never ending loans, new vehicles, $100k+ trucks, etc.... I can't even....
 
Last edited:

dieseldonato

Veteran Member
Joined
Mar 10, 2023
Location
Us
TDI
2001 jetta
The best way to take money from someone is to hide the true cost and play smoke and mirrors tricks to make them believe they either aren't paying for it, or only paying a token amount.

I think healthcare is a good example, USA spends roughly twice as much per person on healthcare than Switzerland....a country that is so expensive a slice of pizza is something like $30 US...

But ask an average American if their healthcare costs are out of control and they will probably explain how they have insurance and the insurance company pays it, all smoke and mirrors

One of my friends (who is pretty broke) just got a new iPhone. I asked her "aren't they expensive?" She said "nah it's just a small bump on my monthly payment"...
You haven't talked to the right people about insurance then. Insurance here used to be great. it's flat out garbage now, and you pay threw the teeth for it. We just got smacked with an enhanced and normal thing for insurance last year. It's another scheme on the in network/ out of network, except it's all with approved drs/hospitals that are all in network. Company says "its better coverage." But they are full of it. Never got so many bills from the Dr's in my life. Oh, the deductible went up again too. Funny every year more and more comes off my check, I pay more and more out of pocket and get worse and worse coverage. Nearly makes me miss working for the township.
 

gearheadgrrrl

Veteran Member
Joined
Dec 15, 2002
Location
Buffalo Ridge (southwest Minnesota)
TDI
'15 Golf DSG, '13 JSW DSG surrendered to VW, '03 Golf 2 door manual
In the US unless you work for a big employer you have no bargaining power and get stuck with overpriced "insurance in name only". I was able to retire at 55 because as a "fed" I could keep my group insurance for less than $100 a month 'til I turned 65 and was eligible for Medicare. A lot of folks that farm get a job with the government or a big company just for the affordable insurance or buy through the ACA pools.
 

dieseldonato

Veteran Member
Joined
Mar 10, 2023
Location
Us
TDI
2001 jetta
The company i currently work for is "self insured" high mark manages it. There no bargaining with them.
The short Stent i had at the township, the insurance was great, but also came in at $1600.00 a month for the family plan. That was a lot to choke, making $20 hr. but I never once paid anything out of pocket, even for prescriptions. My wife had a lot of issues leading up to the birth of my son, so I was thankful we had good insurance. Some of those bills would have left us broke for life.
Which I firmly believe is part of the issue. There zero reason for the high cost of medical care.
 

TurboABA

Top Post Dawg
Joined
Jul 24, 2010
Location
Kitchener, ON
TDI
RIP-2010 Jetta 6spd 2014 Touareg Execline '14 A6 Technik S-line
Oh wait.... I got a story for you guys on the insurance thing too....
So, last Dec, me and the wife went to Miami for a getaway..... she ended up getting sick and I had to take her to emerg on xmas eve.... she was there for roughly 4hrs... got some tests done, blood work, supplements and an IV if I recall correctly. Was released and we were advised to see the family doctor for a followup in 24hrs, so we ended out trip prematurely and jumped on a plane, to fly back and go to our local (covered) doctors\hospitals xmas day.

Bill for those 4 hrs in emerg.... ~$10k.
I have travel\medical\whatever insurance through work.... been fighting with them and the hospital ever since... we are now over 10 months in, and I'm being threatened with being sent to collections because the bill still isn't paid.....

Insurance is an unregulated scam just about any time you need it.... just about anywhere! :mad:
 

IndigoBlueWagon

TDIClub Enthusiast, Principal IDParts, Vendor , w/
Joined
Aug 16, 2004
Location
South of Boston
TDI
'97 Passat, '99.5 Golf, '02 Jetta Wagon, '15 GSW
For years I've said that insurance is the largest or second largest expense for most families. Sometimes it costs more than housing. Health, homeowners, auto, life, disability, a liability umbrella if you need it...add it up sometime. It's not pretty.

I did discover one benefit to becoming a senior citizen: My auto premiums dropped dramatically. I have liablity only (with an umbrella) for three cars, the two others have full coverage. Total premium is around $1,300/year. Not too shabby. Another benefit to owning old cars.
 
Last edited:

oilhammer

Certified Volkswagen Nut & Vendor
Joined
Dec 11, 2001
Location
outside St Louis, MO
TDI
There are just too many to list....
My Dad said the same thing about being a "senior citizen", until he got past that, and his insurance went UP. :D
 

dieseldonato

Veteran Member
Joined
Mar 10, 2023
Location
Us
TDI
2001 jetta
My insurance went up this past renewal. Was paying ~$1400 year, on 4 vehicles. Liability, uninsured/ under insured motorist coverage and some sort of over under medical coverage. Limited tort. I dropped my 73 f250 off the policy, I haven't driven it on the road in the past 2 years. Got the new bill and it's up to ~$1600.00 for the same coverage just 3 vehicles. I've never been in an accident, never made a claim, neither had my wife. Insurance guy just basically said everyone's rates are going up. Whenever I get time I gotta shop around again. Going on 15 years with this company, which has all my insurance and all they do is jack the price every few years.
 

kjclow

Top Post Dawg
Joined
Apr 26, 2003
Location
Charlotte, NC
TDI
2010 JSW TDI silver and black. 2017 Ram Ecodiesel dark red with brown and beige interior.
Oh wait.... I got a story for you guys on the insurance thing too....
So, last Dec, me and the wife went to Miami for a getaway..... she ended up getting sick and I had to take her to emerg on xmas eve.... she was there for roughly 4hrs... got some tests done, blood work, supplements and an IV if I recall correctly. Was released and we were advised to see the family doctor for a followup in 24hrs, so we ended out trip prematurely and jumped on a plane, to fly back and go to our local (covered) doctors\hospitals xmas day.

Bill for those 4 hrs in emerg.... ~$10k.
I have travel\medical\whatever insurance through work.... been fighting with them and the hospital ever since... we are now over 10 months in, and I'm being threatened with being sent to collections because the bill still isn't paid.....

Insurance is an unregulated scam just about any time you need it.... just about anywhere! :mad:
Good luck on the fight. When I had my stroke and heart surgery, my insurance charged $200 for the emergency room visit since I was released and not admitted. Yes, I was released from that emergency room to the ambulance and transported to the main hospital. They main hospital had a neuro ICU. Took about 6 months to get that charge reversed.
 

kjclow

Top Post Dawg
Joined
Apr 26, 2003
Location
Charlotte, NC
TDI
2010 JSW TDI silver and black. 2017 Ram Ecodiesel dark red with brown and beige interior.
My insurance went up this past renewal. Was paying ~$1400 year, on 4 vehicles. Liability, uninsured/ under insured motorist coverage and some sort of over under medical coverage. Limited tort. I dropped my 73 f250 off the policy, I haven't driven it on the road in the past 2 years. Got the new bill and it's up to ~$1600.00 for the same coverage just 3 vehicles. I've never been in an accident, never made a claim, neither had my wife. Insurance guy just basically said everyone's rates are going up. Whenever I get time I gotta shop around again. Going on 15 years with this company, which has all my insurance and all they do is jack the price every few years.
I ended up with Progressive last year since Nationwide almost doubled my car insurance with no explanation. New insurance is about the same cost as my old policy with slightly better coverage. Changing homeowners made up most of the difference since the value of my home has gone through the roof over the last 4-5 years.
 

Mozambiquer

Vendor , w/Business number
Joined
Mar 21, 2015
Location
Versailles Missouri
TDI
2004 VW Touareg V10 TDI, 2012 Audi Q7 V6 TDI, 1998 VW Jetta TDI. 1982 VW Rabbit pickup, 2001 VW Jetta TDI, 2005 VW Passat wagon TDI X3, 2001 VW golf TDI, 1980 VW rabbit pickup,
For years I've said that insurance is the largest or second largest expense for most families. Sometimes it costs more than housing. Health, homeowners, auto, life, disability, a liability umbrella if you need it...add it up sometime. It's not pretty.

I did discover one benefit to becoming a senior citizen: My auto premiums dropped dramatically. I have liablity only (with an umbrella) for three cars, the two others have full coverage. Total premium is around $1,300/year. Not too shabby. Another benefit to owning old cars.
The area makes a difference though, my insurance is $900 a year for two vehicles, I am 30 and my wife is 29. Liability and roadside on both.
 
Top