The rise of the scammy car loan
The rise of the scammy car loan
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I recommend that anyone buying a car that they'll have to finance bring in a laptop with an amortization schedule up and ready to go to the dealership. Dealers don't want to talk about the total cost of the car. They only want to talk in monthly payments. They'll sometimes offer cashback in order to get you to agree to a higher interest rate. If you don't have an amortization schedule handy, you're not going to be able to do that math and figure out if you're getting a good deal or getting scammed.
If you don't know what an amortization schedule is, then Google it and play around with one before you go in to buy a car. You only need to plug in a few variables - purchase price, number of months for the loan, and interest rate. That will allow you to see your monthly payment and what you're paying in interest.
If you can't do that simple thing, then don't finance a car.
you don't even need a laptop for that nowadays; you can pull up such a thing directly on your phone.
True, but in my experience a laptop forced you to take your time a bit and see the bigger picture. Also it lets the dealer know that you are not fucking around.
I knew this big clunky ass gaming laptop would come in handy someday. The RGB lights really communicate that I'm no man to be trifled with
Hell yeah. You see a man with RGB and you know he means business.
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Probably the most valuable thing I learned in school was how to build amortization schedules. I've used it on vehicles, student debt, and mortgage. It's really helped me win the "stop paying unnecessary interest to others" game.
Same here. I've forgotten probably 90% of what I learned in school, but amortization schedules have stuck with me because they're such a necessary part of life.
In response to an article about how poor people are trapped by loans… you recommend that? Really?
Absolutely. Did you read the article? The people interviewed explicitly say that they don't know anything about interest rates and how financing works. One guy had a 75% interest rate because he apparently had no idea what that meant he would be paying , which is several times the price of the car.
If you're going to finance a car, you need to arm yourself with the tools to figure out what that is going to cost you. Go in prepared. Don't count on the dealer telling you the numbers, because they are not on your side. They are trying to hide that information from you to get you to agree to something for their benefit.
Poor uneducated people are being oppressed by corporate shills... Best you got it "learn the rules of the game: basically?
You're oddly hostile for a post where I offered advice. Obviously we'd be better off if there were strong protections in place. No one is arguing otherwise. I offered practical advice that you and your loved ones should follow to protect yourselves and you act like I'm saying the system is perfect and nothing should change.
If you posted an article about people were dying in car crashes and I said to make sure you wear a seatbelt, you're acting as if I said we shouldn't continue to try to make travel safer. Wear a seatbelt! And make sure you know how finance works before taking out a loan.
Educating people is a lot easier than fixing the system. No reason we can’t try to do both.
Saying “educating people is a lot easier than fixing the system” is not as easy as actually educating people. Telling people on lemmy to build an amortization schedule is like pissing in a lake of piss. We’re a bunch of frugal nerds.
What exactly would an effective system to educate people on loans look like in the US? Either all 50 states would have to agree to mandate financial literacy in every school or the federal Department of Education would. Then each school has to adopt the policy and make sure teachers are equipped to teach while having a benchmark/test to show it’s effective. That brings in a private company to develop the test and education material. Then you have schools who can barely hang on to teachers that are qualified enough to teach. Some districts are at the point where they just need warm bodies to be babysitters.
So let’s say we develop a robust financial literacy program in all US schools. Say Biden’s Education Secretary makes it their agenda and 50 states agree to take this on and mandate it for their public schools. That still leaves massive gaps in our system. Anyone older than the initial cohort will be at a disadvantage. Anyone from a non-English speaking background or is mentally handicapped will be at a disadvantage. You’d need edge cases to educate them.
So tell me is it really, truly easier to educate people and fix the problem that way? Or would it be easier to pass policy that prevents or mitigates predatory lending behavior in the first place? In an ideal world we would have both!
I know Lemmy users hate being told they are wrong so go ahead and downvote me. It’s not like I’ve spent a third of my life working with the government and studying policy or anything.
I suppose I simple wasn’t pedantic enough for you- posting a comment educating people and trying to fix the system are not mutually exclusive.
You’re not wrong, you’re just arguing against a point you made up and doing so like a prick.
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Sorry you’re getting downvoted, OP. Sometimes it not worth the effort to reply here. Too many people think they are better than others.
I think the advice is really “at least google it before signing a contract”.
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Well I don’t disagree but if those protections aren’t in place then it’s up to the consumer to protect themself.
That's something the gov't is supposed to mandate because businesses don't give a shit. They're only there to make money for the corporate bosses and investors.
Caveat emptor is not a universal mantra everyone knows or understands.
I mean the government hasn't put up any protections yet. I support them putting up protections. Until they do, someone's providing actual advice of what to do instead of crying, getting scammed, or not buying a car.
And what would be better recommendations for the poor individuals trapped by loans?
Regulatory reform? Not “just go buy a laptop and study amortization before you buy”.
Yeah, that sounds reasonable in the long run (years), while the laptop plan is more immediately useful.
Yes, telling poor people to buy laptops is so practical