In the spring of 1980....I went in to buy a cheapo car on E-4 pay, and by the time, the dealer did the paperwork....I ended up with a 36 month loan.
Around 1996, I worked with a guy who'd gone to the high side of cars, and ended up in a 60 month loan, which I sat there shaking my head.
At the speed of depreciation...by the end of the 3rd year...the car had lost around 50-percent of value. He was expecting the value to have low maintenance issues....all the way up to six years....which is something I could not imagine (I grew up in the 1960s/1970s and had a totally different view on 'trust' of cars).
By the 2005 era, I now encountered people who were playing the 72-month (6 year) car loan. I thought it was ridiculous to engage in this long-strategy.
In the past year or two....I noticed chatter about 84 month car loans....with the situation involving $60,000 ultimate-loaded vehicles, and some bank thinking they could trust people to pay a 84-month loan back, and not get into repossession.
So you imagine the scenario....Bob buys a $75,000 vehicle and opts to pay over 84 months. Three years into this....Bob loses his job and gets behind on $914 per month payment. Bank takes possession, and what exactly do they have?
Well....at 3 years, the $75k car is probably holding a value of around $38,000, but the bank is on the hook...having a vehicle that they probably can't sell at $38k.
Liquidity crisis coming? Yeah....and those car unions asking for more wages? They will face some reality in the next three years.
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