Dahon.Steve

From the article:

One out of four -- 25.6% -- of cars that are financed include debt rolled over from a previous vehicle, according to vehicle research site Edmunds.com. By the end of last year, the average amount of negative equity in these deals was more than $4,000>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

I had no idea 1/4 of all motorists are rolling debt from a prior vehicle into new loans! It's insanity that people would rather have negative equity in those deals just to drive anound in a new vehicle!

The reason those motorists don't have any money for a down payment is due to the high cost of motoring in an expensive car they really could not afford in the first place!

Dahon.Steve

From the article:
>>>>>More than 80% of car loans are for terms longer than four years (which, a couple of decades ago, was considered a long loan). The average loan term has grown from just under four years and seven months in 1990 to over five years and four months in 2006. Longer loan terms mean that people build equity in their car more slowly, which in turn means that borrowers will be "upside down" on their vehicles -- owing more than they're worth -- for three years or more on the typical purchase.<<<<<<<

I've see this before and we are seeing for the first time, auto loans between 5 and 7 years. Cars are getting too expensive which is why the lease became so important because the average American cannot pay cash or even have enough for a down payment.

oldguy52

Oh, but wait Steve, it gets worse .......

During this last real estate run up, there were a whole lot of people refinancing their homes and taking that money to buy their cars. That's a 30 Year car loan ! ! I know a few personally who did this. When I asked them what they are thinking, they tried to tell me how smart a move this was. Better to borrow now before the price goes up ..... that kind of thing. Showed 'em what the interest was going to cost for that car over thirty years and watch the color drain right out of their face. Pretty expensive automobiles, those.

JohnBrooking

The number of calendar days into the year at which you've earned the amount that you will spend on your vehicle is 365 * S/A, where S = the amount you will spend and A = your annual salary. For someone earning $30K and paying $8K annually for a car, that's 365 * (8/30) = 365 * 0.2666 = 97 DAYS, more than 3 months!

I was shocked when I calculated recently that I spent over $1K on bikes and related stuff last year! (I'm sure that's cheap compared to some of you! After all, I'm only half car-free.) But even that is higher than normal, since it includes a few new bikes I acquired, which I don't do every year. Yet, even including the new bikes, I've made enough to cover that already this year!

Dahon.Steve

Good one. Keep in mind, you spend the first three months paying for the government so a person making 30K a year starts earning take home money around May or June.

recursive

That thing looks like a pure sprinting machine.

bmike

it needs some xtra wide and long reach brakes and fenders. a rack, some lights. it might be usable as a commuter. 3 speed hub would be helpful too for getting over speed humps. wonder if schwalbe makes a tire that large... maybe the big big big apple...

saraflux

gee, thanks for pointing that out. lol.
now i REALLY hate having to work.
freedom!!!!