Yikes! Amazing to think this is legal in our country.
Why? No different than most credit cards. Its not like it isnt explained in excruciating detail on the finance contract.
You can only do so much to save people from themselves.
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Iieska Packard of Fresno, a 43-year-old licensed vocational nurse, was at her company office last year when a colleague asked, āIsnāt that your car getting towed?ā Packard raced down the stairs and out the door, but it was too late. Her 2017 Lincoln MKX was gone.
When Packard bought the vehicle, she put down $2,000 on a purchase price of $21,285, including sales tax and fees. She financed the rest through the dealer with a six-year loan bearing an annual interest rate of 26.2% ā even higher than the average 9% to 20% rate that subprime car buyers face, according to the Consumer Financial Protection Bureau.
The sales contract showed Packardās financing charges over the term of the loan totaling $19,561 ā more than the original principal borrowed.
I actually think there is a valid question in @mankuās post. What are interest rates like in other countries, and what kind of ālifeā does the āaverageā person have in those countries?
I have no idea how accurate this data is, but itās a rather interesting table:
https://www.financialadvisory.com/world-credit-card-rates.html
Of the countries listed, the US is the only one which shows a range of ~3.5x btw the lowest and highest interest rate; in fact, itās one of the few countries that shows a range at all.
I know/have worked w/ people who have varying degrees of financial literacy. Yes, there is only so much you can do to save people from themselves. But there is a valid question of whether the US is particularly bad among industrialized nations about allowing people to hang themselves.
JMHO.
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Damn writer donāt know Tax Title License is usually over 2k, so she put less down than TTL
Vocational nurse canāt do simple mathematics? I feel worse for her patients then herā¦
Can she convert lbs to kgs and calculate a dosage appropriately? Yes the computer does all that for you, maybe thatās the problemā¦
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I know Iām being overly pedantic, but, assuming a āvocational nurseā is what I know as an āLVN,ā LVNs donāt actually administer meds. I actually donāt think itās super common outside of ICU settings for nurses to do the calcs for med administration, actually.
Back to the topicā¦ 
As a licensed pharmacist you could probably talk circles around me in that department, but the core issue is that this country has a severe lack of financial literacy. Itās not taught in school, and when it is taught - people donāt pay attention out of the idea āwhen am I going to use thisā.
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I couldnāt agree more. There is āeasyā access to credit. If youāve received pre-approval letters in the mail from credit card or finance companies, youāll understand what I mean.
āPackard, a mother of two, says her credit was hurt after she fell behind on student loans and medical bills.ā
I do feel bad for her in this case, but did she really need to go out and get a 2017 Lincoln?
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Financial illiteracy does not mean we should allow predatory lending, be it with credit cards or auto loans.
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When you say WE, who are you referring to? The consumer or lawmakers? (I am not trying to bring politics into this discussion). As a consumer who has worked hard to build up my credit over the past 20 years, I have the option of going with a lender that has the best interest rates available.
For folks who have subpar credit for whatever reason, their options are limited. Although, I do not agree with predatory lending, we live in a free market economy. Donāt get me wrong, if companies/lenders are breaking the law, then they should be held accountable.
My friend use to do Lease returns and repo for Honda financial services and weāve concluded that people are really bad with money and credit. There are cases where people lease a loaded MDX for 1000+ and end up getting repo without making the first payment. People that got repo multiple times. Taking out loans they really canāt afford in the long run etc. etc.
I assure you they are taught med calcs in school and constantly double checking dosages.
Regardless my point is itās very basic and they make like $35/hr in cali. So something is amuck with her finances in fresno. We need to stop giving ADULTS free passes with these heartstring stories about how they were āsuckeredā
She fell behind on student loans? Is that before or after they suspended payments on them.
Wait until she sees what the predators in that industry add on to defaulted loans. And thatās not anywhere in the fine print when signing. Def a more pressing issue then overpaying for a luxury brand car you donāt need
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What interest rate would you charge to lend your own money to people who historically havenāt paid their bills?
(Iām assuming you donāt run a charity.)
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Tucker Carlson, Bernie Sanders, and AOC all threw out the idea of a 15% interest cap back in 2019.
I donāt think this will ever pass in the US, and whenever caps are made, lenders dodge them. John Oliver did a great piece on payday predatory loans and subprime automotive in 2014 and 2016 respectively, which I think everyone should see (even if he is a tad liberal for my taste)
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Doesnāt matter where you put a cap, youāll just get more denials, which then results in handwringing over a different form of āunfairness.ā
If it was profitable to give 2% (or 5% or 12%) auto loans to people who historically havenāt managed credit well, the market would address it.
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By we, I mean as US citizens. Granted, I have already lost all hope that any of our lawmakers are able to make a positive change for us at this point.
I have been building credit since I turned 18 and also have a flawless credit history. That does not believe people who havenāt been as fortunate as I have should be ripped off. By allowing these abhorrent exploitative interest rates, the situation for people in a bad spot can only get worse, not better.
There needs to be a cap. I couldnāt care less if itās a charity or not, predatory lending is predatory lending. There are tons of reasons in this shithole country that someone could fail to pay their bills.
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Itās always easier to moralize when itās other peopleās money.
Thatās why I asked the question the way I did.
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Maybe at the federal level. Here in MA, there are regulations against predatory lending. Not sure if there is a cap on interest rates or not.
https://malegislature.gov/laws/generallaws/partii/titlei/chapter183c
Credit criminals gotta drive too and cash for clunkers killed the cash car market.
I remember buying running and driving cars for little more than one run flat tire on a 330i costs at the dealer.
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