Maybe we are being a bit harsh on these 20 year olds.
Think back…did you do anything financially stupid at that age?
I got my first car loan…no credit history, 15% interest, used and out of warranty Benz SLK…was paying about a third of my income on the car.
Neat thread, keep up the good work in here. Love when my auto discussions turn political.
Negative equity is something I actually do enjoy discussing, and someone said above it was overconsumption, not interest - I think it is both. Last year around this time, the stock market began a fall of almost 20%, scared that rates can get to like 3-3.5%, still historically very low.
Problem is, we’ve consumed so much that we can’t even afford those low rates, as eventually borrowers won’t be able to pay anything beyond the interest, however low it might be.
Debt to income ratios are healthy, and I hear pundits talk about debt not being an issue… These are the genius economists? What happens to that debt to income when layoffs or a recession happen and how will that spread across the economy?
I see so many negative equity comments it drives me insane, and eventually when the debt problem explodes in the next 10, 20, 30, 40 years, whenever it is, I’ll be taking my belongings and moving to a beach in an emerging economy for like $1,500 a month and cruise around on a Vespa… Rather that than be penalized for everyone else being an irresponsible moron. The same way savers have gotten slaughtered due to financial crisis, responsible individuals with low debt to income ratios will get hit in the next crisis being lumped in with everyone else.
If I find something worthwhile this month, I’ll take the final two months on my lease, pay them, and say adios to the car.
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My first car purchase was a used Saab as well…unfortunately, it was a real “Saab Story” as the saying goes…or went 
Well … technically the balance sheet equation all us accounting students are taught is Assets Value = Liabilities + Equity
therefore … Equity = Assets Value - Liabilities
and Asset value is book value less depreciation and amortization
I agree with your position, but can also see the argument the other way. Hopefully this is a constructive troll and not a destructive one. 
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A $45,000 loan for vehicle worth $27,000. Seems crazy but it is the reality for lot of people. The question is, is it just corporate greed at lot of different levels or corporate greed supplemented with careless spending patterns. In any case an undeniable outcome is that real people suffer.
Some 33% of people who traded in cars to buy new ones in the first nine months of 2019 had negative equity, compared with 28% five years ago and 19% a decade ago, according to car-shopping site Edmunds. Those borrowers owed about $5,000 on average after they traded in their cars, before taking on new loans. Five years ago the average was about $4,000.
People are adults. If they want to make poor financial decisions, it isn’t corporate greed for the captive to sell them a new car.
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To my mind, there are two prerequisites to any prudent financial decision. Education (not school or college but more related to the asset being acquired) and Diligence (aka patience). Minus these two or even anyone of the two, and the purchaser is solely riding on luck. In cases like these, both factors are often missing.
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It is insane in this era of zero interest rates and free money.
If rates ever went back to historic norms with 5-8% per year annual car loans it would get really ugly.
Of course millions of people with no self control and/or no concept of personal finance or time value of money are revolving 20-30% credit card lines of credit. But it’s the man keeping them down…
good read, its a good thing a majority of our clients lease at my dealership 
But it’s 2019 and everyone is entitled to a BMW or Land Rover. Rates won’t stop this.
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TL;DR but this trend is endless till we see some sort of personal finance classes taught in HS. As important as financial awareness is, we do a woeful job in the educational system; if it isn’t learned at home it isn’t learned.
If I’m repeating something from earlier in thread, forgive me.
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Yes. And apparently the more expensive the cheaper it should be because the BMW Roundel kinda looks like the Goodwill logo from space.
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Yes. 20% off for the masses!
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My brother is four years younger than I am.
We went to the same elementary, middle, and high schools, in the same small town, and had most of the same teachers.
We have the same parents, who are still happily married to this day, so we come from the identical gene pool.
But only one of us ever calls the other to borrow money.
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How big is your bro’s trunk? 
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I will say that his wife smiles a lot.
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Sure, but can he pick up peanuts with it?
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What’s your brothers number and what kind of interest does he charge? 
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Actually both things can be true
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