Negative Equity - wsj on long car loans

Spread all of the BKs in question over just half of the US population and you still have 99.7% of the population unaffected by medical BKs every year.

What exactly do you think is the difference between a $30k car, paying 0 down (0% interest) and a year later being worth $20k vs same car, $10k down? If you are the bank then yes, it’s big difference but from a buying perspective you lost $10k. My point is…with car buying you have neg equity either way (early in the term)…the first scenario is actual neg equity (will be realized at sell time), the second is realized neg equity (you already took the loss).

The difference is that in one case you have negative equity and in the other you don’t. Equity isn’t the difference between what something is worth and what you paid - that’s depreciation. Equity is the difference in an item’s value and the liabilities on it.

You need to read the definition of equity my friend. As the above poster mentioned, equity and depreciation aren’t the same things.

I like talking about the med BK issue…especially since we are the only civilized nation that has it. It’s interesting how people that don’t think they will be affected by it think about this subject.
Anyway, since we are on the subject of people against the corrupt system…i will give you my favorite, one that i deal with everyday…derivative futures…you can make millions and still get taxed at 15% max before deductions. Does that qualify for rigged system?

Oh i know…if that keeps you warm at night then fine. I’m not debating words here…

Yes, knowing that you actually don’t know the meaning of words you use definitely keeps me warm at night. Makes me sleep like a baby. Actual neg equity vs realized neg equity LOL

As the title says, people are getting 7 year loans. Pretty ridiculous as I can lease my car 3+ times (9 years) for the equivalent of what someone will pay for their car. Considering the maintenance the "equity " they have in the car isn’t really worth it.


Is that actually depreciation?

Well, no. That statement by itself is incorrect. What you pay is irrelevant when you’re talking about depreciation. The post my comment was in response to was discussing a “loss” due to, after some period of time, a vehicle being worth less than it was when purchased. I was pointing out that such a difference in value is due to depreciation, and has nothing to do with equity.

1 Like

There is an epidemic in this country of people buying things they can’t afford. You can buy a mattress with a 60 month loan.

If the interest rate is low or none, why not?

I can agree our medical system needs work however a vast majority of people are in debt because of buying things they can’t afford not medical bills. Don’t invalidate his point by bringing in something completely unrelated that is a straw man argument. Two things can be true at the same time. Yes the health system needs work and yes people shouldn’t buy cars with an 80 month loan. They aren’t mutually exclusive.

Mocking thoughts and prayers may be cool with your woke friends however it won’t endear you to a vast majority of the world. Pretending like people that say thoughts and prayers believe that is a fix for the worlds problems is not only absurd but shows an insidious bias against people that believe in God and pray. I thought you guys were the tolerant ones?


Because regardless of interest rate you still need to pay the principal. It’s not the interest that gets people in trouble it’s not being able to afford the thing they are buying regardless of interest.

so I had to sleep on the floor when I got with my gf, future Mrs, when they were offering 6 months no interest?

I think there are two separated issues: buying on credit and over-consumption, regardless if you pay cash or credit.

I think that’s a myth “your side” made up to mock “us” :grin:


What I found interesting in the article is that Westlake have 40% of employees busy with collections.
after partial payment your loan isn’t seriously delinquent.
And the guy walks out of finance office with $100 higher payment than he walked in.
That’s why I’m trying to advocate anywhere possible to read Leasehackr, use broker or even just use RODO.
Still will be better for less educated than what’s happening now.

1 Like

Agreed but I wouldn’t call it over consumption. If you can afford it buy whatever you want. It’s more people cannot delay gratification by waiting until they actually have money to buy something.

People may be able to “afford” to buy a new phone or TV every year by paying cash while having near $0 in their savings, while someone else takes a 7 year 0% loan having a healthy bank account.

What grinds my gears is when people substituting their income by purchasing everything on credit card with 20% interest, while paying the minimum payment of $300. Their debt may be staggering, but they are free and clear when they die, living a life with no regret, while I’m here paying off my monthly bill in full like an idiot. Perhaps they have a better grasp on life.

On this we are in complete agreement.

And who the hell is “you guys” exactly? Every one that doesn’t align with your party views is against you, right? Spare me of your political crap!
I picked on his “rigged system” remark because the system is obviously rigged, in many ways.

Yes, there are many that want to live now and think little of consequences. What i ask myself is why is that interest at 20%? My score is at 834 and all my cards are between 18% and 25%.