$1,000 loan payments (auto market as a whole, not necessarily BS)

[sajohnson]

"More Americans are car poor as they misjudge trade-in math and pile on debt
More than 1 in 4 consumers owe more on their car loans than the vehicle is worth, while car payments of $1,000 have reached a record high.":
https://www.washingtonpost.com/business/2025/07/30/underwater-car-loans-new-record-q2/

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[Robins21]

I would never spend more than $500.00 a month on a vehicle payment.

 

[Jdiditz]

Amen to that Robins 21, Even 500 is pushing it to be honest

 

[sajohnson]

Our payment was just over $500 ($507) @0.9% for 3 years, but we put about 50% down.

0.9% is cheap money. If we had the income to cover the increased payment I would have borrowed the entire amount from Ford -- which coincidentally would have meant payments of over $1,000 per month -- but our only income is my pension.

Paying $1,000/month wouldn't have bothered me, since it would have meant the money we put down would have stayed invested.

Upside down car loans are another serious issue.

 

[RSH]

Even with Fords current 0% 48 month financing offer a 60k note will be $1250 a month. Unless you're a good saver or pull money with creative financing (home equity line of credit) or don't buy the latest and greatest vehicle there is no way around high payments, it's become the norm.

 

[jkernitzki]

All of this is exactly why I paid cash for mine. No liens, no loans, no interest.

 

[sajohnson]

Even with Fords current 0% 48 month financing offer a 60k note will be $1250 a month. Unless you're a good saver or pull money with creative financing (home equity line of credit) or don't buy the latest and greatest vehicle there is no way around high payments, it's become the norm.

Good point.

If a person/couple can make the payment it's best to take advantage of that 0.0% interest -- if the alternative is pulling money out of (say) an S&P 500 Index fund.

As they say, "Past performance is no guarantee..." but The S&P 500's average annual return for the last five years (2019-2024) was ~14%.

If recent growth rates continue, in 4 years at 14% that $60,000 will grow to $101,000+.

At 7% it will be $79,000.

Of course it could all crash and burn and we'll be living in our Bronco Sports down by the river...

 

[Jdiditz]

All of this is exactly why I paid cash for mine. No liens, no loans, no interest.

Did that with my first one. Couldn't pass up deal on a new one. So I am paying now but for half the price of new.

 

[TheX]

Got $22k for my *paid for* trade. financed $17K to have some credit activity. Got a $7K discount on my OBX Sasquatch, and no penalty for early pay-off. I'll pay it off in December. My only other debt is $15k for my house.

So, payment is $350.

 

[Jdiditz]

Got $22k for my *paid for* trade. financed $17K to have some credit activity. Got a $7K discount on my OBX Sasquatch, and no penalty for early pay-off. I'll pay it off in December. My only other debt is $15k for my house.

So, payment is $350.

I got 22,5 for my paid for trade in, financed 26k didnt get quite the awesome discount you got. mine is around 430

 

[o0260o]

That's what happens when you build a country around car-centric infrastructure and make a luxury purchase a living necessity.

 

[Glamdring70]

Bronco payment was $690. I could have lowered it by putting money down or taking a longer term. But Ford had 0% going and I could keep the down payment in my account. Worked out well in my circumstance, but I don't advise having a payment that large for Average Joe. Total Monthly debt can limit your ability to secure other financing or housing leases. I don't have those limitations, but never sign up for more than you can realistically manage. Don't convince yourself to rein-in other spending to make the payment palatable. Sure, maybe for 11 months you'll pull it off but after 20, 30 or more? You will probably end up sweating it out.

 

[sajohnson]

It sounds like everyone posting here is doing well!

As most people know, one of many ways salespeople try to get prospective buyers to pay more than necessary is to ask how much they can affords to pay per month -- "What sort of monthly payment are you looking for?"

That avoids pesky subjects like: the actual cost of the vehicle (including dealer add-ons); the interest rate; the loan term, and the total amount that will be paid

A $40,000 car loan @10% over 72 months is >$740/month. Total interest is ~$13,400 for a total cost of ~$53,400.

$50,000 = ~$930/month and a total of ~$66,700.

Granted, most people do not pay 10%+, but some do, and even with lower rates the interest typically adds up to thousands of dollars.

NOT paying the interest (if possible) is the same as earning that much, guaranteed. At some point though, taking the loan makes sense. The 0.9% we got was a easy decision because it allowed us to keep our money in a S&P 500 index fund. If we had the income to pay ~$1,000/month for 36 months we would have done that, but we had to put about 50% down to keep the payments to about $500.

 

[sajohnson]

That's what happens when you build a country around car-centric infrastructure and make a luxury purchase a living necessity.

Personal vehicles have their downsides as does being forced to drive everywhere, particularly during rush hour in urban areas.

Cars are expensive and they contribute to air pollution -- although emissions have decreased dramatically in the last few decades.

I've read that an unintended consequence of the interstate highway system was/is suburban sprawl. I'd be happy if there were no more new developments built -- they are destroying our county -- but people keep buying houses around here, knowing that they will have to drive everywhere and will have a soul-crushing commute.

I don't get it, but the reason we have a car-centric infrastructure is because that's what supports the lifestyle many people want. One common reason is that they mistakenly think they will save money by moving further from D.C. Rent and mortgages are lower, but most people seem to forget the value of their time, and the fact that the cost of driving is a lot more than the cost of fuel -- it's roughly $0.60 per mile, more for high end vehicles.

My understanding is that it it's extremely difficult for a county to pass laws banning all residential construction, so unfortunately urban areas/job centers experiencing population growth will continue to see more sprawl and more traffic.

 

[TheX]

"More Americans are car poor as they misjudge trade-in math and pile on debt
More than 1 in 4 consumers owe more on their car loans than the vehicle is worth, while car payments of $1,000 have reached a record high.":
https://www.washingtonpost.com/business/2025/07/30/underwater-car-loans-new-record-q2/

If there's a paywall try (reader view):
chrome-extension://ecabifbgmdmgdllomnfinbmaellmclnh/data/reader/index.html?id=1479052921&url=https%3A%2F%2Fwww.washingtonpost.com%2Fbusiness%2F2025%2F07%2F30%2Funderwater-car-loans-new-record-q2%2F

People that just get deeper and deeper into debt should really find a new hobby. Rolling over debt into a new consumable item just gets worse and worse over time.

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