4 ms·

> Perhaps it's because I grew up around people who were good with their hands, but in my mind buying a used car isn't a scary matter - you visit the private sel

> Perhaps it's because I grew up around people who were good with their hands, but in my mind buying a used car isn't a scary matter - you visit the private seller, you look at the vehicle, you check for the things one needs to check for, and you know if it has problems or not. And if you can't do this, you've got a cousin or uncle who can. You could do that, sure. Or you could get a respected independent assessor. Here in South Africa we have Dekra (and others) who wil do a test of the car more thoroughly than I can (road test till operating temperature is reached, examination of the car on a lift for chassis damage/signs of repairs, oil leaks, etc, examination of car for signs of accident repair, pulling of DTC, etc). If you go to this place - https://www.webuycars.co.za/buy-a-car/18C404984 https://www.webuycars.co.za/buy-a-car/18C404984 - you'll see a car that looks good for its age on the surface with only a few easily fixable things (tail lights, brakes, etc). But the attached report shows that the chassis is twisted and that there are oil leaks. These two problems are terminal faults that I, even with a background as a mechanic, will not spot because I cannot put the car on a lift when I go to view it. It's not perfect, but at least I don't waste time test driving a car with terminal faults (chassis damage, transmission DTCs or problems, engines without compression, etc). It means when I look for a car, I can dismiss dozens of cars based just on the attached Dekra report, and spend more time examining the remaining ones for faults that Dekra might have missed.

nbadg 1y ago
Additionally, a lot of people who would otherwise be in the used car market for price reasons in the US cannot afford to purchase even a used car outright, and getting financing for cars sold on the private market is, to my knowledge, not really possible.
- fleeting900 1y ago
  You can’t get a loan for a used car in the US? This is pretty common in Australia. All of the banks offer car loans or “personal loans”
- lelanthran 1y ago
  > Additionally, a lot of people who would otherwise be in the used car market for price reasons in the US cannot afford to purchase even a used car outright, and getting financing for cars sold on the private market is, to my knowledge, not really possible. To me, that's the biggest reason for used-car prices to be low - the market is restricted to those who have cash. IME, the prices of cars that cannot be financed (older than 5 years) is severely constrained. I've seen a 5 year old model advertised for exactly twice the price as an almost identical 6 year old model, with similar mileage and similar condition[1]. I find that hard to reconcile with the other posters in this thread who observed that used cars are still too expensive. Maybe they are looking at used-cars that can still be financed (under $X years, for example)? ======================= [1] Condition of both was reported by the same independent assessor - see my posting upthread
  - mcv 1y ago
    Ah, so this is really just another way poverty is punished. I can afford to save up $8000 for a second hand car, but people who can't, have to buy more expensive cars on a (predatory?) car loan.
    - lelanthran 1y ago
      > Ah, so this is really just another way poverty is punished. I Yes, but it's not intentional like you seem to imply, it's incidental. The intention is not to punish those with no money, its to extract the most value in every segment of the market. Trust me, maximal value extraction is similarly going on for new cars and lightly-used second hand cars too.
      - mcv 1y ago
        I'm not saying it's intentional, but there are a lot of mechanisms like these that make it more expensive to be poor, creating a vicious cycle of poverty.
        lelanthran 1y ago
- nradov 1y ago
  That's not true. There's a whole industry of lenders for used cars. Interest rates are typically slightly higher than new cars but as long as you have a decent credit rating and the car isn't too old you can get financing. Note that those lenders are separate from "buy here pay here" used car dealers. They offer their own in-house financing at much higher interest rates, targeting consumers with bad credit. Some of these are close to being a scam.
  - ethbr1 1y ago
    Indeed. Many banks offer used car loans. https://www.investopedia.com/the-best-used-car-loans-11703063 https://www.investopedia.com/the-best-used-car-loans-1170306... I've used PenFed for years: https://www.penfed.org/auto#cbs https://www.penfed.org/auto#cbs
    - nbadg 1y ago
      Wow, did not realize that private-party purchase vehicle loans were a thing. Wild that the banks are willing to take on that much risk.
- Ancapistani 1y ago
  It's much easier to get financing than you might think if you've not tired - but the rates aren't great, and you're limited to fairly new vehicles. My bank only finances back to 2018 model years, and only 80% of what they consider to be "market value". In practice this means two things. The first is that the cars that can be financed tend to be almost as expensive as new - but at a higher interest rate and shorter loan term. That means from a monthly budget perspective, you can end up paying as much for a used car as a new one while needing to keep funds available for repairs and maintenance. The other is that older vehicles are typically financed without traditional "auto loans". If I wanted to finance a $5k truck, I could do so - but it would be an unsecured "personal loan" at significantly higher interest. You have to have fairly good credit to do that, too. I'm not sure if the American credit score system is at all familiar to those outside the US, but the minimum score for a personal loan is around 600. While granted, I haven't been good with money most of my life, it took me from ages 30 to 35 to get my credit score to the point I could buy a home in 2018 (605). As soon as we closed on our home, my score went back down to ~570, and it has been a struggle ever since. In the seven years since then I've had exactly two "late" payments reported. Both were issues with autopay failing and my not noticing until I got a letter in the mail - at which point I immediately resolved the issue and brought the account current. My credit score right now is ~615. On paper, I carry a high credit card utilization that keeps it from being higher. In reality I pay all of my cards but one off every month. I could get my score up to ~680 in two months by paying off those cards and not using them - but unless I need the score for something, why would I? I have ~$6k in expenses that I run through those cards every month. I get 3% "cash back" for every purchase I make on them, so I end up earning an addition ~$180 / month for doing so; it'd be silly to not take advantage of that. The result is that while I can get an auto loan on a used vehicle, it makes no sense for me to do so. Instead, I've not borrowed for a vehicle of my own since 2012. When I totaled my Jeep, I took the insurance payout and bought my '91 GMC. We have two other vehicles: my wife has a 2019 F-150 Platinum, and my daughter has a 2024 Subaru Crosstrek Wilderness. Both are financed. For the Ford, my sister wanted to trade it in on a Ram 2500. It wasn't drivable at the time due to a failed timing cover gasket, which the dealership estimated at $5k to repair. Another dealership offered her $12k for it. She owed $23k on a 0% note. With the towing package and other upgrades, it's worth ~$35k on the private market in running order - so I offered to pay off her loan on it ($23k). She agreed, then asked if I could just take over the loan she already had on it to continue to build her credit. That's what we did. I've got another two years to pay on it at ~$700 / month. For the Subaru... well, we knowingly overspent there because my daughter's previous vehicle was destroyed when someone t-boned her on her way to school last winter. She was very hesitant to get back on the road, and my wife and I weren't exactly comfortable with the idea either. We compensated by buying her the absolute safest vehicle we could find that fit her use case. It came down to Subaru and Volvo; Subaru offered the best price and she preferred the Crosstrek or Outback anyhow. We could have gone as low as ~$25k or as high as ~$45k for a Crosstrek, depending on trim. We went for the Wilderness because it's geared slightly lower and therefore has more low-end acceleration - which is important to us, so she has the power necessary to get out of bad situations on the road if warranted. Total financed there: ~$37k, for six years, with a ~$750 / month payment. All of this is to say: I make good money in tech. Though I am the sole income earner for the family, we're well over 2x the mean household income in my area. We have three vehicles as a family and ~$1.5k / month in vehicle payments. I don't understand how families making half of what I make are driving three vehicles <5 years old - but they absolutely are. My entire debt load -- including our mortgage and some lingering student loans -- is less than my annual salary. I'm extremely uncomfortable with that much debt. Meanwhile, the people I see around me are living in homes that cost twice as much as ours, have more and newer vehicles, and make half as much. It makes no sense to me.
- Ancapistani 1y ago
  Another thing that makes no sense to me: I couldn't get my bank to finance the purchase of an older vehicle at any rate. Last year, my air conditioner condenser went out and had to be replaced for a total of of $4.5k. I could have paid that out of pocket, but didn't want to deplete my emergency fund and always check my options. The same bank was happy to give me a "personal loan" for $5k at 9% APR. I asked if I putting up collateral could lower that rate - they offered 6% if I'd use a vehicle title to secure the loan. So, I can get a loan for $10k on a 2020 vehicle at 9%, or I could get a loan for $5k at 6%... but only if I already had the vehicle's title in my name at the time. It makes no sense to me at all, but that's how it's structured. It's far easier to get credit when you "want" it than when you "need" it.
  - qcnguy 1y ago
    If you need the money you're less likely to be able to pay it back, is the logic.
  - deleted 1y ago
    [deleted]
  - _DeadFred_ 1y ago
    Can't they still attach the AC loan to your house without you putting it up? I know having work on your home can automatically attach.
    - Ancapistani 1y ago
      Yes, I could have gotten a home equity loan. I didn’t want to do that because I want to be able to sell it in the near future depending on how things work out, and didn’t want the additional title encumbrance.
nandomrumber 1y ago
DTC - Diagnostic Trouble Code I had to look that one up.
- lelanthran 1y ago
  Sorry. I assumed too much. Obviously most people won't know what a DTC is. The value in a DTC is that you can pull the stored code to see, for example, oil pressure warnings that were issued last week. If the car you are looking at reveals the DTC but appears to be full of oil anyway, it likely was only properly filled recently, so you can assume engine damage to only show itself after you drive off 8n the car.

nbadg 1y ago

Additionally, a lot of people who would otherwise be in the used car market for price reasons in the US cannot afford to purchase even a used car outright, and getting financing for cars sold on the private market is, to my knowledge, not really possible.

fleeting900 1y ago
You can’t get a loan for a used car in the US? This is pretty common in Australia. All of the banks offer car loans or “personal loans”
lelanthran 1y ago
> Additionally, a lot of people who would otherwise be in the used car market for price reasons in the US cannot afford to purchase even a used car outright, and getting financing for cars sold on the private market is, to my knowledge, not really possible. To me, that's the biggest reason for used-car prices to be low - the market is restricted to those who have cash. IME, the prices of cars that cannot be financed (older than 5 years) is severely constrained. I've seen a 5 year old model advertised for exactly twice the price as an almost identical 6 year old model, with similar mileage and similar condition[1]. I find that hard to reconcile with the other posters in this thread who observed that used cars are still too expensive. Maybe they are looking at used-cars that can still be financed (under $X years, for example)? ======================= [1] Condition of both was reported by the same independent assessor - see my posting upthread
- mcv 1y ago
  Ah, so this is really just another way poverty is punished. I can afford to save up $8000 for a second hand car, but people who can't, have to buy more expensive cars on a (predatory?) car loan.
  - lelanthran 1y ago
    > Ah, so this is really just another way poverty is punished. I Yes, but it's not intentional like you seem to imply, it's incidental. The intention is not to punish those with no money, its to extract the most value in every segment of the market. Trust me, maximal value extraction is similarly going on for new cars and lightly-used second hand cars too.
    - mcv 1y ago
      I'm not saying it's intentional, but there are a lot of mechanisms like these that make it more expensive to be poor, creating a vicious cycle of poverty.
      - lelanthran 1y ago
nradov 1y ago
That's not true. There's a whole industry of lenders for used cars. Interest rates are typically slightly higher than new cars but as long as you have a decent credit rating and the car isn't too old you can get financing. Note that those lenders are separate from "buy here pay here" used car dealers. They offer their own in-house financing at much higher interest rates, targeting consumers with bad credit. Some of these are close to being a scam.
- ethbr1 1y ago
  Indeed. Many banks offer used car loans. https://www.investopedia.com/the-best-used-car-loans-11703063 https://www.investopedia.com/the-best-used-car-loans-1170306... I've used PenFed for years: https://www.penfed.org/auto#cbs https://www.penfed.org/auto#cbs
  - nbadg 1y ago
    Wow, did not realize that private-party purchase vehicle loans were a thing. Wild that the banks are willing to take on that much risk.
Ancapistani 1y ago
It's much easier to get financing than you might think if you've not tired - but the rates aren't great, and you're limited to fairly new vehicles. My bank only finances back to 2018 model years, and only 80% of what they consider to be "market value". In practice this means two things. The first is that the cars that can be financed tend to be almost as expensive as new - but at a higher interest rate and shorter loan term. That means from a monthly budget perspective, you can end up paying as much for a used car as a new one while needing to keep funds available for repairs and maintenance. The other is that older vehicles are typically financed without traditional "auto loans". If I wanted to finance a $5k truck, I could do so - but it would be an unsecured "personal loan" at significantly higher interest. You have to have fairly good credit to do that, too. I'm not sure if the American credit score system is at all familiar to those outside the US, but the minimum score for a personal loan is around 600. While granted, I haven't been good with money most of my life, it took me from ages 30 to 35 to get my credit score to the point I could buy a home in 2018 (605). As soon as we closed on our home, my score went back down to ~570, and it has been a struggle ever since. In the seven years since then I've had exactly two "late" payments reported. Both were issues with autopay failing and my not noticing until I got a letter in the mail - at which point I immediately resolved the issue and brought the account current. My credit score right now is ~615. On paper, I carry a high credit card utilization that keeps it from being higher. In reality I pay all of my cards but one off every month. I could get my score up to ~680 in two months by paying off those cards and not using them - but unless I need the score for something, why would I? I have ~$6k in expenses that I run through those cards every month. I get 3% "cash back" for every purchase I make on them, so I end up earning an addition ~$180 / month for doing so; it'd be silly to not take advantage of that. The result is that while I can get an auto loan on a used vehicle, it makes no sense for me to do so. Instead, I've not borrowed for a vehicle of my own since 2012. When I totaled my Jeep, I took the insurance payout and bought my '91 GMC. We have two other vehicles: my wife has a 2019 F-150 Platinum, and my daughter has a 2024 Subaru Crosstrek Wilderness. Both are financed. For the Ford, my sister wanted to trade it in on a Ram 2500. It wasn't drivable at the time due to a failed timing cover gasket, which the dealership estimated at $5k to repair. Another dealership offered her $12k for it. She owed $23k on a 0% note. With the towing package and other upgrades, it's worth ~$35k on the private market in running order - so I offered to pay off her loan on it ($23k). She agreed, then asked if I could just take over the loan she already had on it to continue to build her credit. That's what we did. I've got another two years to pay on it at ~$700 / month. For the Subaru... well, we knowingly overspent there because my daughter's previous vehicle was destroyed when someone t-boned her on her way to school last winter. She was very hesitant to get back on the road, and my wife and I weren't exactly comfortable with the idea either. We compensated by buying her the absolute safest vehicle we could find that fit her use case. It came down to Subaru and Volvo; Subaru offered the best price and she preferred the Crosstrek or Outback anyhow. We could have gone as low as ~$25k or as high as ~$45k for a Crosstrek, depending on trim. We went for the Wilderness because it's geared slightly lower and therefore has more low-end acceleration - which is important to us, so she has the power necessary to get out of bad situations on the road if warranted. Total financed there: ~$37k, for six years, with a ~$750 / month payment. All of this is to say: I make good money in tech. Though I am the sole income earner for the family, we're well over 2x the mean household income in my area. We have three vehicles as a family and ~$1.5k / month in vehicle payments. I don't understand how families making half of what I make are driving three vehicles <5 years old - but they absolutely are. My entire debt load -- including our mortgage and some lingering student loans -- is less than my annual salary. I'm extremely uncomfortable with that much debt. Meanwhile, the people I see around me are living in homes that cost twice as much as ours, have more and newer vehicles, and make half as much. It makes no sense to me.
Ancapistani 1y ago
Another thing that makes no sense to me: I couldn't get my bank to finance the purchase of an older vehicle at any rate. Last year, my air conditioner condenser went out and had to be replaced for a total of of $4.5k. I could have paid that out of pocket, but didn't want to deplete my emergency fund and always check my options. The same bank was happy to give me a "personal loan" for $5k at 9% APR. I asked if I putting up collateral could lower that rate - they offered 6% if I'd use a vehicle title to secure the loan. So, I can get a loan for $10k on a 2020 vehicle at 9%, or I could get a loan for $5k at 6%... but only if I already had the vehicle's title in my name at the time. It makes no sense to me at all, but that's how it's structured. It's far easier to get credit when you "want" it than when you "need" it.
- qcnguy 1y ago
  If you need the money you're less likely to be able to pay it back, is the logic.
- deleted 1y ago
  [deleted]
- _DeadFred_ 1y ago
  Can't they still attach the AC loan to your house without you putting it up? I know having work on your home can automatically attach.
  - Ancapistani 1y ago
    Yes, I could have gotten a home equity loan. I didn’t want to do that because I want to be able to sell it in the near future depending on how things work out, and didn’t want the additional title encumbrance.

nandomrumber 1y ago

DTC - Diagnostic Trouble Code I had to look that one up.

lelanthran 1y ago
Sorry. I assumed too much. Obviously most people won't know what a DTC is. The value in a DTC is that you can pull the stored code to see, for example, oil pressure warnings that were issued last week. If the car you are looking at reveals the DTC but appears to be full of oil anyway, it likely was only properly filled recently, so you can assume engine damage to only show itself after you drive off 8n the car.