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"the customer only really cares about the monthly payment," I noticed this when I bought my Subaru. There was a young couple next to me that worked hard with t

"the customer only really cares about the monthly payment," I noticed this when I bought my Subaru. There was a young couple next to me that worked hard with the sales guy to get an acceptable monthly payment for their desired car. No thought about actual price or duration of the loan. I wanted to scream at them that they were making a big mistake.

Esophagus4 1y ago
Car salesmen also want to get you to focus on monthly payment instead of price. It’s easy to manipulate the payment by adjusting the loan term without actually taking anything off the price. And then the finance manager can further manipulate the payment by upselling you additional products and saying it’s only an additional $7 per month instead of saying nitrogen in your tires will cost $336.
- tharkun__ 1y ago
  Agreed. I usually have to remind the salesperson to stop talking to me in monthly payment terms. I always tell them to talk to me about final price including all interest. It's a bit of an uphill battle, where you have to tell them over and over. They're just so used to trying to sell the monthly payment. It's really no wonder that people that don't understand interest (many if not most) will fall for this. And if you actually can't really afford the car, it's also understandable why many if not most people will "gladly" fall for it. The alternative is not having the car of their dreams. That said, financing in general isn't bad. I've financed most of my cars. I wouldn't have had the sort of "emergency fund" to just outright buy the car and financing allowed me to get the car when I needed it instead of buying some "temp beater" and taking even longer to buy the car I really wanted when I needed it and I paid it back with priority (i.e. faster than the financing terms required it).
  - benterix 1y ago
    Temp beaters are not that bad, if you choose them wisely (like a boring 3-year old Toyota). Nothing fancy, no surprises, years ahead with just basic service. And a small crash will only break your car, not your heart.
    - silverquiet 1y ago
      How much cheaper is a boring 3-year old Toyota versus a boring brand new Toyota? Why would the person who buys a boring new Toyota unload it for a significant loss after just 3 years of ownership?
      - deleted 1y ago
        [deleted]
    - asa400 1y ago
      Agreed. If you can find one. I bought a new vehicle in 2023 after years of not owning a car. I was trying to buy used, but the delta between new and 1-3 year old used was so small it made no sense to go used. I was giving up a warranty for often times $500-$1500, total. This is still true, and especially true for brands whose used vehicles command a price premium, like Toyota. Used values are still high relative to historical norms because a lot of the market that normally buys new vehicles is priced out of buying new, and some of that demand has been absorbed by the used market (some of it has dropped out of the market and/or deferred a purchase until later). The idea of buying a relatively low miles 3-year old Toyota for materially less than a new one doesn't really exist, currently. Now, if you want to go for a 3 year old car with 150,000+ miles, sure, you can save some money, but that's a ton of miles per year. You're counting on the previous owner(s) being _really_ on top of their basic maintenance.
    - vjvjvjvjghv 1y ago
      3 year old used to be the sweet spot but when I bought a car two years ago, 3 year old cars cost almost as much as new ones so I went with new. I would also not call a 3 year old car a “beater”. A “beater” is more like 15 years old.
    - jemmyw 1y ago
      a 3 year old toyota is a temp beater? I bought a 5 year old toyota and consider that pretty luxury compared to the 7-10 year old cars I've always previously purchased (edit: and I'd never call them beaters either, I've always looked after them). I've never financed a car, I think it's a crazy thing to do when there are so many good used cars available. And new doesn't mean without problems either, usually you can get good information on the reliability of older models that you won't know for new ones.
  - LakesAndTrees 1y ago
    This reminds me of my most recent real estate transaction. Over and over, the agent kept insisting that I increase my counter offer. "Think about it - that's only like a latte a day". Yes. A latte a day, that I don't already purchase. Over 25 years. We were talking about close to $50,000.
techjamie 1y ago
When I bought my most recent car I drove the financing guy nuts because I kept going back to total price instead of caring about payments. Was clearly making him sweat a little bit.
rurp 1y ago
Basic personal finance should be one of the top things people learn in high school. It's wild how many people have no concept of how loans and interest rates work. I didn't learn anything about that stuff before high school and it's some of the most important knowledge for a typical consumer in our society.

Esophagus4 1y ago

Car salesmen also want to get you to focus on monthly payment instead of price. It’s easy to manipulate the payment by adjusting the loan term without actually taking anything off the price. And then the finance manager can further manipulate the payment by upselling you additional products and saying it’s only an additional $7 per month instead of saying nitrogen in your tires will cost $336.

tharkun__ 1y ago
Agreed. I usually have to remind the salesperson to stop talking to me in monthly payment terms. I always tell them to talk to me about final price including all interest. It's a bit of an uphill battle, where you have to tell them over and over. They're just so used to trying to sell the monthly payment. It's really no wonder that people that don't understand interest (many if not most) will fall for this. And if you actually can't really afford the car, it's also understandable why many if not most people will "gladly" fall for it. The alternative is not having the car of their dreams. That said, financing in general isn't bad. I've financed most of my cars. I wouldn't have had the sort of "emergency fund" to just outright buy the car and financing allowed me to get the car when I needed it instead of buying some "temp beater" and taking even longer to buy the car I really wanted when I needed it and I paid it back with priority (i.e. faster than the financing terms required it).
- benterix 1y ago
  Temp beaters are not that bad, if you choose them wisely (like a boring 3-year old Toyota). Nothing fancy, no surprises, years ahead with just basic service. And a small crash will only break your car, not your heart.
  - silverquiet 1y ago
    How much cheaper is a boring 3-year old Toyota versus a boring brand new Toyota? Why would the person who buys a boring new Toyota unload it for a significant loss after just 3 years of ownership?
    - deleted 1y ago
      [deleted]
  - asa400 1y ago
    Agreed. If you can find one. I bought a new vehicle in 2023 after years of not owning a car. I was trying to buy used, but the delta between new and 1-3 year old used was so small it made no sense to go used. I was giving up a warranty for often times $500-$1500, total. This is still true, and especially true for brands whose used vehicles command a price premium, like Toyota. Used values are still high relative to historical norms because a lot of the market that normally buys new vehicles is priced out of buying new, and some of that demand has been absorbed by the used market (some of it has dropped out of the market and/or deferred a purchase until later). The idea of buying a relatively low miles 3-year old Toyota for materially less than a new one doesn't really exist, currently. Now, if you want to go for a 3 year old car with 150,000+ miles, sure, you can save some money, but that's a ton of miles per year. You're counting on the previous owner(s) being _really_ on top of their basic maintenance.
  - vjvjvjvjghv 1y ago
    3 year old used to be the sweet spot but when I bought a car two years ago, 3 year old cars cost almost as much as new ones so I went with new. I would also not call a 3 year old car a “beater”. A “beater” is more like 15 years old.
  - jemmyw 1y ago
    a 3 year old toyota is a temp beater? I bought a 5 year old toyota and consider that pretty luxury compared to the 7-10 year old cars I've always previously purchased (edit: and I'd never call them beaters either, I've always looked after them). I've never financed a car, I think it's a crazy thing to do when there are so many good used cars available. And new doesn't mean without problems either, usually you can get good information on the reliability of older models that you won't know for new ones.
- LakesAndTrees 1y ago
  This reminds me of my most recent real estate transaction. Over and over, the agent kept insisting that I increase my counter offer. "Think about it - that's only like a latte a day". Yes. A latte a day, that I don't already purchase. Over 25 years. We were talking about close to $50,000.

techjamie 1y ago

When I bought my most recent car I drove the financing guy nuts because I kept going back to total price instead of caring about payments. Was clearly making him sweat a little bit.

rurp 1y ago

Basic personal finance should be one of the top things people learn in high school. It's wild how many people have no concept of how loans and interest rates work. I didn't learn anything about that stuff before high school and it's some of the most important knowledge for a typical consumer in our society.