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3 years ago
Thu Jan 06, 2022 6:37 pm
Slabenstein
OutlierDinosaurs are patriots
Slabenstein has passed the 24 month threshold and is completely inquiry free!
Slabenstein has achieved the Garden Goal !!
Slabenstein has achieved the Garden Goal !!
I wasn't sure whether I should post this here or in off-topic, since it's really about trying to buy a used car in this insane market, rather than my auto loan per se, but I wanted to share my saga/unburden myself, and this board seems the most appropriate.
In late November, my wife and I decided to move back to our hometown. I had an offer from the credit union I used to work for and there were a couple of open positions with my wife's employer that looked promising for a transfer. Everything we've been through in the last couple of years has had us wanting to be closer to friends and family (and in a town with lower cost of living), so we decided to go for it. I won't go into all the difficulties that have come up (this has been, by far, the most stressful and difficult move I've ever had, and we still don't physically move for another two weeks), but after my last day at my job up here I was finally able to take my car into the shop to have a couple of troubling noises it had been making looked at. (Not being able to work things like that into my schedule was one reason I was very glad to leave). The mechanics found two issues, one with the engine and one with the suspension. The engine problem was easily fixed, but the suspension issue wasn't.
I was driving a 2008 Suzuki SX4 that I'd had for about 5 years. I loved it, and it was hands down the best car I've ever had: sub-compact (unlike a lot of ppl, I prefer to drive a small car), AWD, manual transmission. It was great in the snow, great for getting around, easy to squeeze into a parking space, and felt surprisingly roomy inside. It was really sturdy, too. At 13 years old, there was a lot of more peripheral stuff (like rear defrost and first gear) that wasn't working on it anymore, but the engine was in good shape and it was mechanically sound. But Suzuki stopped selling automobiles in the US in 2013, and even before the pandemic parts were always a little hard to get for it.
The suspension problem was that a front coil spring was broken and the lower front ball joints were loose. Ordinarily, this wouldn't be a particularly expensive or difficult repair, but due to the pandemic the coil spring for my particular vehicle was sold out nationally w/ a back order of six months or more from Japan. As it was explained to me (I'm not a mechanic), with the way my car was constructed, the ball joints couldn't be replaced without subsequently aligning the wheels, and the wheels couldn't be aligned with a broken coil spring. That left me with three options, none of them attractive: 1) keep driving it as the ball joints continued to get worse, until one of the front wheels eventually fell off, 2) store it somewhere until whatever time I could get replacement coil springs, either from Japan or a junkyard, or 3) buy a new used car.
Option 1) obviously wasn't one to consider if I could afford another option, 2) would leave us w/o a car for probably half a year or more (junkyards weren't panning out), and option 3) would be taking on debt the payments for which I really didn't want to add to our monthly budget. But, of these, 3) seemed to be the only one that was realistic. From having done so many auto loans for members over the last few months, I knew that this was not a good time to shop for an auto, but I had no idea how truly bad it was until I tried to do it myself.
I've always been someone who buys cash cars. Despite being a loan officer, I don't like to have debt myself, so I've always spent about $2-$5k on the cars that I buy and just drive them until I run into repairs that are too costly to justify, at which time I would junk the car and replace it. But it seems like the bottom of the car market now is $8k, as that was about the lowest I could find in listings for things that weren't obviously scrap. My dad (who generously donated some of his winter break), my wife, and I all went out and looked at cars that we found in the $8-$12k range, and it was always one of three stories either 1) the car had already sold, 2) the car had been pulled from sale due to a serious mechanical issue that had come up on a test drive, or 3) a serious mechanical issue came up on our test drive. From what I saw on used car lots, as well as the trade-ins that dealers sell, it seems like the only people selling their cars right now are people like me: people whose cars broke and needed to be replaced. Maybe some of the cars that sold before we got to them were driveable, but everything we actually saw had a problem so obvious and serious I don't think it would have made it to a lot at any price before the pandemic. A 2008 Forester we drove had a bad transmission (as well as bad brakes), and a 2009 Impreza my wife drove wouldn't accelerate above about 30 mph. (And, after my wife got out of that Impreza, the salesman wasn't able to start it again for the next couple waiting to test drive it. They were still trying to jump-start it when she left the dealership.)
It was seriously like when I tried to buy my first car after college for $1k or less, where everything I looked at was either in need of major repair or past repairing. And the price of used cars right now is the other big part of what is so completely awful out there. For me, one of the reasons I've preferred to buy my used cars in such a low price range is that, with any used car, you really don't know what you're going to get. With a new car or probably a CPO, you can be reasonably assured that the car is going to run for quite a while, but past that I feel like you've got as good a chance of running into major repairs whether you pay a relative lot or little for a used vehicle. W/ cars @ $2-$5k, if I end up w/ a lemon I could scrap it and buy another. That would suck majorly b/c of the money basically thrown away on the lemon, but the car is replaceable. For cars in the $8-$12k range, I couldn't do that. Whether I financed or took a bigger chunk out of our savings, I could be still stuck with the car for quite a while if something went seriously wrong with it. We never found a car on the lots that didn't have something seriously wrong with it already, but even if we had, I wouldn't have been excited to either shell out or finance that amount on a used car.
The price of every car that we looked at was also crazy high relative to value. I was able to get a JD Power value on every car we tried to look at, and all of them were about 150% of value, the JD Power value itself being already inflated to reflect the market. W/ a max LTV of 125% w/ my lender, I would have been looking at a down payment for any financing, which I also wasn't excited about.
With all of this in mind, I was considering trying to buy a lower-end new car, preferably an Impreza, which would have run me about $25k. That amount of debt would be way more than I wanted, the payments would be higher than I wanted, but I could at least expect to get my money's worth out of it. The main issue here was, of course, that what's making the used car market so crazy is the extremely limited availability of new models. No dealership I looked at had a new car in that price range in stock (though they all had them "in transit" with an unknown delivery date...)
In my particular case, things ended up working out (more or less), but only because of happy circumstance that wouldn't have presented itself for most people finding themselves in need of a car right now. While my dad was looking at cars for me, my mom found a 2022 Outback on the lot that she liked. (As may have crept into this post some, my family likes Subarus. While I had my Suzuki, I think I was the only one among my parents and siblings who wasn't driving one.) She bought it and offered to sell me her 2015 Legacy for what the dealer offered on it as a trade-in. So, thanks to family, I was able to replace my car with a reliable used car I know to be in good repair for a reasonable price. If I hadn't, I'm not sure what I would have done. Probably either kept hitting the lots for something $8-$12k that wasn't obviously scrap (and gambling that it wasn't non-obviously scrap) or paying as much or more than a new car for a late-model used. I don't envy anyone with more limited resources trying to replace a vehicle right now.
For the loan itself, I financed $13.5k at 4.99 for 72 months at the hometown CU where I'm going to be working again. My lender pulled EQ8, which was 819 on the date of the pull. Payments will be about $220, and I'm not exactly happy about that or the debt, but given my options in our current circumstances, I think this is about the best that things could have gone. This is the first time I've ever had an auto loan (or any kind of installment that wasn't student loans), so maybe I'll get more comfortable as I get more used to it. I'm hoping I'll be able to knock a big-ish chunk off of the balance after a while, once we've moved, settled into our new jobs, etc, and maybe that will make me feel a little bit better.
Anyway, thanks for coming to my TED Talk. I'm not totally sure what this post contributes, other than my surprise at just how extremely awful it is to look for a used car right now, and to voice that I don't like having debt. :/
In late November, my wife and I decided to move back to our hometown. I had an offer from the credit union I used to work for and there were a couple of open positions with my wife's employer that looked promising for a transfer. Everything we've been through in the last couple of years has had us wanting to be closer to friends and family (and in a town with lower cost of living), so we decided to go for it. I won't go into all the difficulties that have come up (this has been, by far, the most stressful and difficult move I've ever had, and we still don't physically move for another two weeks), but after my last day at my job up here I was finally able to take my car into the shop to have a couple of troubling noises it had been making looked at. (Not being able to work things like that into my schedule was one reason I was very glad to leave). The mechanics found two issues, one with the engine and one with the suspension. The engine problem was easily fixed, but the suspension issue wasn't.
I was driving a 2008 Suzuki SX4 that I'd had for about 5 years. I loved it, and it was hands down the best car I've ever had: sub-compact (unlike a lot of ppl, I prefer to drive a small car), AWD, manual transmission. It was great in the snow, great for getting around, easy to squeeze into a parking space, and felt surprisingly roomy inside. It was really sturdy, too. At 13 years old, there was a lot of more peripheral stuff (like rear defrost and first gear) that wasn't working on it anymore, but the engine was in good shape and it was mechanically sound. But Suzuki stopped selling automobiles in the US in 2013, and even before the pandemic parts were always a little hard to get for it.
The suspension problem was that a front coil spring was broken and the lower front ball joints were loose. Ordinarily, this wouldn't be a particularly expensive or difficult repair, but due to the pandemic the coil spring for my particular vehicle was sold out nationally w/ a back order of six months or more from Japan. As it was explained to me (I'm not a mechanic), with the way my car was constructed, the ball joints couldn't be replaced without subsequently aligning the wheels, and the wheels couldn't be aligned with a broken coil spring. That left me with three options, none of them attractive: 1) keep driving it as the ball joints continued to get worse, until one of the front wheels eventually fell off, 2) store it somewhere until whatever time I could get replacement coil springs, either from Japan or a junkyard, or 3) buy a new used car.
Option 1) obviously wasn't one to consider if I could afford another option, 2) would leave us w/o a car for probably half a year or more (junkyards weren't panning out), and option 3) would be taking on debt the payments for which I really didn't want to add to our monthly budget. But, of these, 3) seemed to be the only one that was realistic. From having done so many auto loans for members over the last few months, I knew that this was not a good time to shop for an auto, but I had no idea how truly bad it was until I tried to do it myself.
I've always been someone who buys cash cars. Despite being a loan officer, I don't like to have debt myself, so I've always spent about $2-$5k on the cars that I buy and just drive them until I run into repairs that are too costly to justify, at which time I would junk the car and replace it. But it seems like the bottom of the car market now is $8k, as that was about the lowest I could find in listings for things that weren't obviously scrap. My dad (who generously donated some of his winter break), my wife, and I all went out and looked at cars that we found in the $8-$12k range, and it was always one of three stories either 1) the car had already sold, 2) the car had been pulled from sale due to a serious mechanical issue that had come up on a test drive, or 3) a serious mechanical issue came up on our test drive. From what I saw on used car lots, as well as the trade-ins that dealers sell, it seems like the only people selling their cars right now are people like me: people whose cars broke and needed to be replaced. Maybe some of the cars that sold before we got to them were driveable, but everything we actually saw had a problem so obvious and serious I don't think it would have made it to a lot at any price before the pandemic. A 2008 Forester we drove had a bad transmission (as well as bad brakes), and a 2009 Impreza my wife drove wouldn't accelerate above about 30 mph. (And, after my wife got out of that Impreza, the salesman wasn't able to start it again for the next couple waiting to test drive it. They were still trying to jump-start it when she left the dealership.)
It was seriously like when I tried to buy my first car after college for $1k or less, where everything I looked at was either in need of major repair or past repairing. And the price of used cars right now is the other big part of what is so completely awful out there. For me, one of the reasons I've preferred to buy my used cars in such a low price range is that, with any used car, you really don't know what you're going to get. With a new car or probably a CPO, you can be reasonably assured that the car is going to run for quite a while, but past that I feel like you've got as good a chance of running into major repairs whether you pay a relative lot or little for a used vehicle. W/ cars @ $2-$5k, if I end up w/ a lemon I could scrap it and buy another. That would suck majorly b/c of the money basically thrown away on the lemon, but the car is replaceable. For cars in the $8-$12k range, I couldn't do that. Whether I financed or took a bigger chunk out of our savings, I could be still stuck with the car for quite a while if something went seriously wrong with it. We never found a car on the lots that didn't have something seriously wrong with it already, but even if we had, I wouldn't have been excited to either shell out or finance that amount on a used car.
The price of every car that we looked at was also crazy high relative to value. I was able to get a JD Power value on every car we tried to look at, and all of them were about 150% of value, the JD Power value itself being already inflated to reflect the market. W/ a max LTV of 125% w/ my lender, I would have been looking at a down payment for any financing, which I also wasn't excited about.
With all of this in mind, I was considering trying to buy a lower-end new car, preferably an Impreza, which would have run me about $25k. That amount of debt would be way more than I wanted, the payments would be higher than I wanted, but I could at least expect to get my money's worth out of it. The main issue here was, of course, that what's making the used car market so crazy is the extremely limited availability of new models. No dealership I looked at had a new car in that price range in stock (though they all had them "in transit" with an unknown delivery date...)
In my particular case, things ended up working out (more or less), but only because of happy circumstance that wouldn't have presented itself for most people finding themselves in need of a car right now. While my dad was looking at cars for me, my mom found a 2022 Outback on the lot that she liked. (As may have crept into this post some, my family likes Subarus. While I had my Suzuki, I think I was the only one among my parents and siblings who wasn't driving one.) She bought it and offered to sell me her 2015 Legacy for what the dealer offered on it as a trade-in. So, thanks to family, I was able to replace my car with a reliable used car I know to be in good repair for a reasonable price. If I hadn't, I'm not sure what I would have done. Probably either kept hitting the lots for something $8-$12k that wasn't obviously scrap (and gambling that it wasn't non-obviously scrap) or paying as much or more than a new car for a late-model used. I don't envy anyone with more limited resources trying to replace a vehicle right now.
For the loan itself, I financed $13.5k at 4.99 for 72 months at the hometown CU where I'm going to be working again. My lender pulled EQ8, which was 819 on the date of the pull. Payments will be about $220, and I'm not exactly happy about that or the debt, but given my options in our current circumstances, I think this is about the best that things could have gone. This is the first time I've ever had an auto loan (or any kind of installment that wasn't student loans), so maybe I'll get more comfortable as I get more used to it. I'm hoping I'll be able to knock a big-ish chunk off of the balance after a while, once we've moved, settled into our new jobs, etc, and maybe that will make me feel a little bit better.
Anyway, thanks for coming to my TED Talk. I'm not totally sure what this post contributes, other than my surprise at just how extremely awful it is to look for a used car right now, and to voice that I don't like having debt. :/
Click images to enlarge them.
- Tagline Dinosaurs are patriots
- Score data EX8 817, TU8 834, EQ8 834
- Classic 8 Scorecard CLEAN/THICK/MATURE/NO-NEW-REVOLVER
- Mortgage Scorecard CLEAN/THICK/MATURE/NO-NEW-ACCOUNT
- AoOA 20 yrs
- AoORA 20 yrs
- Date of Last Inquiry and/or New Account Opening September 1st, 2022
- Garden Goal 24
