Latest news with #carloans
Yahoo
13-07-2025
- Automotive
- Yahoo
Vincent Chan Reveals The Top Wealth Killer: 'It's So Normalized'
Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. Good money habits can help you build wealth, but a few bad ones can derail your progress. While it's easy to think of bad investments and impulsive spending as two factors that can kill wealth, financial guru Vincent Chan reveals the top wealth killer that affects most people. "It's so normalized," Chan stated when discussing this wealth killer. Chan is talking about taking out an auto loan to buy your car. He offers concrete numbers and examples that demonstrate how much money you end up losing due to these loans. These are some of the reasons why a car loan is a bad idea. Don't Miss: Warren Buffett once said, "If you don't find a way to make money while you sleep, you will work until you die." Here's , starting today. $100k+ in investable assets? – no cost, no obligation. Chan starts the video by mentioning that one of his friends took out a $55,000 car loan and ended up paying $70,000 for the vehicle. The loan had a 5-year term, and now that the loan has been paid off, the car is only worth $25,000. It's a $45,000 loss that will get worse over time. The car model will continue to get older, and it will need maintenance and repairs along the way. Many people fall for the trap of buying a new car with a loan, but for many people, it's also a necessary evil. Not everyone has $55,000 available to buy a new car, and car prices may continue to go up due to inflation and tariffs. However, a car doesn't benefit from inflation. While your house will likely gain value over time, your car is actively losing value. The sharpest price decline takes place the moment you drive your new car out of the dealership. Trending: The secret weapon in billionaire investor portfolios that you almost certainly don't own yet. Chan also mentions that the average car payment for a new vehicle comes to $742 per month. That's a sizable percentage of most people's salaries since the real median household income was $80,610 in 2023, according to the U.S. Census Bureau. That comes to $6,717.50 per month. The average car payment of $742 per month makes up 11% of the average American household's income. This average auto loan payment doesn't even represent the full cost of car ownership. You also have to pay for insurance, gas, maintenance, repairs, and other expenses. A high auto loan payment won't give most Americans flexibility with portfolio contributions. They also have to contend with housing costs, groceries, taxes, and healthcare. While you'll have to cover essential costs either way, going over-the-top with your auto loan will make it more difficult to build a nest insurance is one of the silent costs of owning a vehicle that adds up over time. Chan pulled up research that indicates full coverage car insurance policies cost an average of $2,680 per year. Premiums also fluctuate due to a car's model, age, and other factors. Chan suggests comparing car insurance policies each year to make sure you are getting the best deal. This strategy takes some time, but you can end up saving thousands of dollars over your lifetime by paying attention to your car insurance. He suggests comparison shopping every six to 12 months. A car is an essential resource for many people, especially individuals who live in rural and suburban communities. However, if you don't monitor your costs, those monthly car loan payments can eat up a large percentage of your monthly paycheck. Buying a used car can save you money and help you become debt-free sooner, and shopping around for the best insurance policy is also beneficial. Read Next: Over the last five years, the price of gold has increased by approximately 83% — Investors like Bill O'Reilly and Rudy Giuliani are . Image: Shutterstock This article Vincent Chan Reveals The Top Wealth Killer: 'It's So Normalized' originally appeared on Sign in to access your portfolio
Yahoo
07-07-2025
- Automotive
- Yahoo
Car buyers set a record with more than $1,000-a-month car payments in Q2
Car buyers nationally set a record in the second quarter as more opted for whoppingly long-term loans and monthly car payments that rivaled some monthly home mortgage bills. According to second-quarter data crunched by the share of new-vehicle buyers to commit to monthly payments of $1,000 or more hit an all-time high of 19.3%, or nearly 1 in 5 consumers. That's up from 17.8% in the year-ago quarter. The average monthly payment was $756, up $16 from a year earlier. Edmunds reported that car buyers are taking out longer-term loans to achieve palatable payments. In the quarter, 22.4% of new-vehicle financing were of loans 84 months or longer, a new record. In the second quarter last year, 84-month loans accounted for 17.6% of new-car financing. In metro Detroit, a Chevrolet and Ford dealer each reported monthly loan terms and payments are much lower here than Edmunds' national averages because of the popularity of leasing and employee discounts, both of which bring down monthly payments. But at Gordon Chevrolet, which owns a store in Garden City and Orange Park, Florida, dealer Adam Logemann said he is seeing more customers in Florida increasingly opt for longer, 72- to 84-month loans. Edmunds' Ivan Drury said it would be easy to assume that the 25% tariffs President Donald Trump put on imported vehicles are to blame. But the record-breaking trends are more reflective of consumers increasingly choosing the maxed-out loan term lengths despite vehicle prices remaining steady. 'It's clear that buyers are pulling the few levers they can control to manage affordability, whether that's by taking on longer loans, financing more or putting less money down — even if some of those decisions increase their total costs," said Drury, Edmunds' director of insights. Drury said the tariffs have not yet directly driven up second-quarter prices but, "they're certainly not going to make things any easier for shoppers moving forward.' Edmunds' data also showed that bigger loans are becoming the new normal with the average amount financed for new vehicles climbing to $42,388 in the quarter, again an all-time high, up from $40,873 in the year-ago quarter. In the quarter, the average new car loan term was 69.8 months with a 7.2% annual percentage rate, up from 69 months with a 7.3% APR a year ago. The average monthly payment was $756 compared with $740 a year ago. To make matters worse, 0% finance deals accounted for 0.9% of new-vehicle loans, the lowest share Edmunds has on record since 2004 and down from 2.9% a year ago. In case you missed it: Buying a new car? Why you might want to abide by the 20% rule If you think used vehicles are considerably less, think again. In the second quarter, the average loan length taken on a used car was 69.7 months, that's flat compared with the year-ago quarter. The average APR was 10.9%, down from 11.5% a year earlier. Yet the average monthly payment was $7 higher at $559 compared with a year earlier. That's because the average amount financed rose to $29,080 from $28,166 and the average down payment dropped to $4,092 from $4,140. Edmunds said new-vehicle buyers, like used-car shoppers, put less money down in the quarter. Edmunds' data showed the average down payment for new car purchases in the quarter was $6,433 compared with $6,579 a year earlier. While extended loan terms may offer easier monthly payments, Edmunds analysts caution there could carry long-term consequences. 'Consumers need to keep in mind the risks associated with a loan extended that far into the future, including increased costs for upkeep down the line and the risk of being underwater on the loan if the car is traded in before it's paid off,' said Joseph Yoon, Edmunds' consumer insights analyst. 'If payments on a more standard 60- or 72-month loan don't fit your budget, you might consider leasing." Yoon said even though a lease does not allow a buyer to build equity in the vehicle the way a purchase does, it gives a buyer time to get their finances in better shape with lower monthly payments. At Village Ford, owner Jim Seavitt offers 84-month loan terms, but he does not encourage customers to take it if possible. He said about 10% of his 170 new car sales each month are for 84-month-long loans and he hopes to keep that rate low. About 5% of his sales result in monthly car payments of $1,000 or more a month, but those are usually for high-end Ford Expedition SUVs or F-Series pickups. In June, he said, just four sales resulted in $1,000 monthly car payments. Logemann, dealer principal at Gordon Chevrolet in Garden City and Gordon Chevrolet in Florida, said because so many car buyers lease new vehicles in Detroit and there are a lot of Detroit Three automaker employees buying cars there, Detroit tends to have lower monthly payments than other parts of the country. But at the store in Florida, he said the monthly car payments are noticeably higher and more customers are extending the loan terms to get their payment down. "We are seeing more 84-month loans than we have historically. Most people are looking in that 72- to 84-month loan term," Logemann told the Detroit Free Press, part of the USA TODAY Network. "Part of it is to lower the monthly payment. The other part is that the quality of the vehicles is much higher, so the ownership time horizon for the customer might be a little longer now because they have confidence in the car." Customers still come to the table with adequate down payments, he said, noting: "The two big things we do in our lives is we buy a house and we buy a car. I still see people saving for those items." If the customer is going to own the vehicle for an extended-term loan, Logemann said it's more important than ever that dealers provide a customer with a "top-level experience" so that they return for service during those years. Logemann said despite broad uncertainty around tariffs and the economy, both of his stores had "solid" vehicle sales in the quarter and strong revenue in the service lane, prompting him to add, "The consumer, at this point, is fairly healthy." Jamie L. LaReau is the senior autos writer who covers Ford Motor Co. for the Detroit Free Press. Contact Jamie at jlareau@ Follow her on Twitter @jlareauan. To sign up for our autos newsletter. Become a subscriber. This article originally appeared on Detroit Free Press: Car loan monthly payments hit record for buyers at $1,000 or more
The Guardian
06-07-2025
- Automotive
- The Guardian
More than 23m Britons think they may be due compensation for mis-sold car loans, UK poll finds
More than 23 million people believe they could be due compensation for a mis-sold car loan, according to a poll before this month's supreme court decision. Borrowers, banks and the government are anxiously awaiting the ruling, which could trigger one of the biggest redress schemes since the £50bn payment protection insurance (PPI). The PPI saga forced UK banks to compensate people who had bought often worthless insurance cover. The survey, conducted for the consumer law firm Slater and Gordon, found that 45% of people think they might be entitled to a payout over a car finance plan taken out between 2007 and 2021. The car loans scandal has been rumbling on for more than a year, but ballooned in October when a court of appeal judgment vastly expanded a Financial Conduct Authority (FCA) investigation into potentially harmful commission arrangements. It determined that paying a secret commission to car dealers, which had arranged the loans without disclosing the sum and terms of the commission to borrowers, was unlawful. Lenders including Santander UK, Close Brothers, Barclays and Lloyds are potentially on the hook for up to £44bn, according to some analysts. The FCA is working on a potential compensation scheme under which lenders that mis-sold loans would check their records and decide who gets compensation. The public's expectations of compensation are high, according to the survey. Of the 4,000 people surveyed, 45% believed they were likely to be eligible for money back, which equates to more than 23 million adults across the UK. Forty per cent said they would consider a legal challenge if dissatisfied with the outcome of their claim. Consumers also showed little trust in the ability of banks and lenders to check records and distribute compensation. There are also concerns that some consumers could miss out because most banks purge customer data after six years. The FCA ordered lenders to cease doing so in January 2024, when it launched the investigation, but files relating to customers with contracts that ended more than six years earlier may have already been lost. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion The chief operating officer of Slater and Gordon, Elizabeth Comley, said the public rightly expected to be compensated for their losses. 'The FCA is trying put things right, but there's a risk that a redress scheme leaves many people disappointed and keen to challenge the process,' she said. 'That sort of backlash would be bad for everyone – the scandal would drag on for years, the courts would be inundated with challenges and the public would be denied the clear resolution they want.'
Car and Driver
03-07-2025
- Automotive
- Car and Driver
Senate Bill Aims to Reduce Tax on Loan Interest for U.S.-Built Cars
The U.S. Senate passed the One Big Beautiful Bill on Tuesday, which contains a proposed tax deduction for new car loans. The deduction would only apply to cars with final assembly in the United States and doesn't include fleet sales or commercial vehicles. The bill also has provisions to reduce the deductible amount for taxpayers who have an adjusted gross income of more than $100,000. The latest version of the One Big Beautiful Bill contains a provision that aims to reduce thousands of dollars in interest on new car loans for taxpayers. The United States Senate passed the tax and policy bill on Tuesday, sending it back to the House of Representatives for final approval, which President Donald Trump wants to happen before July 4. Along with accelerating the removal of federal EV tax credits, the act contains a section titled "No Tax on Car Loan Interest." The proposed deduction isn't as straightforward as that title, however, with a number of caveats. The biggest qualifier is that the vehicle being purchased "shall not include any vehicle the final assembly of which did not occur within the United States," according to the currently available text of the bill. This requirement that the car be built in the U.S. ties in with President Trump's goal to increase domestic automotive manufacturing, which he has so far attempted to instigate through hefty tariffs on imported vehicles. While some automakers have since invested in increased U.S. production, many popular vehicles are still produced overseas and imported into the United States. NurPhoto | Getty Images The bill also states that applicable vehicles are those that are "manufactured primarily for use on public streets, roads, and highways" and are "a car, minivan, van, sport utility vehicle, pickup truck, or motorcycle." The vehicle must have a gross vehicle weight rating of under 14,000 pounds, and the loan cannot be for fleet sales or "a commercial vehicle that is not used for personal purposes." The bill also excludes loans to finance vehicles with a salvage title or vehicles that are going to be used for parts. There are also exceptions based on the income of the taxpayer who is leasing the vehicle. The deductible amount will be reduced by $200 for every $1000 that the adjusted gross income of the taxpayers exceeds $100,000. For jointly filed tax returns, the threshold is $200,000 of income. The proposal also covers a maximum of $10,000 in interest for each taxable year. According to the , the only buyers who could receive the maximum deduction are those with new car loans of $110,000 or higher. The publication quoted Jonathan Smoke, an economist at market research firm Cox Automotive, who said that just one percent of loans in the U.S. are over that mark. Instead, the average car loan is around $43,000, with Smoke telling the Times that average buyers will be see a $3000 reduction in the first year of a six-year loan, although most buyers would only receive a roughly $500 reduction in the first year, and that the amount would shrink with each subsequent year. The bill still needs to be approved by the House before it can be signed into law by the president, and President Trump has expressed a desire to pass the bill by July 4. Caleb Miller Associate News Editor Caleb Miller began blogging about cars at 13 years old, and he realized his dream of writing for a car magazine after graduating from Carnegie Mellon University and joining the Car and Driver team. He loves quirky and obscure autos, aiming to one day own something bizarre like a Nissan S-Cargo, and is an avid motorsports fan.
Fox News
27-06-2025
- Automotive
- Fox News
Trump wins over lifelong Democrat autoworker with 'big, beautiful bill' vehicle loan tax benefit
President Donald Trump recognized a third-generation autoworker from Michigan Thursday while speaking at the "big, beautiful event," noting he was a lifelong Democrat who now supports the president because of vehicle loan interest tax benefits. The president spoke about the "big, beautiful bill" from the East Room of the White House with a group of people standing behind him who represented various trades, including food delivery, farmers and automotive workers. One of the workers standing behind Trump was James Benson, a third-generation autoworker from Belleville, Michigan, who has been with Ford Motor Company for 26 years. Trump introduced Benson, noting that Ford has "a lot of plants" in the U.S. "If you have plants in this country, you're going to make a lot of money," the president said, adding that he loves autoworkers. Trump also said Benson was a lifelong Democrat until 2017, when he saw the benefits of the tax laws. Trump then spoke about his latest plan to benefit car owners by making interest on car payments fully tax-deductible. But the deduction would only be for cars made in the U.S., Trump said, adding if it was made someplace else, "we don't care." Trump's "big, beautiful bill" would create a new deduction of up to $10,000 for qualified passenger vehicle loan interest in a given taxable year. The deduction would phase out when a taxpayer's modified adjusted gross income exceeds $100,000. Applicable passenger vehicles include cars, trucks, vans, SUVs and motorcycles that have been manufactured for use on public streets, roads and freeways and for which the final assembly occurs in the U.S. The bill defines the final assembly as the process by which the manufacturer produces a vehicle and delivers it to a dealer with all the parts necessary for operation. As is the case with the overtime and tips deductions, the auto loan provision would be in effect for tax years 2025 through 2028. Trump reiterated to those in attendance that the tax benefit is only for vehicles made in the U.S. "Remember that, James. We're going to keep those Michigan auto factories roaring," the president said.
