🧑‍🤝‍🧑 / 🏡 Geez. Look at the financing on a new '2024' Ram 2500

[TerryP]

I say "new." It has six thousand on the odometer reading: a demo, perhaps?

When I was in my bank branch the other day I believe I remember seeing a rate advertised at 5.34 percent. I'm guessing one would need to be in the 700's to qualify and even then it might be a bit of a crap shoot depending on their history.

There is no freakin' way I'd do this. N.O.N.E.

 

[It Takes Eleven]

It's math. The rate suggests the borrower doesn't have strong credit. With today's rates, I believe you'd need to be north of 780 to get that lowest rate you mentioned. The longer you finance something - in this case seven years or 84 months - the more the interest rate matters. If they could afford to pay over five years, the interest paid would decline by about a third. Push it out to 15 years and you'd pay as much interest as the amount financed. That's why I think one of the best moves you can make as a consumer is to get into a 15 year mortgage over a 30. You typically get a lower rate, and you pay down so much quicker and gain equity.

Back to the truck, paying over $100,000 for a truck isn't a necessity. It's a 2500, and MSRP on base Rams run from 50 to mid 60's. Either this guy is buying an absolutely loaded truck, or - more likely - he was upside down in his prior vehicle and they tacked it on to the balance. Another reason for the high rate.

 

[TerryP]

he was upside down in his prior vehicle and they tacked it on to the balance. Another reason for the high rate.

I didn't even think about that. I'd bet you're right,

With today's rates, I believe you'd need to be north of 780 to get that lowest rate you mentioned.

Welp. It's been a minute since I've looked but I know I'm not there.

 

[sean]

It's math. The rate suggests the borrower doesn't have strong credit. With today's rates, I believe you'd need to be north of 780 to get that lowest rate you mentioned. The longer you finance something - in this case seven years or 84 months - the more the interest rate matters. If they could afford to pay over five years, the interest paid would decline by about a third. Push it out to 15 years and you'd pay as much interest as the amount financed. That's why I think one of the best moves you can make as a consumer is to get into a 15 year mortgage over a 30. You typically get a lower rate, and you pay down so much quicker and gain equity.

Back to the truck, paying over $100,000 for a truck isn't a necessity. It's a 2500, and MSRP on base Rams run from 50 to mid 60's. Either this guy is buying an absolutely loaded truck, or - more likely - he was upside down in his prior vehicle and they tacked it on to the balance. Another reason for the high rate.

Fools like that are ALWAYS in over their head on everything. They'll have a job making less than $25k/year, but have a new vehicle, a big-ass TV, latest computer/game console, new shoes every couple/few weeks, new clothes every couple months...and then wonder why they're always broke or they're always getting hassled by creditors calling about late payments. And their vehicle will be financed with a high-as-hell interest rate, and they'll actually be paying for 2 or 3 others at the same time due to the amount still owed on them when they bought a "new" one.