Ford's darkest day in 5 years

[enzia35]

I got killed today in the market.

[SS 1LE]

Originally Posted by motorhead

Yep, it is falling apart again and it was never fixed the first time. Too many people walk this earth living way above their means, with businesses and governments pushing them to do so

72 to 84 months on a car is insane. My wife is a banker ,and they always had the feeling that if you need to take a 60 month loan on a car it's more then you should really be buying.

I wish everyone got the chance to own their own business for just one year. Then they would find out quickly what true needs are over wants. They wouldn't look at just the monthly payment either.

The longer terms aren't just so people can "afford" a more expensive car though. One of my family members is the GM at a car dealer and people are keeping their cars (not niche cars, "regular" ones) for less time now. In some cases only two or three years, and this is a BMW dealer. Many just do a longer term as they can offer (if your credit is good) a similar APR. They just want a lower monthly payment for a few years until they trade it in for a new one. They don't care that they have less paid off, as they still will get some cash back towards the next car, and they do it agian. I kinda see why people do it, and in the long run I guess it works for them. Would I do it, no, but differnt strokes for different folks...

[Royal Tiger]

Wouldn't a lease with scheduled maintenance included be better than buying in that scenario?

[mt3130]

My bank offers the same interest rate for any car loan of 72 months or less (1.75%). Taking advantage of this allows me put away a few hundred extra dollars each month. The increase in my portfolio value far exceeds the few hundred extra dollars in interest I pay over the life of the loan.

A lot of finance people will encourage people that are good with their money to finance things for the longest period of time possible. Interest rates typically get higher as the terms get longer, so there's definitely diminishing returns with this theory. I put an example below to show how minimal the extra interest is:

$25k loan over 36 months @ 2%: $716 per month, total interest of $778
$25k loan over 72 months @ 2%: $369 per month, total interest of $1,551

You are freeing up $347 of cash each month ($4,164 per year) at the price of an extra $773 over the life of the loan in interest ($128 per year). I know that interest declines the further you get into the term, so the math isn't perfect.

Its the same reason why financial experts will recommend investing your money instead of paying off your home mortgage if the market is yielding returns that are higher than your mortgage rate.

[clanky]

Originally Posted by davidscamaro

Yeah the GM commercials are getting bad too, at least the 6th gen camaro add is just classic style show the car driving fast and sexy

As far as commercials go. Dodge dominates this playing field, they have some of the best commercials that are actually worth watching. I recently saw a Toyota commercial that was trying very hard to copy Dodge's take on doing commercials. Take Dodge's Predator video for example. Very good as is there Brother's racing commercials.

[Normagene]

Originally Posted by khell86

Ford's finance's profit was down 21% from rising delinquencies. It's happening to everyone. Inflation is sky rocketing and people are being dumb and taking out huge 72 and 84 month loans just so they can afford a nice car. Eventually the shit's going to hit the fan again.

Read in one of my car magazines that once the Ford plant in Mexico is up and running Ford will save between 75/80% on payroll. That's millions, instant profit, in Fords pocket.

Think about that, instead of paying your American employees between 30/40 $ an hour, plus all kinds of extras like insurance, vacation, etc., the Mexican employees will be paid $6 an hour with minimal benefits.

Then those vehicles will be sold in the U.S. for the same prices, maybe even a little less to knock off the competition. Pretty obvious what will happen next...... All automotive manufactures will follow.

[SS 1LE]

Originally Posted by mt3130

My bank offers the same interest rate for any car loan of 72 months or less (1.75%). Taking advantage of this allows me put away a few hundred extra dollars each month. The increase in my portfolio value far exceeds the few hundred extra dollars in interest I pay over the life of the loan.

A lot of finance people will encourage people that are good with their money to finance things for the longest period of time possible. Interest rates typically get higher as the terms get longer, so there's definitely diminishing returns with this theory. I put an example below to show how minimal the extra interest is:

$25k loan over 36 months @ 2%: $716 per month, total interest of $778
$25k loan over 72 months @ 2%: $369 per month, total interest of $1,551

You are freeing up $347 of cash each month ($4,164 per year) at the price of an extra $773 over the life of the loan in interest ($128 per year). I know that interest declines the further you get into the term, so the math isn't perfect.

Its the same reason why financial experts will recommend investing your money instead of paying off your home mortgage if the market is yielding returns that are higher than your mortgage rate.

Valid points for sure.

What bank do you have that offers a flat 1.75%? Mine does 1.9% last I checked, but that was like a year ago. I thought that was really good. My credit it over 800, so I don't have an issue there. This time I am going to shop around and not necessarily use the dealer to finance the difference. I will be putting down somewhere between 1/3 to 1/2 the cost of the car. I may see what some local credit unions would offer me and I'll just bring that to the dealer...humm.

[mt3130]

Originally Posted by SS 1LE

Valid points for sure.

What bank do you have that offers a flat 1.75%? Mine does 1.9% last I checked, but that was like a year ago. I thought that was really good. My credit it over 800, so I don't have an issue there. This time I am going to shop around and not necessarily use the dealer to finance the difference. I will be putting down somewhere between 1/3 to 1/2 the cost of the car. I may see what some local credit unions would offer me and I'll just bring that to the dealer...humm.

Its the local credit union. They do 1.75% with the asterisk that you have to do auto-pay. If not, then the rate is 1.9% or something like that. Still really low.

[khell86]

Originally Posted by mt3130

My bank offers the same interest rate for any car loan of 72 months or less (1.75%). Taking advantage of this allows me put away a few hundred extra dollars each month. The increase in my portfolio value far exceeds the few hundred extra dollars in interest I pay over the life of the loan.

A lot of finance people will encourage people that are good with their money to finance things for the longest period of time possible. Interest rates typically get higher as the terms get longer, so there's definitely diminishing returns with this theory. I put an example below to show how minimal the extra interest is:

$25k loan over 36 months @ 2%: $716 per month, total interest of $778
$25k loan over 72 months @ 2%: $369 per month, total interest of $1,551

You are freeing up $347 of cash each month ($4,164 per year) at the price of an extra $773 over the life of the loan in interest ($128 per year). I know that interest declines the further you get into the term, so the math isn't perfect.

Its the same reason why financial experts will recommend investing your money instead of paying off your home mortgage if the market is yielding returns that are higher than your mortgage rate.

Oh I understand why those who have the means take out the longer loans. The problem is that those who don't use these longer terms just to get the car they want and its biting them in the ass. Most are probably buying outside of their means of course, but the problem is that while wages are stagnant, car prices continue to rise and rise.

[khell86]

Originally Posted by Normagene

Read in one of my car magazines that once the Ford plant in Mexico is up and running Ford will save between 75/80% on payroll. That's millions, instant profit, in Fords pocket.

Think about that, instead of paying your American employees between 30/40 $ an hour, plus all kinds of extras like insurance, vacation, etc., the Mexican employees will be paid $6 an hour with minimal benefits.

Then those vehicles will be sold in the U.S. for the same prices, maybe even a little less to knock off the competition. Pretty obvious what will happen next...... All automotive manufactures will follow.

Most already do that to an extent. Tons of car companies have plants in Mexico. Ford has most of their smaller cheaper vehicles made there with their more expensive vehicles made in the US. What's funny is that japanese/korean car companies that have plants in the US because of exchange rates.

[SS 1LE]

Originally Posted by mt3130

Its the local credit union. They do 1.75% with the asterisk that you have to do auto-pay. If not, then the rate is 1.9% or something like that. Still really low.

Which one, I see you're in FL as well...

[mt3130]

Originally Posted by SS 1LE

Which one, I see you're in FL as well...

Suncoast

[Thor142]

Originally Posted by Normagene

Read in one of my car magazines that once the Ford plant in Mexico is up and running Ford will save between 75/80% on payroll. That's millions, instant profit, in Fords pocket.

Think about that, instead of paying your American employees between 30/40 $ an hour, plus all kinds of extras like insurance, vacation, etc., the Mexican employees will be paid $6 an hour with minimal benefits.

Then those vehicles will be sold in the U.S. for the same prices, maybe even a little less to knock off the competition. Pretty obvious what will happen next...... All automotive manufactures will follow.

Well lets face it. Paying an assembly line worker $40 an hour for doing a menial task is as smart as paying a burger flipper $15/hr. Of course corporations are going to look for alternatives. Don't worry the Mexicans will lose their $7 an hour jobs too once everything is automated.

[SS 1LE]

Originally Posted by mt3130

Suncoast

Thanks. I have one local, I will have to look into them when the time comes.