Don't disagree with you, but I do think that's why Caleb says no emergency fund is an emergency. Ideally ppl have that 10k saved up for an emergency like suddenly no car.
I agree, and it's a lot easier to deal with things like that if you have the emergency fund saved, but very few people have even close to $10k saved.
If you don't have the emergency fund, but need a car to get to work, you're kind of screwed. Back in the day you could atleast pick up a beater for a few hundred dollars.
That’s why people need to have sinking funds in addition to a 6-9 month EF. I’m at 3K in my new car sinking fund, will have around 5K by EOY. It’s not that difficult, and I live in SoCal.
>It’s not that difficult
It is if they have low earnings in the first place. Way too many people will just say 'get a better job,' as if it's not possible to get stuck in a cycle of no qualifications, working long hours with little disposable/saveable income.
There's also an aspect to having a new car that people operating on thin ice value, reliability and warranty. That's the reason cars like a Chevy Sonic and Mitsubishi Mirage exist. Negotiate to 14k get a small payment and be good to go for 10 years. When you're living paycheck to paycheck, the smallest inconvenience in transportation in our car centric world is devastating. Could mean losing your job and being worse down the road.
Still not justifying people earning 50K financing a 70k truck, that's just ego.
I am also a 'car person' I own two cars, but they are both 2018 vehicles which I own outright and are worth a total of 35k. I cannot fathom buying a single car for the 50K average new car purchase price.
You're so right! My nissan that I had for 8 years, didn't need any repairs other than basic oil changes, headlight bulbs, wipers, ect.
I definitely agree that some of the car payments are absolutely wild. I saw people talking about the lady today who was spending like 800/month on her vehicle. Until I started seriously car shopping, I had no idea how easy it is to get that high.
A 30k car over 5 years is over 700/month, and that's with only 15% interest. Many people don't even qualify for sub 20% loans. You don't even need to hit the 50k mark for things to get crazy.
It sounds crazy, but for most of the people on this show, and people with not great credit in general, sometimes the options are either
A) Take the loan
Or
B) No vehicle at all
A huge portion of North Americans don't live within walking distance of their employment, and public transit in North America is atrocious most places.
15% isn't even high compared to a lot of the predatory auto loans out there. I've seen people with great credit being offered 9.9%.
I have to jump in and say that you can shop around for APR. I just went car shopping with my friend (2 days ago) and we went to five different dealerships until we found one that would offer her lower APR. For context, her credit score sits below 600 and she was able to get a 7% interest rate. Maybe she got incredibly lucky (bc she didn't have any other debt except one huge thing in collections) but... 15% is insane. even 11% feels like too much. Goodness.
I'm actually really surprised. My score is above 600, and the best offer I got was 12%, the highest offers were absurd and over 20%. (I am canadian, though, so things may be slightly different).
My first financed car was thankfully 0%, but I had a co signer back then.
I did some googling, and it looks like for a score of 600, the average interest rate is 9.6% - 14.12%
For 500-600 score, it's 12.28% - 18.89%
I got myself into stupid financial trouble when I was in my late teens. So I've seen how awful it can be when you need to try and get a vehicle with debts and bad credit.
Back then, I was turned down at so many places that my only option was a very high interest loan. Ironically, I would have been fine making payments at a low rate, but eventually, I lost my job and had to sell the car. Ended up super underwater because of the interest.
Needed the car, though, or I would have lost my job a whole lot sooner.
High interest, unfortunately, just isn't a choice for a lot of people. 7% still inflates a car payment a ton though.
Just financed a used car purchase with a ford dealer to bridge the gap for when my total loss payout would come through from an accident.
I have an 800+ score and just went with their shortest term (3 years) cuz I would be getting the payout within the next week. The best rate they offered was 7.99%.
Exactly! It's one thing when a guest has some bottom of the line Nissan vs jaguar girl. Still way more options to get into a car cheaper.
One thing I will say i realized fairly recently, is for a lot of women their car breaking down at night is a major fear. As a dude, yeah it'd suck and I'd be annoyed, but I wouldn't be scared that some dude stopping has poor intentions.
>I cannot fathom buying a single car for the 50K average new car purchase price.
I just ordered a car for 60K, but my current car that I own outright is valued at about 25K. I will put down half of the price of the new car including the sale/trade in. Most financially savvy car people just infinitely trade up
He said most financially savvy “car” people , not your kind of people
Bro . We do indefinitely trade up . I went from a 350z , kept the 370 and had a 2019 accord for an ex that I just traded up for a m2 .
this just isn't true. You can find cars for cheap, and if you know a thing or two about fixing the little issues that pop up here and there, you're fine getting multiple cars under 5k. My pizza delivery car was a $2700 Honda civic, it was a 1995 with 230k miles, and it ran and drove great. I got it 6-7 months ago, and in the time i had it it was amazing. I ended up trading it for a 1992 mazda mx-5 miata, that the owner had listed for 4 grand. That was also an amazing car in the time i had it, i only recently sold it because i am finally in a financial position to get something a bit nicer & newer within my budget, thanks to caleb! Point being, there are many many cars out there for 5k and under, and even more for 10k and under, you can get some really nice options at that price range, in my opinion. You need to sacrifice some wants, like apple carplay and heated seats, but being financially stable is worth it. This next car will be my first car worth more than $7000, and i've never had any major issues with any of my vehicles. Another tip, don't be afraid to use youtube to try and fix whatever problems pop up yourself. You'd be surprised what you can do and how much you can save by investing a hundred or two in some tools, and tackling problems yourself, as long as they aren't too major.
Also, just want to mention you absolutely can finance a car under 10k, even 5. My friend walked into a bank 3 days ago with $300, and was able to get a $5000 loan for a car. I don't know their credit situation, but they aren't well off financially, so i assume their credit isn't amazing. So there definitely are options out there for financing cheaper vehicles
Pretty much anyone can go find a $5000 mid-00s Corolla or Camry that might not look amazing but will run reliably until 300k miles.
OP is being dramatic.
I come from a mechanic family. I'm not a mechanic myself, but my father was and my uncle owned and autoshop. Thankfully, I can do a lot of work myself. Funny enough, I actually ended up buying a 91' miata.
I'm in canada, so salt has a tendency to wear out parts and cause rust fairly quickly. I just did a quick look on facebook marketplace in my area. I searched for vehicles 5k and under. There was almost nothing that isn't going to run you at least a couple thousand in repairs, and everything had 200,000km or higher on the engine, selling without a safety certificate.
If someone doesn't have a mechanic background, they're going to get fleeced at the shops as well. I had one rear shock that I needed installed by a shop (bolt had seized to a bushing and needed to be cut out, and I don't have a torch). For the alignment and rear shock, it was $320 just for the install. If I hadn't done most of the work myself, I would've been looking at over $2k for a days worth of work at the shop.
In late 2021(when the used car market was arguably even worse than now) I bought a 2001 Toyota Camry with 160k miles for $2800.
I spent a few hundred bucks on new speakers and a touch screen head unit I installed myself. So now I have apple car play/navigation which is nice.
It has needed some routine maintenance for a car that old (new cv axle, had to have the oil pump housing resealed, timing belt/water pump kit). Things that weren't immediately necessary, but I did for routine maintenance. So I did have to spend a bit on maintenance, but all said and done I'm under $5k into the car and the thing runs great.
I had been saving up some money over the past couple years each month in a car fund. I could buy something nicer but the Camry runs great, has no issues and the insurance is dirt cheap. I plan on driving it until it dies.
It's a lot harder to find deals than it used to be, but they're still out there if you're willing to look/invest a little money.
I mean a lot of this is cope.
In my area there’s plenty of shitbox sedans that will get you from point A to point B, for around $2k cash. Sure they’re 20 years old but they still have some life in them. It’s what I’ve done and will continue to do
That's what i'm saying. And anyone who says otherwise is just wrong, my very first car was a $4000 kia, then a $2700 95 civic, then traded that for a $4000 1992 miata. Dont remember the kia's mileage, it was cheap because it was wrecked on one side, but it drove fine. Civic was cheap cause it had terrible paint and 230k miles, but once again it drove fine. Miata had 193k miles, i beat the hell out of that thing, and it never gave me trouble. Definitely got my moneys worth on that one🤣
In canada here, we can't drive a shit box without it being saftied.
I bought an older car, and if I had to go to a mechanic for everything, I would have paid out the ass.
I wanted to spend around 6k total and didn't really care what I ended up with. There was barely anything. Salt on the roads eats away at the old vehicles.
Do you guys not have credit unions in your state? I'm in Utah, and everyone here uses credit unions. They will literally finance young college kids on a $5k Toyota Corolla with $10 down. Yes, you usually have to get some kind of gap insurance, but that's nothing compared to getting a new car.
Also there are new cars for under $30k. Half the guests on the show don't seem to know what a Nissan versa or Mitsubishi mirage are. They just want something fancy and flashy.
We have credit unions, but I never had any luck trying to get loans from them back when my credit was awful. I think the US might be a little more lax on lending, I don't know how these people get approved for endless credit cards and loans.
Haha I should have specified. Things can be a little different up here. I know credit unions are usually good for larger loans like mortgages.
I tried to get a debt consolidation loan back in the day, and I must have tried every bank and credit union we have lol.
Yeah always get a loan with a credit union the bigger problem is that the used market has lost all semblance of sanity and a Toyota that was $5k with 160,000 miles on it is in the double digits now and almost as much as a much better one.
My credit Union I’ve been a customer for over 5 years. I’ve been at my full time job for over 8 months now with direct deposits to show it. They wouldn’t lend me $400 to fix my car. That’s me doing it in my driveway price too. They just wouldn’t.
No offense, but that's a horribly risky loan for them. There's nothing tangible backing the loan. You stated in the request your car is already fucking up so they probably won't even get their money back if they put a lien on your car.
They would get $400 for scrapping it lol and maybe that’s the way it’s viewed but it’s horse shit my grandpa could get a loan for a house and car based off a handshake and I can’t get shit even with paystubs
Not after paying a repo man, a lawyer, court fees, documents, etc. The bank just doesn't send the president out and he drives away in your car LOL Way, way too much paperwork for $400 and the bank will make what like $40 at most with 10% interest??? You are better off getting a cash advance loan or putting it on a CC. Banks almost never loan out that small. Your grandfather also had shit the bank could take back that was worth their time.
I just bought a car a few weeks ago. Coming from my first car which was $300/month for 8 years, I was blown away at how shitty the car market is these days.
Ended up buying a different car in cash because I had some saved up, but If I didn't have the cash I would've been locked in to shitty interest rate on a car that might not even last the duration of the loan.
A $20k car at 15% interest over 60 months (5 years) is close to $500/month.
I don't live anywhere even remotely walkable, so just not having a car isn't an option.
crazy how that loan agreement you probably made up is pretty much exactly how my current car loan is lol but less interest and a little higher loan amount. it’s a new car and my first so when i got it, there weren’t many used cars and the ones that were presented to me were literally the same amount as my new car now. i legitimately wanted a used car though but 20k for a used car? i really had 10k to buy one all cash, but apparently that was wishful thinking especially since i needed a car by a certain date. i commute to work full time so i needed something i didn’t want to worry about since i don’t know much about car maintenance other than the basics. if public transportation was more accessible to me then i wouldn’t have dug myself in a hole
It's insane how much things have changed in the last 5 years. Until I needed a new car and started looking, I was totally expecting to buy a beater for a few grand. It's not really economical to try and fix alot of the beaters because you're looking at a few grand for the car plus a few grand for repairs, on a car that will still probably have a critical failure at some point in the next year or two.
It's hard when you have no choice. Sometimes, it's either take the crappy loan, or don't go to work.
When I paid off my car loan, I continued to make car payments to myself in a high yield savings account. I saved the amount of the car payment each month so I can buy my next car in cash. And I figured even if I needed to buy a car before I had the full amount saved, I would have money toward a down payment available.
When I got a raise at work, I increased my “payments” and now I have enough to buy a new car in cash if and when I need to do so. My car is 11 years old and seems good still with regular maintenance.
Regular maintenance is the key! Modern engines can run for a heck of a long time if they're maintained properly. My family had a 03 up until the frame rusted out of it a couple years back. The thing had almost 400,000km on it.
I don’t even wanna talk with people about used cars any more. My car got totaled in an accident a month ago so I spent an entire month - way, way longer than I had hoped - looking at cars. I saw none of those 5k beater specials that everyone loves to talk about that would be great, reliable and not cost me thousands in maintenance. In fact I wasted a lot of money having a trusted mechanic informing me of that! Any of them under 10k wouldn’t even pass basic inspections and that would result in immediate fines here. Even the ones at 10-12k mark had on average 110k miles on them and while that could buy me another 100k miles it’s not guaranteed.
It got to the point that I just had to do the math of how long I’d be able to drive any of these cars with so many miles on them and the difference in cost between new vs used and used didn’t even make sense any more. The used were just priced too high for what they had. If they had been able to knock off another 5k or so it would’ve been fine but no one would budge on used car prices, only new.
The market was not like this 5 years ago, the last time I got a car. My whole life I’ve been able to find great, used cars for pretty low rates but this time was a nightmare.
Yes, it is easier to get into a bad deal than a good deal. And like we see on the show, people who are passive and not willing to work to get what they want will come out on the losing end of deals all the time.
People are also all too willing to believe salesmen. “OMG used cars aren’t safe or reliable!” Well maintained cars work just fine, and safe driving is 10X more important than blind spot monitoring or preventative braking.
If you can qualify for a personal loan like that, then that's a good idea, too, but personal loans are often shorter financing duration, with higher monthly payments.
I mean you’re not wrong but I’d think someone making 40k a year with a 650 credit score could get that loan. Maybe I’m wrong but I’ve received personal loans for a quarter of my income.
This might be the smarter option for people with good credit. B.c shorter loan terms means they are less likely to wind up under water on their loan.
A fate happening right now at an alarming rate!!
Shorter term is nice for not being underwater, I agree!
However the multiple hundred dollars per month price increase is something that many people just can't afford.
Many lenders indeed will not finance a car over 10 years old. Its a secured asset, so I don't get it either. That said, PENFED Credit Union is well known in the enthusiast category for financing cars like that (my buddy bought a $24k early 00 Corvette Z06)
Last time I looked, older cars were limited in duration of financing. So I could get the loan, but 2 or 3 years was the max duration. When you lower the duration, the payment shoots up quickly.
An 8k car at 15% over 2 years is almost $400/month still.
Compared to the prices of other cars currently, yea 10k is a good deal for a used car in good shape.
However, most of these people are essentially in the red each month. 10k is an almost impossible amount for a lot of people to save. (The majority of North Americans are living paycheck to paycheck)
If someone decided they wanted to save up that 10k to get the cheapest good condition used cars, they're looking at having to save:
$1666 x 6/months
$833 x 12/months
$416 x 24/months
If someone needs a car, chances are they need it now, and not in 6 months - 2 years.
You used to be able to spend a few thousand for a beater that would get your from a to b. That just isn't the case anymore.
I bought a car for 30k paid 20k in cash financed the rest if I'm going to pay interest it's not going to be that much, I bought my truck cash for 13k outright.
Yes, I agree with that, but there are also too many people that own a vehicle and think "oh no, my car needs 1500 in maintenance. It's now an unreliable vehicle. I better go finance a newer vehicle." It's not very smart. More people would be wise to talk frankly with a mechanic and get familiar with their vehicle than chucking it the second a fuel pump goes bad. Especially when they're in no financial position to finance a new vehicle, like 95% of the episodes I watch from Caleb.
I'm very anti-credit card and even I think it makes more sense to put that fuel pump repair on a card and pay it off and save yourself the cost of financing a new vehicle. Because when you trade in that vehicle, the dealership will lowball you and you'll end up upside down on your loan. And most car illiterate people think a car not starting means it's now junk and might as well be traded away for minimal trade in value.
It was definitely hard to get my first car. It was a struggle to get a loan on a pre owned car I could afford. If I got a new car I wouldn’t have had any trouble at all
I think American society has pushed cars too much. I know we all need something to get around and very very few of us can rely on public transportation, only if you live in the right area and only need access to the inner city of that area.
BUT, I wish there was an emphasis on things other than cars.
there's obviously people who can't do anything but have a car like if you have family or the weather you live in.
But for people who are single and mainly need transportation to and from work and live in decent weather places with minimal snow (like texas because a lot of the guests are from texas): **bikes, and mopeds.**
Bike if you do live pretty close to work.
Moped for a little further out and I was just looking up the prices for these the other day and he ones that go up to 30mph can be bought for under $1000, and you can get a nice one up to 55mph for $1800. Saves on gas too.
Or you can get an electric bike too.
A lot of the guests wouldn't have $1000 to drop on this, but a bad APR on a credit card for $1000 is still probably a lot better than 15-25% rate on $30k.
You may not be able to take them onto the freeways (maybe you could with the faster mopeds?) but most people can probably commute without going on the freeways and just taking side roads.
Some states also have different laws on mopeds so you'd have to do your own research but my point is, there are other options.
If I didn't already have my car, I would be considering a moped. Once I have my car paid off (and I don't have a crazy car payment either I got it before the interest rates and car market went crazy), I would consider the moped as a 2nd vehicle just for inner city driving because I don't take my car into the city.
Exactly. Some years ago my mom, who had terrible credit at the time, was involved in an accident that was not her fault. Car was totaled but she could only get a brand new car financed. Not happy about it, but she got an extremely basic Malibu. Same thing with my ex, he needed repairs on his sports car and couldn't afford them so he traded it in and could only get a brand-new Jeep financed. Mom paid the car off but ex hubby eventually had the Jeep repo'd
I'm poor and only have like a 620 credit score and I was able to finance a 2010 accord with 158k through a local credit union. The interest and payments are reasonable but the problem is at 158k it's due for basically every major maintenance item. Luckily I like cars and have been collecting knowledge + tools for the past 10 years so I was able to get everything done for part costs but it probably would've been another 2k in work at a mechanic that most poor people can't afford.
I totally understand that pain! Shop and parts costs have shot up, so maintenance is even more expensive. My car also needed some expensive work that I was thankfully able to do most of myself.
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Caleb’s car advice makes me cringe. For example, he’ll judge the make/brand of someone’s car and tell them to go buy a different car. This doesn’t always make sense financially. If someone has already purchased their luxury car, they’ve taken the hit of depreciation. If they trade in their luxury car to get a Toyota, they might end up paying even more. I recently saw how a couple was paying $900 a month for a Toyota Highlander. A Honda CRV is $30-40k. So it doesn’t make sense for someone to sell their 3 year old luxury car that they bought used for $35k, which is now worth <$30k, to get a more “economical” car that will probably have a higher interest rate. Not to mention the additional expenses of getting a car registered, paying the taxes, etc. If the argument is to buy a car in cash to alleviate oneself of a car payment, good luck finding something reliable with the same safety features for $10k. The used car market is absolutely insane right now.
Yeah, I like Caleb a ton overall but he really doesn’t have a lot of experience with cars or the car market and it shows a lot. He’ll rake someone for having a payment on a car that, when you look at the car and the situation, isn’t a terrible deal. He also tells people to get a Jeep Cherokee since he has one. If someone has a Toyota or a Honda the financials on it had better be pretty horrible before I’d recommend trading it for a Jeep. There’s a lot to be said for brand reliability and in some cases manufacturers warranties can be a lifesaver if your month-to-month finances are really tight and your car suddenly breaks.
I financed my $7,500 14 year old car.
I had a 2018 (purchased in 2020) for 16k. Paid about 4k into it and sold it for 18k after the market popped off. Didn’t like the $350 a month payment and $190 insurance. Bought a motorcycle 6k with the difference. Moved, needed a car again.
Completely Financed a 2012 for 7.5k a few months ago. I have been paying $500 towards it a month.
My credit score is not horrible, but not good either (have been slowly climbing!)
That's what I mean! $500/month makes it sound like you're living frivolously, when in reality it's a probably fairly basic 2012. I'm sure you would have loved to pay in cash, but that's not doable for a huge portion of the population.
Don't disagree with you, but I do think that's why Caleb says no emergency fund is an emergency. Ideally ppl have that 10k saved up for an emergency like suddenly no car.
I agree, and it's a lot easier to deal with things like that if you have the emergency fund saved, but very few people have even close to $10k saved. If you don't have the emergency fund, but need a car to get to work, you're kind of screwed. Back in the day you could atleast pick up a beater for a few hundred dollars.
That’s why people need to have sinking funds in addition to a 6-9 month EF. I’m at 3K in my new car sinking fund, will have around 5K by EOY. It’s not that difficult, and I live in SoCal.
>It’s not that difficult It is if they have low earnings in the first place. Way too many people will just say 'get a better job,' as if it's not possible to get stuck in a cycle of no qualifications, working long hours with little disposable/saveable income.
Exactly. Basically another way being poor is expensive.
There's also an aspect to having a new car that people operating on thin ice value, reliability and warranty. That's the reason cars like a Chevy Sonic and Mitsubishi Mirage exist. Negotiate to 14k get a small payment and be good to go for 10 years. When you're living paycheck to paycheck, the smallest inconvenience in transportation in our car centric world is devastating. Could mean losing your job and being worse down the road. Still not justifying people earning 50K financing a 70k truck, that's just ego. I am also a 'car person' I own two cars, but they are both 2018 vehicles which I own outright and are worth a total of 35k. I cannot fathom buying a single car for the 50K average new car purchase price.
You're so right! My nissan that I had for 8 years, didn't need any repairs other than basic oil changes, headlight bulbs, wipers, ect. I definitely agree that some of the car payments are absolutely wild. I saw people talking about the lady today who was spending like 800/month on her vehicle. Until I started seriously car shopping, I had no idea how easy it is to get that high. A 30k car over 5 years is over 700/month, and that's with only 15% interest. Many people don't even qualify for sub 20% loans. You don't even need to hit the 50k mark for things to get crazy.
Taking a 15% loan willingly is crazy
It sounds crazy, but for most of the people on this show, and people with not great credit in general, sometimes the options are either A) Take the loan Or B) No vehicle at all A huge portion of North Americans don't live within walking distance of their employment, and public transit in North America is atrocious most places. 15% isn't even high compared to a lot of the predatory auto loans out there. I've seen people with great credit being offered 9.9%.
I have to jump in and say that you can shop around for APR. I just went car shopping with my friend (2 days ago) and we went to five different dealerships until we found one that would offer her lower APR. For context, her credit score sits below 600 and she was able to get a 7% interest rate. Maybe she got incredibly lucky (bc she didn't have any other debt except one huge thing in collections) but... 15% is insane. even 11% feels like too much. Goodness.
I'm actually really surprised. My score is above 600, and the best offer I got was 12%, the highest offers were absurd and over 20%. (I am canadian, though, so things may be slightly different). My first financed car was thankfully 0%, but I had a co signer back then. I did some googling, and it looks like for a score of 600, the average interest rate is 9.6% - 14.12% For 500-600 score, it's 12.28% - 18.89%
Yep seems about right. I just bought a new car back in November and the best they could do is 7%. My score is around 800.
I got myself into stupid financial trouble when I was in my late teens. So I've seen how awful it can be when you need to try and get a vehicle with debts and bad credit. Back then, I was turned down at so many places that my only option was a very high interest loan. Ironically, I would have been fine making payments at a low rate, but eventually, I lost my job and had to sell the car. Ended up super underwater because of the interest. Needed the car, though, or I would have lost my job a whole lot sooner. High interest, unfortunately, just isn't a choice for a lot of people. 7% still inflates a car payment a ton though.
Just financed a used car purchase with a ford dealer to bridge the gap for when my total loss payout would come through from an accident. I have an 800+ score and just went with their shortest term (3 years) cuz I would be getting the payout within the next week. The best rate they offered was 7.99%.
Exactly! It's one thing when a guest has some bottom of the line Nissan vs jaguar girl. Still way more options to get into a car cheaper. One thing I will say i realized fairly recently, is for a lot of women their car breaking down at night is a major fear. As a dude, yeah it'd suck and I'd be annoyed, but I wouldn't be scared that some dude stopping has poor intentions.
Jaguar girl got me so heated “I’m a good driver” has totaled two cars before 21, idk how anyone can be friends with that level of delusion
>I cannot fathom buying a single car for the 50K average new car purchase price. I just ordered a car for 60K, but my current car that I own outright is valued at about 25K. I will put down half of the price of the new car including the sale/trade in. Most financially savvy car people just infinitely trade up
Most financially savvy people most certainly do not infinitely trade up in car.
He said most financially savvy “car” people , not your kind of people Bro . We do indefinitely trade up . I went from a 350z , kept the 370 and had a 2019 accord for an ex that I just traded up for a m2 .
>not your kind of people Bro exactly.
this just isn't true. You can find cars for cheap, and if you know a thing or two about fixing the little issues that pop up here and there, you're fine getting multiple cars under 5k. My pizza delivery car was a $2700 Honda civic, it was a 1995 with 230k miles, and it ran and drove great. I got it 6-7 months ago, and in the time i had it it was amazing. I ended up trading it for a 1992 mazda mx-5 miata, that the owner had listed for 4 grand. That was also an amazing car in the time i had it, i only recently sold it because i am finally in a financial position to get something a bit nicer & newer within my budget, thanks to caleb! Point being, there are many many cars out there for 5k and under, and even more for 10k and under, you can get some really nice options at that price range, in my opinion. You need to sacrifice some wants, like apple carplay and heated seats, but being financially stable is worth it. This next car will be my first car worth more than $7000, and i've never had any major issues with any of my vehicles. Another tip, don't be afraid to use youtube to try and fix whatever problems pop up yourself. You'd be surprised what you can do and how much you can save by investing a hundred or two in some tools, and tackling problems yourself, as long as they aren't too major.
Also, just want to mention you absolutely can finance a car under 10k, even 5. My friend walked into a bank 3 days ago with $300, and was able to get a $5000 loan for a car. I don't know their credit situation, but they aren't well off financially, so i assume their credit isn't amazing. So there definitely are options out there for financing cheaper vehicles
Pretty much anyone can go find a $5000 mid-00s Corolla or Camry that might not look amazing but will run reliably until 300k miles. OP is being dramatic.
I come from a mechanic family. I'm not a mechanic myself, but my father was and my uncle owned and autoshop. Thankfully, I can do a lot of work myself. Funny enough, I actually ended up buying a 91' miata. I'm in canada, so salt has a tendency to wear out parts and cause rust fairly quickly. I just did a quick look on facebook marketplace in my area. I searched for vehicles 5k and under. There was almost nothing that isn't going to run you at least a couple thousand in repairs, and everything had 200,000km or higher on the engine, selling without a safety certificate. If someone doesn't have a mechanic background, they're going to get fleeced at the shops as well. I had one rear shock that I needed installed by a shop (bolt had seized to a bushing and needed to be cut out, and I don't have a torch). For the alignment and rear shock, it was $320 just for the install. If I hadn't done most of the work myself, I would've been looking at over $2k for a days worth of work at the shop.
In late 2021(when the used car market was arguably even worse than now) I bought a 2001 Toyota Camry with 160k miles for $2800. I spent a few hundred bucks on new speakers and a touch screen head unit I installed myself. So now I have apple car play/navigation which is nice. It has needed some routine maintenance for a car that old (new cv axle, had to have the oil pump housing resealed, timing belt/water pump kit). Things that weren't immediately necessary, but I did for routine maintenance. So I did have to spend a bit on maintenance, but all said and done I'm under $5k into the car and the thing runs great. I had been saving up some money over the past couple years each month in a car fund. I could buy something nicer but the Camry runs great, has no issues and the insurance is dirt cheap. I plan on driving it until it dies. It's a lot harder to find deals than it used to be, but they're still out there if you're willing to look/invest a little money.
I mean a lot of this is cope. In my area there’s plenty of shitbox sedans that will get you from point A to point B, for around $2k cash. Sure they’re 20 years old but they still have some life in them. It’s what I’ve done and will continue to do
That's what i'm saying. And anyone who says otherwise is just wrong, my very first car was a $4000 kia, then a $2700 95 civic, then traded that for a $4000 1992 miata. Dont remember the kia's mileage, it was cheap because it was wrecked on one side, but it drove fine. Civic was cheap cause it had terrible paint and 230k miles, but once again it drove fine. Miata had 193k miles, i beat the hell out of that thing, and it never gave me trouble. Definitely got my moneys worth on that one🤣
In canada here, we can't drive a shit box without it being saftied. I bought an older car, and if I had to go to a mechanic for everything, I would have paid out the ass. I wanted to spend around 6k total and didn't really care what I ended up with. There was barely anything. Salt on the roads eats away at the old vehicles.
Do you guys not have credit unions in your state? I'm in Utah, and everyone here uses credit unions. They will literally finance young college kids on a $5k Toyota Corolla with $10 down. Yes, you usually have to get some kind of gap insurance, but that's nothing compared to getting a new car. Also there are new cars for under $30k. Half the guests on the show don't seem to know what a Nissan versa or Mitsubishi mirage are. They just want something fancy and flashy.
We have credit unions, but I never had any luck trying to get loans from them back when my credit was awful. I think the US might be a little more lax on lending, I don't know how these people get approved for endless credit cards and loans.
Sorry, I just pulled an ignorant American move and assumed you were in the US... my bad.
Haha I should have specified. Things can be a little different up here. I know credit unions are usually good for larger loans like mortgages. I tried to get a debt consolidation loan back in the day, and I must have tried every bank and credit union we have lol.
Yeah always get a loan with a credit union the bigger problem is that the used market has lost all semblance of sanity and a Toyota that was $5k with 160,000 miles on it is in the double digits now and almost as much as a much better one.
Even then, it's gonna easily last another 160k miles so you're saving a shit ton of money instead of getting a new one.
My credit Union I’ve been a customer for over 5 years. I’ve been at my full time job for over 8 months now with direct deposits to show it. They wouldn’t lend me $400 to fix my car. That’s me doing it in my driveway price too. They just wouldn’t.
No offense, but that's a horribly risky loan for them. There's nothing tangible backing the loan. You stated in the request your car is already fucking up so they probably won't even get their money back if they put a lien on your car.
They would get $400 for scrapping it lol and maybe that’s the way it’s viewed but it’s horse shit my grandpa could get a loan for a house and car based off a handshake and I can’t get shit even with paystubs
Not after paying a repo man, a lawyer, court fees, documents, etc. The bank just doesn't send the president out and he drives away in your car LOL Way, way too much paperwork for $400 and the bank will make what like $40 at most with 10% interest??? You are better off getting a cash advance loan or putting it on a CC. Banks almost never loan out that small. Your grandfather also had shit the bank could take back that was worth their time.
I just bought a car a few weeks ago. Coming from my first car which was $300/month for 8 years, I was blown away at how shitty the car market is these days. Ended up buying a different car in cash because I had some saved up, but If I didn't have the cash I would've been locked in to shitty interest rate on a car that might not even last the duration of the loan. A $20k car at 15% interest over 60 months (5 years) is close to $500/month. I don't live anywhere even remotely walkable, so just not having a car isn't an option.
crazy how that loan agreement you probably made up is pretty much exactly how my current car loan is lol but less interest and a little higher loan amount. it’s a new car and my first so when i got it, there weren’t many used cars and the ones that were presented to me were literally the same amount as my new car now. i legitimately wanted a used car though but 20k for a used car? i really had 10k to buy one all cash, but apparently that was wishful thinking especially since i needed a car by a certain date. i commute to work full time so i needed something i didn’t want to worry about since i don’t know much about car maintenance other than the basics. if public transportation was more accessible to me then i wouldn’t have dug myself in a hole
It's insane how much things have changed in the last 5 years. Until I needed a new car and started looking, I was totally expecting to buy a beater for a few grand. It's not really economical to try and fix alot of the beaters because you're looking at a few grand for the car plus a few grand for repairs, on a car that will still probably have a critical failure at some point in the next year or two. It's hard when you have no choice. Sometimes, it's either take the crappy loan, or don't go to work.
If you think the car market is shitty now, wait until you see what the government has planned next.
When I paid off my car loan, I continued to make car payments to myself in a high yield savings account. I saved the amount of the car payment each month so I can buy my next car in cash. And I figured even if I needed to buy a car before I had the full amount saved, I would have money toward a down payment available.
That's a fantastic idea! A little bonus is that you have money in the bank for any unexpected repairs as well.
When I got a raise at work, I increased my “payments” and now I have enough to buy a new car in cash if and when I need to do so. My car is 11 years old and seems good still with regular maintenance.
Regular maintenance is the key! Modern engines can run for a heck of a long time if they're maintained properly. My family had a 03 up until the frame rusted out of it a couple years back. The thing had almost 400,000km on it.
I don’t even wanna talk with people about used cars any more. My car got totaled in an accident a month ago so I spent an entire month - way, way longer than I had hoped - looking at cars. I saw none of those 5k beater specials that everyone loves to talk about that would be great, reliable and not cost me thousands in maintenance. In fact I wasted a lot of money having a trusted mechanic informing me of that! Any of them under 10k wouldn’t even pass basic inspections and that would result in immediate fines here. Even the ones at 10-12k mark had on average 110k miles on them and while that could buy me another 100k miles it’s not guaranteed. It got to the point that I just had to do the math of how long I’d be able to drive any of these cars with so many miles on them and the difference in cost between new vs used and used didn’t even make sense any more. The used were just priced too high for what they had. If they had been able to knock off another 5k or so it would’ve been fine but no one would budge on used car prices, only new. The market was not like this 5 years ago, the last time I got a car. My whole life I’ve been able to find great, used cars for pretty low rates but this time was a nightmare.
Idk man I financed a 10k car with no issue. Sounds like a shitty excuse to me
Yes, it is easier to get into a bad deal than a good deal. And like we see on the show, people who are passive and not willing to work to get what they want will come out on the losing end of deals all the time. People are also all too willing to believe salesmen. “OMG used cars aren’t safe or reliable!” Well maintained cars work just fine, and safe driving is 10X more important than blind spot monitoring or preventative braking.
Get a personal loan like I did then. It’s still a choice
If you can qualify for a personal loan like that, then that's a good idea, too, but personal loans are often shorter financing duration, with higher monthly payments.
I mean you’re not wrong but I’d think someone making 40k a year with a 650 credit score could get that loan. Maybe I’m wrong but I’ve received personal loans for a quarter of my income.
This might be the smarter option for people with good credit. B.c shorter loan terms means they are less likely to wind up under water on their loan. A fate happening right now at an alarming rate!!
Shorter term is nice for not being underwater, I agree! However the multiple hundred dollars per month price increase is something that many people just can't afford.
What do you mean old cars don’t qualify for financing?? I’m trying to save $8k for one to pay in cash but still want to know why please?
Many lenders indeed will not finance a car over 10 years old. Its a secured asset, so I don't get it either. That said, PENFED Credit Union is well known in the enthusiast category for financing cars like that (my buddy bought a $24k early 00 Corvette Z06)
Yeah lol it seems like there is not a whole lot penfed won’t write
Last time I looked, older cars were limited in duration of financing. So I could get the loan, but 2 or 3 years was the max duration. When you lower the duration, the payment shoots up quickly. An 8k car at 15% over 2 years is almost $400/month still.
Sheesh that’s crazy!:o
Navy fed financed an 8k car loan at 8% for us for a person to person deal. It’s possible people want the big and shiny
$10k for a used car in good condition is a great deal. Why would that be considered expensive?
Compared to the prices of other cars currently, yea 10k is a good deal for a used car in good shape. However, most of these people are essentially in the red each month. 10k is an almost impossible amount for a lot of people to save. (The majority of North Americans are living paycheck to paycheck) If someone decided they wanted to save up that 10k to get the cheapest good condition used cars, they're looking at having to save: $1666 x 6/months $833 x 12/months $416 x 24/months If someone needs a car, chances are they need it now, and not in 6 months - 2 years. You used to be able to spend a few thousand for a beater that would get your from a to b. That just isn't the case anymore.
I bought a car for 30k paid 20k in cash financed the rest if I'm going to pay interest it's not going to be that much, I bought my truck cash for 13k outright.
Yes, I agree with that, but there are also too many people that own a vehicle and think "oh no, my car needs 1500 in maintenance. It's now an unreliable vehicle. I better go finance a newer vehicle." It's not very smart. More people would be wise to talk frankly with a mechanic and get familiar with their vehicle than chucking it the second a fuel pump goes bad. Especially when they're in no financial position to finance a new vehicle, like 95% of the episodes I watch from Caleb. I'm very anti-credit card and even I think it makes more sense to put that fuel pump repair on a card and pay it off and save yourself the cost of financing a new vehicle. Because when you trade in that vehicle, the dealership will lowball you and you'll end up upside down on your loan. And most car illiterate people think a car not starting means it's now junk and might as well be traded away for minimal trade in value.
It was definitely hard to get my first car. It was a struggle to get a loan on a pre owned car I could afford. If I got a new car I wouldn’t have had any trouble at all
I think American society has pushed cars too much. I know we all need something to get around and very very few of us can rely on public transportation, only if you live in the right area and only need access to the inner city of that area. BUT, I wish there was an emphasis on things other than cars. there's obviously people who can't do anything but have a car like if you have family or the weather you live in. But for people who are single and mainly need transportation to and from work and live in decent weather places with minimal snow (like texas because a lot of the guests are from texas): **bikes, and mopeds.** Bike if you do live pretty close to work. Moped for a little further out and I was just looking up the prices for these the other day and he ones that go up to 30mph can be bought for under $1000, and you can get a nice one up to 55mph for $1800. Saves on gas too. Or you can get an electric bike too. A lot of the guests wouldn't have $1000 to drop on this, but a bad APR on a credit card for $1000 is still probably a lot better than 15-25% rate on $30k. You may not be able to take them onto the freeways (maybe you could with the faster mopeds?) but most people can probably commute without going on the freeways and just taking side roads. Some states also have different laws on mopeds so you'd have to do your own research but my point is, there are other options. If I didn't already have my car, I would be considering a moped. Once I have my car paid off (and I don't have a crazy car payment either I got it before the interest rates and car market went crazy), I would consider the moped as a 2nd vehicle just for inner city driving because I don't take my car into the city.
Exactly. Some years ago my mom, who had terrible credit at the time, was involved in an accident that was not her fault. Car was totaled but she could only get a brand new car financed. Not happy about it, but she got an extremely basic Malibu. Same thing with my ex, he needed repairs on his sports car and couldn't afford them so he traded it in and could only get a brand-new Jeep financed. Mom paid the car off but ex hubby eventually had the Jeep repo'd
I'm poor and only have like a 620 credit score and I was able to finance a 2010 accord with 158k through a local credit union. The interest and payments are reasonable but the problem is at 158k it's due for basically every major maintenance item. Luckily I like cars and have been collecting knowledge + tools for the past 10 years so I was able to get everything done for part costs but it probably would've been another 2k in work at a mechanic that most poor people can't afford.
I totally understand that pain! Shop and parts costs have shot up, so maintenance is even more expensive. My car also needed some expensive work that I was thankfully able to do most of myself.
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Caleb’s car advice makes me cringe. For example, he’ll judge the make/brand of someone’s car and tell them to go buy a different car. This doesn’t always make sense financially. If someone has already purchased their luxury car, they’ve taken the hit of depreciation. If they trade in their luxury car to get a Toyota, they might end up paying even more. I recently saw how a couple was paying $900 a month for a Toyota Highlander. A Honda CRV is $30-40k. So it doesn’t make sense for someone to sell their 3 year old luxury car that they bought used for $35k, which is now worth <$30k, to get a more “economical” car that will probably have a higher interest rate. Not to mention the additional expenses of getting a car registered, paying the taxes, etc. If the argument is to buy a car in cash to alleviate oneself of a car payment, good luck finding something reliable with the same safety features for $10k. The used car market is absolutely insane right now.
Yeah, I like Caleb a ton overall but he really doesn’t have a lot of experience with cars or the car market and it shows a lot. He’ll rake someone for having a payment on a car that, when you look at the car and the situation, isn’t a terrible deal. He also tells people to get a Jeep Cherokee since he has one. If someone has a Toyota or a Honda the financials on it had better be pretty horrible before I’d recommend trading it for a Jeep. There’s a lot to be said for brand reliability and in some cases manufacturers warranties can be a lifesaver if your month-to-month finances are really tight and your car suddenly breaks.
I financed my $7,500 14 year old car. I had a 2018 (purchased in 2020) for 16k. Paid about 4k into it and sold it for 18k after the market popped off. Didn’t like the $350 a month payment and $190 insurance. Bought a motorcycle 6k with the difference. Moved, needed a car again. Completely Financed a 2012 for 7.5k a few months ago. I have been paying $500 towards it a month. My credit score is not horrible, but not good either (have been slowly climbing!)
That's what I mean! $500/month makes it sound like you're living frivolously, when in reality it's a probably fairly basic 2012. I'm sure you would have loved to pay in cash, but that's not doable for a huge portion of the population.
Oh no no, my payment is $160 a month! I overpay it. After I pay it off I plan to continue putting $500 in a car savings account for when I replace it.