I work in an office job that sometimes requires me to see the actual deals that are worked out at some of the car dealerships that use our product. Yesterday I nearly gagged when I realized someone out there is paying $74,400 for a Ford Expedition.
Here is how you make a cruddy car deal:
– Buy a 2009 Chevy Tahoe for a “reasonable” amount in 2008.
– Make the minimum payments on that Tahoe.
– Decide you rather have a 2011 Ford Expedition.
– Ignore the fact that your Tahoe is upside down (isn’t worth as much as you owe) by $13,000.
– Roll that $13,000 debt into your new Expedition deal at 5.5% interest for 5 years.
– a $50,000 Expedition plus $13,000 of leftover debt spread over 5 years at 5.5% equals a
$1240 monthly car payment and that’s not even including the auto insurance rates tacked on top of that which could easily put it over $1500
That is almost $75,000 over 5 years!
Unless that Ford freaking flies, I have no idea why this buyer signed on the dotted lines!
I have seen bad deals and good deals and serviceable deals. I’ve even seen deals where they’ll at least throw in some cheap car tires to sweeten the deal. I constantly roll my eyes when I see an service contract added on that cost a third of what a buyer paid. I have not seen a deal that looked like this before.
It wasn’t hidden. All the costs were fully disclosed. The buyer signed right next to the $63,000 total and again on the contract that listed the loan terms and the $74,400 total after payments.
It was all legit.
And people wonder why they are barely making ends meet on $250,000 a year…
What do you think? Does a $75,000 SUV sound like a great idea to you?