By on December 29, 2017

Yesterday I talked about the worst kind of subprime lenders and how they misused the courts to collect their profits. There was a broad spectrum of reader response, including a few people who felt compelled to discuss the fact that Hillary Clinton won the popular vote and therefore won the presidency. (To which I can only respond: that’s like awarding the Super Bowl win to the team with the most rushing yards.)

Here’s what we didn’t discuss: our own experiences with subprime loans and/or bad car deals. I suspect that there are some members of the B&B who have never so much as walked by a subprime lender; I also suspect that there are plenty of readers who are currently in a subprime situation right now but don’t want to admit it.

So for today, let’s consider two topics: a) What’s the worst car deal you ever made? and b) did you ever use a subprime source? I’ll start, of course.

Looking back at the twenty-five or so new cars I’ve bought since 1990, I have to say that most of them were bought as close to the proverbial bone as possible. Which makes sense; after years of selling cars and financing them, I should have a pretty good idea about how to buy one. That doesn’t mean that I was always perfect. In 2005, I decided that I wanted a VW Phaeton. My local dealer didn’t have one in stock and the best deal they were willing to make me was $1,500 off sticker for a dealer-traded example. That was a garbage deal, to put it mildly, but I didn’t think too much about it. The second Phaeton I got was capitalized at $54,000 against a sticker of $65,600 for a lease payment of $510 a month. I’d say that balances it out but in the final analysis I was still dumb enough to have two Phaetons.

When it comes to motorcycles, I haven’t been quite as sharp. In 1996 I decided that I wanted a new Yamaha FZR600. I was pretty tapped-out, credit-wise, at the time and I didn’t have a ton of income. I did have a paid-off ’86 Jaguar Vanden Plas but like most twenty-four-year-old men I felt that I was entitled to a new sportbike and a Jaguar. So I went to the shady Yamaha dealer in Grove City, Ohio and told him to get me bought no matter what. He came back with a purchase price of $4,999 and 36 months at 24.59% via “The Loan Zone”.

“Sounds good to me,” I said.

“Absolutely not,” my wife at the time said. So much for my Yamaha dreams. I had to wait until April of 2000 to buy a new sportbike, and that time I did it with cash. Still, I kind of wish I’d taken the Loan Zone deal. I would have had three more years to ride a relatively decent bike instead of suffering with my 1975 Honda CB550, which at the time did not yet have any hipster credentials. It’s bad to lose money on a deal; it can be worse to lose time.

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69 Comments on “QOTD: What Was The Worst Beating You Ever Took?...”

  • avatar

    Only 25% interest? Might have been cheaper to put the whole thing on a credit card…

    I’ve never really had a truly bad deal when it came to financing, just a few times when I probably paid more than I should have. Current car loan has “gap insurance” on it but then again I had just come off a divorce and foreclosure caused by same divorce.

    • 0 avatar

      Credit is so crazy nowadays. Cash advance the $5000 from a credit card at 0% interest for 18 months for a one-time fee of 1-3% ($50-$150). If you need more than 18 months to pay it off, flip it to another card for 1-3% of what’s left. That’s a three year loan for only $100-$200.

      It’s cheaper than a home equity loan (4+%), and you don’t have to talk to another human being at any point. You can do it online in under 10 minutes, and you don’t have to put your house up. Things must be really messed up when this shadiness is the smart move by far.

    • 0 avatar

      25% would have been usurious.

      But 24.59%? That’s fine. Perfectly legal.

      The worst hit I ever took was on my Lotus Esprit V8 twin turbo.

      I bought it, shipped it up, did a ton of work (professionally and myself), and sold it 8 months later because I couldn’t stand the attention associated with it (try buying milk or getting gas in one of them, I dare you). Lost about $8,000 all in.

  • avatar

    Back in 83, I was in the Navy and wanted a bike, got a used Kawi LTD 550. Loan rate in Norfolk for 22 year old with no credit? 33%, I paid that off as quick as I could.

  • avatar
    S2k Chris

    I’ve always lived in the era of cheap credit and captive financing, so never gotten a bad deal from that perspective.

    However, my wife traded in a mint 2000 Cherokee Classic with 48k miles on it on a new Liberty Limited in 2005, and they gave her $4500 for the Cherokee. That Cherokee is worth more than $4500 TODAY, with 100k more miles on it.

    That one stings.

    • 0 avatar

      Ouch! I think Cherokees have about bottomed out and are beginning to appreciate, too. I wouldn’t hold my breath on the Liberty.

    • 0 avatar
      Firestorm 500

      Don’t weep for the Cherokee. Those (the 2000 and 2001 year models) had a factory-flawed head that cracks between the #3 and #4 valve pockets. Very few owners would realize that. The coolant gets into the oil and bearings and wipes them out.

      It’s not a maybe in this case. It’s a when.

    • 0 avatar

      I had a similar case. My wife made me trade in my ’06 Dodge Magnum SXT for a ’16 Jeep Patriot 4×4. The “dealer” was pressuring me into a deal that day “I was tying up a sales person”. They “gave” me $3K for it with 150K miles. However, after I signed, I could only account for $1500. The other half appears to have been “magically” eaten up in new fees that were added before closing. I didn’t notice this till later. They sold my Magnum for $6K about 2 weeks later. (FYI: the dealer is no longer in business. It was bought up by a larger group less then a year later)

      Funny thing is, I purchase a ’16 200s used in January. I told this story to my salesperson. He pulled a notebook from his desk and showed me a list of customers looking for Dodge Magnums. He told me that he would have easily given me $3K-$4K for it a year later.

      I hated (and still hate) this POS. It’s been mechanically great, but it’s uncomfortable and cramped. I dumped it back on my wife about a month later.

      • 0 avatar

        ” The “dealer” was pressuring me into a deal that day “I was tying up a sales person”.”


        My response to that is always, and without exception: “If you have to have an answer right now, then the answer is always ‘no’.”

        • 0 avatar

          If the deal is THAT GOOD, they’ll find a way to offer the same tomorrow, or over the weekend!

          Otherwise, I give ‘em a one-finger salute as I walk out the door!

  • avatar

    Never used a subprime lender, but made two very bad car deals in my lifetime.

    The first was the purchase of my ’89 Taurus SHO. I bought it from a shady used car dealer in late 1997 with a number of obvious issues that a 68k-mile car shouldn’t have had. But I was blinded by want and paid a price appropriate for a car in good condition. The extra $1000 or so would have paid the first couple of the many repair bills that car subjected me to over the years.

    The second was a lease of an ’06 Honda Civic. We had a ticking time bomb ’88 Accord that was rusting through and had several impending expensive mechanical issues. There was only one manual Civic EX in the Boston area at the time. The terrible-as-usual Honda salesman foursquared me and I ended up signing for $330/month when I didn’t even fully understand the numbers. That was about $50/month too much; I should have walked away. That deal taught me to understand all of the numbers and always have multiple options on new car transactions.

    • 0 avatar
      Stanley Steamer

      Let me guess….Herb Chambers?

    • 0 avatar

      Interesting. I ordered a new car in the Boston area in the very recent past myself after consulting 4 dealers.

      The initial Chambers price was approximately 3% off MSRP. That wasn’t exactly what I was looking for, as there was an Audi club discount of 6% right off the top. After I brought this up, it only took the sales rep about 10 minutes to scroll through his screen of options and conclude I was right about eligibility.

      That discussion happened in parallel with two other dealer visits that netted offers up to 10% off with less than 15 minutes of back and forth. I can’t say the process was entirely fun, but I don’t feel so bad about not calling back the first guy to see if he could do better.

      It appears some things may not change much.

  • avatar

    The people involved in subprime car loans are such obscure companies as GM, Chrysler, and Ford. These will hit the economy and hit it hard when they come to default.

    During the real estate subprime crisis, the most venal of the subprime lenders were fronts funded by such obscure companies as Goldman Sachs, Wells Fargo and jp Morgan Chase. This wealthy backing was handy, because as state AGs closed in, they could close and open quickly under new names.

    So yes, you are probably doing business with sub-prime lenders, you just don’t know it, or you just don’t care.

    • 0 avatar

      Wow, I didn’t know it was only American car companies doing such. Better to stick with Nissan and Mitsubishi instead, huh?

      And a $30k car loan is exactly the same as a $300k house loan? Wow.

    • 0 avatar

      I know FMCC has shied away from subprime lending, they use to have Fairlane Credit as a subprime arm but got rid of it in the early 2000s. I haven’t worked there since then, they may have brought it in-house.

    • 0 avatar

      “So yes, you are probably doing business with sub-prime lenders, you just don’t know it, or you just don’t care.”

      I just picked up a new GTI, and decided to finance some of it. Capital One, 1.86%. That’s pretty much same as cash. I have no idea how anyone in the chain is making money from me.

      So yeah, whoever’s supplying the money, I just don’t care.

  • avatar
    Felix Hoenikker

    In 1982, I took out a car loan at a local bank for something like 9% interest however all interest was deductible on federal income taxes then so the effective rate was only about 6.3%. Inflation rate and salary raises were also much higher then so the loan became a smaller fraction of income each year. I would size the loan to be around $200 a month for no more than 36 months. That was the highest interest that I ever paid on a car loan.
    Interest rates are so low compared to historical norms that I was able to get a 36 month loan at 1% from my local credit union on my last car purchase in 2014. To me that was free money given the inflation rate is 1.5-2% these days. If you are paying more than 4% these days, you probably have credit issues.

  • avatar
    Sam Hall

    I might be taking my worst beating right now, but time will tell.

    Back when I was hunting for my first house, at the height of the bubble around 2006, I read a ‘for dummies’ book about mortgages. At the time I was going to grad school in urban planning. Between those two things, I realized that “interest-only loans” were directly giving up the benefits of the FHA mortgage and going back to the days when nobody ever paid off (or really owned) a house, because they had to refinance it every 3-5 years.

    Talking to my friends who were also house hunting, but not doing their homework, it became clear that people were listening to whatever a mortgage broker wanted to tell them and taking no account whatsoever of this person’s incentive set.

    Therefore, I’ve always sought out my own financing, tried when possible to compete banks against each other for the best terms, and have never stepped foot into a subprime situation.

    Why might I be there now? Because on my most recent car, a Ford Escape, I bought the extended warranty and prepaid maintenance plan. I did that because it made a small difference in the payment and thus seemed like cheap insurance (my previous car was a Focus with the DCT). Will this pay off? I drive a lot of miles and have little elasticity in my schedule to deal with downtime, plus Obamacare is stretching my cashflow. So I had become a payment shopper. If I can get 6-8 years out of this vehicle hopefully my position will be better next time around.

    That got me looking deeper into the various methods of finance, and a

  • avatar

    “…few people who felt compelled to discuss the fact that Hillary Clinton won the popular vote and therefore won the presidency”

    I have news for these people. In America, the electoral college elects president and not the people. In other words, states elect president, not the general population. Hence so-called “popular vote” is just a statistic, mostly mentioned by losing side.

    The beating… I managed to never have a car loan. So, never a beating.

  • avatar

    “a few people who felt compelled to discuss the fact that Hillary Clinton won the popular vote and therefore won the presidency.”

    AKA people who have never studied US history to understand why the popular vote was purposely NOT used to elect the president.

  • avatar

    Last January I was looking to sell my old ’05 Nissan Quest van that was starting to have a lot of issues and get into something newer and more reliable. I settled on a CPO ’12 Buick Enclave from Seymour Buick in Venice, Fl. I paid over $18k for it and began having nothing but trouble with it and the dealer from day one, including…

    -a finance department that somehow screwed up the paperwork so that, basically, my plates were invalid (luckily, no cops noticed), and my loan information was not processed properly until TWO MONTHS after I bought it.
    -a rat’s nest under the hood that I noticed once I began to smell burning on my way home from dealer
    -four trips to service for a leaky moonroof (that was never fixed properly) and disconnected drain tube (careless mechanic)
    -clunking coming from suspension that no one could diagnose (turned out to be a bad strut bushing) this took 4 trips to the dealer before it was rectified
    -bad transmission control module
    -IN-OP backup camera
    -broken seatbelt latch
    -leaking power steering rack
    -door trim falling off
    -bad O2 sensor
    -front and rear AC evaporators leaking

    The Enclave spent more time at the service dept than my driveway. Literally.

    Less than a year after buying it and faced with the prospect of paying out of pocket since the CPO warranty was almost up, I drove it to the nearest Toyota dealer, took a $4k hit on trade-in and bought a low-mileage one-owner CPO Highlander. Best decision ever.
    Goodbye, GM.

  • avatar

    All of my bad financial decisions involve things that are not transportation related.

  • avatar

    I have managed never to take a car loan. Been hurt by VAG via 5000, 90S, and A8L. It’s enough to keep me away from them for a while, but not enough that I dislike Audis.

    And in the grand scheme none of those was especially catastrophic, I was just a young man in expensive German cars.

  • avatar

    There is a line in movie Gambler when John Goodman tells Mark Wholberg character about F you status in life. It goes something like have half a million in the bank, own your house, don’t over drink and then you can tell the world F you. Do what you want then.

    Looking at Atlantic off Tybee, thinking of Stingray and Mustang GT in garage and the Grand Cherokee I parking lot, while having fresh shrimp at Nortaode grill on Tybee, contemplating getting my gorgeous woman a Tahoe RST, F150 or Tacoma or 4 runner, I say get your life in order first, then enjoy the fruits and follow John goodman’s F you mentality.

    • 0 avatar
      Jack Baruth

      That’s a nice cautious philosophy for nice, cautious men.

      • 0 avatar

        It comes down to this:

        1. Take the red pill, buy that V8 or V12 useless German vehicle (Phateon?) and faster motorcycle when you are in your 20s or 30s and then ask forgiveness/permission from your wife when buying that 6.2 Silverado…


        2. Take the blue pill, put that 500-600 payment in a 401k when you were in your 20s or 30s, and now instead of asking forgiveness from your wife to buy chariot of choice, buy her the chariot of choice and tell the world F you

        The choice is (was) yours.

        • 0 avatar

          Or 3. Do 2. and die of a heart attack young and never get to enjoy life at all.

          I prefer something between the extremes. Buy a very modest house(es), have some money in the bank, don’t reproduce, and buy whatever I damned well please for a car because compared to houses and kids cars cost nothing. Even German ones.

          My worst car deal was my only Porsche (so far), which I paid cash for. A low miles, beautiful condition ’87 924S. Even had a PPI done on it by a shop near the vendor. But it turns out all those tales about cars that have sat too much are correct, as are the tales of the “Porsche Tax”, as are the tales of how utterly miserable 924S’s are to turn a wrench on. I sold it a year later for about 1/3rd of what I paid for it, luckily a sum only equivalent to what you lose driving a new Accord off the dealer’s lot. But far and away the very worst automotive financial experience of my life. Even my ’82 Volvo 245T that was a used up heap of crap got me two years of transportation and I sold it for 2/3rds of what I paid for it. The Porsche got me about 300 miles…

          The highest interest rate I have ever had was 10%, on my ’85 Jetta 2dr, which I bought in ’88 for $4500 with 17K miles on it. Deal of the century. I sold it to a buddy four years later with 150K for $2500, and it was utterly bulletproof along the way. As was the ’84 VW GLI that replaced it. Kept that one for more than 10 years and more than 300K.

        • 0 avatar
          Jack Baruth

          I’ll take the first, thanks. Particularly since I’m using said silverado to pull any one of my three race cars.

      • 0 avatar
        Panther Platform

        My 92 year old father took this “nice cautious man” philosophy to the extreme. He basically worked the same two jobs his entire life and amassed a fortune of almost three times “half a million dollars.” Loved cars but spent the last 25 years driving economy cars and POS beaters. His financial planner begged him to spend some of his money including getting a nice car but he wouldn’t do it. When he turned 90 and really started to finally get old and incapacitated he said “I wish I would have gotten a BMW. We should have gone to Indy to see the 500.” Now he is an assisted living home obsessing about balancing his check book (he has 1.4 million dollars) and complaining about the food. Thinks giving my brother and me an inheritance is going to make us happy, but it won’t. You don’t regret what you do in life, you regret what you don’t do.

        • 0 avatar

          “You don’t regret what you do in life, you regret what you don’t do.”

          Perhaps. of course the grass is always greener on the other side. And ignorance is bliss.

  • avatar

    Straight out of college I got a lease that looking back on it now was pretty bad. But I had virtually no credit, so I guess I was technically sub-prime. I also didn’t want to ask my parents to co-sign since I was all independent and such, lol.

    But lesson learned and ever since then I grind down dealers for ever cent.

    However the worst deal I hear was while I was at a dealer getting service done and sat in the sales area. I was working on my laptop and used one of the tables. I overheard someone next table over getting a used Tacoma and rolling negative equity into a loan for $500/mo over 60 months….for a 3 year old Tacoma that was at best worth $20K. I was tempted to rip up the poor bastard’s contract, lol.

  • avatar

    I was pre-approved with my local credit union at a very low rate. When my wife and I went to sigh the papers on a car we had made a deal on, we noticed that the rate listed on the paperwork was quite a bit higher. The finance person said that she had not be able to get in contact with the lender to verify this so she put in their “default” rate and that things would changed once verified. We walked out.

  • avatar

    Worst beating I ever took on a car was a 1977 Mercury Grand Marquis (460 V8) I purchased in 1986. I loved the styling (I’m a sucker for covered headlights).

    The seller stated that they had a carb fire (carb had been replaced afterwards). But otherwise the car was fine and only had around 70K on it. And fairly rust free to boot! My dad’s friend saw a few minor issues, but it appeared to be a solid used car. I paid around $1,000 cash.

    Driving home, the alternator and battery died. Barely made it home before the car died. Replaced both, then noticed after a short time that I had radiator leaks (the radiator looked new). Started having constant backfires, destroying the dual exhaust. Several replacement exhaust later, I found the motor mounts were broken. Replaced several mount sets before the transmission gave out (all options were “D”, no neutral or reverse). Then I started used antifreeze, found that the heads were warped. New engine and transmission later, more issues with rear axle, suspension, brakes, electrical shorts and A/C sporadically working. And I would use (not leak) a 1/4 tank of gas over a 20 mile drive round trip! (AND NO, I DID NOT RACE THE CAR). Running joke was to flip a coin and heads it wouldn’t make it there, tail it wouldn’t make it back. It saw more tow trucks in it’s life then I could even count.

    During the four years of ownership, I sunk over $5K into this beast. I had to purchase other car to get me around, a ’84 Olds Delta 88. It ran fine without issues till almost 300K miles.

    I finally gave up, having put less then 10K miles on the Grand Marquis. Sold it for like $500. Good Riddance !

  • avatar

    All of the car loans I have taken out have either been from my credit union at their then lowest rate or mfg subsidized 0%. So no Sub Prime here. As far as purchase price goes I think I’ve done OK on most of my purchases. I always go in with a max price and am willing to walk away though I have to admit on my F250 purchased at auction I went $100 over my initial max. But since that was a unicorn I wanted a unicorn and figured I’d have a long wait to find another, and it was still under market value.

  • avatar

    I almost always get a Ford, GM, RAM, or Jeep.
    So my golden rule has been buy trucks and lease cars.
    Whenever I have bought a car I ended up taking a beating on the resale/trade in.

  • avatar

    My screw up:

    Make a killing at a teenager making invoice databases for attorneys in Paradox and then buy an Oldsmobile Achieva SCX with cash.

    That 18K could have compounded very nicely if I just got a decent used car – and could have been the start of a “get a free used car every five years” nest egg.

  • avatar

    2009 GT500. I walked in with a fat down payment and told the dealer that I wasn’t willing to pay over MSRP for one,especially not the exact model I wanted ( really went in for a Vista Blue/ Stripe car left with a Performance White/Blue stripe car ).

    I unwisely didn’t check on other financing options or my credit score and settled for the no hassel “financing packages” which included various levels of add-ons like paint protection and extended warranty and so on plus a 14% interest rate because my credit was a little low.

    Emotion and ignorance won me over and I rode off with my prize.

    On the plus side I learned an expensive lesson about letting the financing manager put a steering wheel on your head.

  • avatar

    They say confession is good for the soul. I have all you all beat in this category stunning most into momentary silence.

    I paid 10k for a 1982 Dodge Colt stick shift with no radio, no AC. Had to pay extra for a passenger mirror.

    That’s $25,684 in today’s dollars. Retail was $5,543.

  • avatar
    Dick Steppage

    Fell in love with the ’85 Celica GTS convertible at its debut at the Chicago Auto Show…

    I graduated college in ’87 and went after the first one I found, which happened to be at a Toyota dealership. They were asking $15,995. I think the original sticker was something like $18K.

    The story goes that it was the dealer owner’s wife’s car. The salesman takes me into the service area and there it was, tucked in a corner under a car cover. As soon as he pulled back the cover and I saw the red paint, my eyes rolled up into my head like a shark and I knew I wasn’t going to leave without it.

    My dad offered up his paid-off ’83 Grand Marquis coupe as a trade. We didn’t even bother negotiating and I agreed to pay full asking so we essentially gave away the Merc, which I seem to recall they valued at something like three grand. I don’t remember what the interest rate was but the payment was just shy of $400 a month and I paid it off in less than three years.

    Ended up getting $6.5K for it in ’93 against a sensible Accord. I think I put maybe 5K miles on the Celica during the eight years I owned it. I still keep a picture of it on my fridge.

  • avatar

    It was so long ago I barely remember it. Bought a 91 Civic used in 1995 or so. First car I bought myself. After I got home I realized the dealer financing was a crazy rate. I went to my credit union and refinanced it somehow at the same term for a lot less per month.

  • avatar

    Well…in 2002 or so I bought a 1996 Grand Marquis at the local Ford dealer on a credit card, which I promptly transferred to one of my many other credit cards. I was the master of the credit card transfer for almost 20 years, from the late 90’s until just this past summer. I can say that I never paid more than 6%, but I was seriously in debt for a long time. The good news is that never having missed a payment, I have excellent credit and once I had a decent income, good auto loans were easy to get. Currently have a 75-month loan at 1.94% that will be paid off in about 58 months.

    My wife, on the other hand, had bad credit when we got together and lost her paid for Ford pickup to the “Ford makes flaming cruise controls” recall (the notice of which she missed because money wasn’t the only thing she played fast and loose with back then). We hadn’t been together long enough for me to have a say, so she went out with her cousin to buy a new vehicle and ended up signing a sub-prime, payment based loan for 19.99% interest. I was aghast. Best thing that ever happened was that vehicle getting totaled, and insurance satisfying the bad loan and then some. She’s a much different person these days and now we can get prime loans any time we need them, but it took some hard work.

  • avatar

    Me? Nissan Sentra 2012 w 42K Miles bought in 2014 – Fleet Special Base Model. $10.5K + fees @ an usurious 12.99% for 60 months. (WTF)

    The circumstances: In between jobs (going on month 6 already), My ‘96 Civic daily driver had been stolen a month before (cliche, but it’s true. Good civics get stolen) and my 04 VW Phaeton decides it is a good time to overheat and need a thermostat. (On a Saturday night)

    Temp gig boss hates people working from home and I need to be at the gig each day. I only have $1000 in my pocket.

    So its a gamble. VW Phaeton repair will be $1000+, Too far too Taxi/UBER/Bus for weeks, Credit ain’t great and renting a car would cost $400+ for 2 weeks…

    So, What did I do? I went to the dealer on Sunday afternoon, @ 5:45pm – Looked at the cheapest car on used car lot, fought like hell on price because I thought it was a Nissan Versa (not a Sentra, I’m not kidding) and walked out with the car. I hated driving that POS every day I did but it did its duty until better times arrived. It was totaled, and now on its place is a fun 2012 Suzuki Kizashi…for a better 5.99% rate 2 years later.

  • avatar

    Oof. My worst was a 1989 S-10 Baja that I purchased in 1994 at 19 years old. The dealership got me approved with a $430/mo payment for three years at 14% interest. I thought this was ridiculous so I went to my bank who told me they don’t do loans on vehicles that old.. BUT! They’d be happy to give me a personal line of credit to cover the loan and then some. The minimum payment would “only” be (I forget the exact number here) in the low $200 range at 9.5%. Revolving. It was basically like financing a car on a credit card and only paying the minimum. All said and done I think I paid about $30,000 for that truck.
    I’ve done a lot of dumb things in my life since but nothing as stupid as that.

  • avatar

    We bought a 2001 Hyundai Accent sedan brand new through Carsdirect. Got a decent price on it (as far as we could tell).

    The sad part took place when we traded in my wife’s 1994 Cavalier as part of the transaction. They gave us $210 for it. Of course afterward we found out that people in my wife’s family would have liked to have the Cavalier, but we had no where to park it so we let it go. Woops.

    BTW, we kept the Hyundai for 2 years and dumped it for a new Jetta TDI because the transmission control module failed on the Hyundai 3 times in a row and the dealer was at a loss as to how to actually fix it. Therefore, I’m reluctant to ever consider a Hyundai again.

    • 0 avatar

      My parents were about to do something similar with an old Volvo 740 that was gathering dust in their garage. This was the car I learned to drive in. My mom was getting a new car and the dealer “generously” offered her $500 to take it off her hands. I found out about it and say WTF, give me the car. So I flew out and drove it home. It sat and gathered dust in my garage for about 10 years instead, lol. But still the thought of giving it away for practically free, irked me. I ended up donating it to charity and got a $700 tax eduction.

  • avatar

    My worst beating was pretty small but stuck with me. While in college in 1982 I used a $2500 student loan (interest deferred) to buy a ’75 Peugeot 504 diesel from a guy in Minneapolis. The guy’s wife was visibly upset during the whole dealmaking process, perhaps because as it turns out the guy pulled the wire on the oil pressure sensor to hide a blown head gasket. Couldn’t afford to fix that but did spend maybe another $1000 repairing other problems (clutch, etc). Tried to sell it but no takers at any price so the car limped along overheating periodically. My roommate at the time said his buddy in NJ took his car out into the swamps, lit it on fire, and collected the insurance money. I actually thought about that for a few moments. Does insurance really work that way? I decided to stay out of prison and take my lumps, and eventually the car wouldn’t start and was towed by the police, never to be seen again. $2500 poorer, much wiser.

  • avatar

    My parents allowed me to get another car to replace my faltering Regal. My mother was a nurse at the time who had a patient who was a salesman at a nearby big GM dealer. He said he had a good deal on a car.This turned out to be my 84 Eldorado (in 1996), which my old school car guy uncle warned them against buying, since he had a friend who was a mechanic at a BOC dealer in the 80’s. “Those 4100 engines were junk from the factory, I warned your parents against it” I was told later. My folks didn’t listen and I was 19, about to have a Cadillac as a car. Kids make you do stupid stuff…

    6 months later, the car started running funny and it had begun to self destruct. I’m sure my lead foot driving style didn’t help. No warranty was left, so my folks were on the hook for a new engine. Enter shady Dr. Motorworks franchise, who put a rebuilt motor into it. 8 months later and that engine began having problems, but Doctor Motorworks was DOA. Limped it along for a bit, then traded it on an 89 Acura Legend L, which my grandmother co-signed for. Totaled that 3 months later being stupid, but amazingly bought that Acura undervalued, so I made money on it being totaled.

    I went shopping and found a 95 Cougar XR7 V8 that I liked and a 95 Contour LX V6 5 spd at a Ford dealer. This was 97-98. I still liked my big coupes, but I really enjoyed how the Contour drove. Bought the Contour, drove it home, spiritedly at times. Next day, driving to my job, I heard a tick at idle. It got worse on the drive home. Took it back and told the dealer I didn’t want it. I said I wanted the Cougar for the price of the Contour. Both were fully loaded, nearly the same miles (around 35k) I know there was a difference in price, but I don’t think it was that great of a deal. This was before KBB or the internet. I kept that Cougar for 4 years and have never seen another like it (pearl white, moonroof, V8 and a luggage rack).

    I know I’ve used subprime, but since they gave me money for a car, I didn’t care. Luckily, with all this early debt (plus stupid credit card debt and a lot of it, all paid off) and no missed payments, I have an excellent credit rating. Hindsight is 20/20…

  • avatar

    bought BMW 128i from my “friend” at the bmw dealer. Loaner vehicle with 3k miles. Drove it 1 year, put on 8k miles and traded on a MB GLk. Lost 15K. Boy was I dumb.

  • avatar

    Never used subprime, but I did buy an S-10 once. The F&I guy at the dealer tried to put $1500 for a trade in after we repeatedly told them that we were not trading our car in. In the FINE print it said that if they couldn’t sell our non-existent trade-in for $1500 we would be liable for the difference. If only we had walked away at that point.

    The POS ate two transmissions and we ended up taking GM to small claims court to get rid of it. In fairness to the honest dealers out there the folks that serviced the numerous electrical gremlins under warranty were sweethearts and always gave us nice loaners.

    • 0 avatar

      Just the fine print is enough to make me never want to buy a car from a dealership.
      About two dozen cars in, I have never bought a single car from a dealership. The paperwork is written up for their benefit, not yours.

  • avatar

    1996 Volkswagen Golf in 1999. I had broken up with my girlfriend at the time and gotten back together. I don’t remember exact details as I am blessed with very bad memory for bad life episodes, but she managed to trick me into putting the car to her name and then ran off with a now ex friend. I had not even finished paying it…

  • avatar
    SCE to AUX

    My worst beating was also my happiest deal.

    After the lemon case settled on my 05 Odyssey, I decided to get rid of it asap. I also really couldn’t afford the payments. So in early 2007 I found a 98 Grand Caravan for $4000 in a tiny used car lot. The dealer agreed to take the Odyssey, but he couldn’t match what I owed on it, being short by $500.

    So I bought the Caravan for $4500 cash (yes, $500 OVER list) just so he would take the Honda off my hands. Never was I so happy with a car deal, and will never regret it.

    Another strange detail: it was 13°F that day, with a wind chill below zero, and snowing. I felt particularly bad for the helper who had to put the plate on my new purchase.

  • avatar
    Compaq Deskpro

    Current car, 2014 Challenger SXT base, bought from dealer in 2015 with 24,000 miles, price was 22,500, add $2500 for the extended warranty. I had no credit, so I ended up with an interest rate of 11%, $433 a month for 5 years. Ouch. I also got that sketchy experience mentioned by someone else here where the bank they chose pulls out and the dealer has to scramble to find a different bank, makes for some uncomfortable phone calls. I paid that bill for 6 months then went to a local credit union with an actual credit history, 2% interest and $314 a month, much better. Still, I didn’t realize you could buy the extended warranties online for $1000, so they got me on that one.

  • avatar

    Mine was a used car – a 1996 Volvo 850R – about 5 years ago. It looked nice and I won the eBay bid at 5k and thought I stole it. Unfortunately, I didn’t understand the Volvo enthusiast market at the time. I also didn’t realize I was against an irrational bidder who probably had the same type of car back when he had a life and just had to have one again.

    The car was decent enough but I had to correct a ton of deferred maintenance. Tires, springs, shocks, brakes, PCF system, sagging headliner, etc. So by the time I got through I had at least the purchase price into the thing in maintenance and repair items.

    I tired of it fairly quickly because it didn’t ride well and it was only moderately fast and not all that fun with the automatic. After a miserable experience dealing with the “enthusiasts” of these cars – basically people who’ll waste 20 minutes of your time bragging about how much they know about Volvos and the market and tell you how worthless your vehicle is just before their insulting offer – I ended up selling it on eBay after three auctions, with all that work done, for about a grand less than I originally paid for it! And I considered myself very lucky to get even that.

    I came to learn that I’d paid 5 grand for a 1,500 car and put OEM or OE supplier parts on it, which were somewhat expensive. The name of the Volvo game is to get the car for dirt cheap and then keep it running with “spit ‘n bailing wire” – take apart, fix, and reassemble the part that breaks, go to a junkyard, or go to AutoZone and get something made in China if you have absolutely no alternative left. I, by contrast, viewed it and treated it like a vintage BMW or Mercedes. And boy did I get burned, real bad!

  • avatar
    Art Vandelay

    It involved an Audi 5000 and the phrase “We Finance E1 and Up” in El Cajon, California in the mid 90s

  • avatar

    Ai! 24 new cars since 1990? Well, now we know why you don’t have any money.

    For the TWO new cars I’ve bought since 1990, I paid cash. I think I probably could have gotten a bit lower price with harder negotiation, since I don’t like hard dickering nor am I good at it.

    The worst deal was the loan I took on a new car in 1986, which took 4 years to pay off, a 4 year anchor dragging behind me with every financial step I took. I was never so glad as when that SOB was paid off, and I swore I would do my best not to take another car loan. So far that’s been possible, though you never know what may come in the future.

    I have not thoroughly investigated these rumored “zero interest” car loans. It’s not clear to me where the money is going; if there is ostensibly zero interest, it still costs the finance company money to service the loan, and they still have to pay interest on the loans they take to get the money they loan you; so where is that money coming from? (I mean, I know it’s coming from the customer; finance companies aren’t in the business of losing money; but I haven’t figured out the details.) I can see that there could be cash flow advantages to paying out the principal over time, if you aren’t paying interest, and if you aren’t getting porked somewhere else in the deal.

    • 0 avatar

      “so where is that money coming from?”

      0 interest car loans are simply a form of subvention from the manufacturer. The manufacturer is paying the interest of the loan within those terms, if the customer qualifies.

      It’s the exact same thing as putting thousands in cash on the hood. It always pays do to the math on the cost of financing versus taking the up front discount.

  • avatar

    The only real car note I’ve ever had was half of a 2016 Ram 1500 that I finance simply to shoot the finance guy a small reserve payment from the bank for doing me the favor of writing me up a no-profit deal. I paid it out once the 6 month time period was up where they wouldn’t charge back his reserve.

    I used a line of credit for many years when I was a mechanic flipping cars to which I paid about 5-6% if I carried a balance.

    I guess I’m the stereotypical TTACer who doesn’t buy cars he can’t pay cash for, but by living that way when I was poor has allowed me to buy new cars outright now.

  • avatar

    Biggest beating is going to be forced on me in about a year with my 2014 X1. Not due to financing, but because I’ll be forced to sell it about 40,000 miles earlier than I planned, due to the ticking N20 timebomb under the hood. Warranty for failed timing chain guide extended to 70,000 miles by BMW, then it’s a $17,000 gamble for the remainder of your ownership!

    I made money or broke even on all my mid-90s sportbikes. Bought and sold in college (early 2000s), using the miracle of eBay/Paypal + 0% credit cards. Good times.

  • avatar

    They only got me once. I leased a 1988 Saab, my first grownup car. My wife was pushing for a Jetta GLI, and in retrospect, mama was right. This was before leasing was big, and I was wrong in calculation of the money factor. At some point I realized it was 17%, and my credit was much, much better than that. The beating continued when a leaf spring on the highway punctured the bottom of the transmission, and the same dealer rebuilt it, a major dealer on the Ramsey NJ auto strip. A year later, the transmission puked. Another shop rebuilt it, and the car went back at the end of the lease. I sued the dealer, and got some money, but nowhere near my actual repair bills and lost time. I am not a fan of the Ramsey Auto Group.

    I’ve been OK since…although my current CTS has eaten every “they all do that” part-wheel bearings, a throttle body, and an alternator, but as the price was right, and I bought it knowing that shocks, etc were going in the hopper, I’m not upset-I mod all my cars in some way. At 30k per year I can’t lease and all of my cars end up eating parts, so the Caddy was cheap to get but no different to run than an off lease German, but with reasonable part prices and a lot less bizarre over engineering.

    I bought another Saab, later, but never got beat in the showroom again….

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