� Rigatoni | Main | Speeches from the lonely end of the tavern �

Saturday, January 07, 2012

Buy Here Pay Here

buy-here-pay-here-2012-01-07.jpg

From a three-part article in the Los Angeles Times last fall, we learn some interesting things about those buy and drive used car lots we see all over the place:

When the time came, they exchanged the Mitsubishi for a decade-old Mercedes-Benz E-Class with 80,000 miles, three previous owners and a repossession in its past.
At $13,998, the price was about $5,500 above Blue Book. The balance of the old loan was rolled into a new one, also with an interest rate of 25.99%, according to the new contract. Their payments climbed to $498, stretched out into 2014.
By then, the total cost of the Mercedes with interest would be more than $25,000. [Link.]

Your 401k money might even be invested in these car lots:

Loans on decade-old clunkers are being bundled into securities, just as subprime mortgages were a few years ago. In the last two years, investors have bought more than $15 billion in subprime auto securities.
Although they're backed mainly by installment contracts signed by people who can't even qualify for a credit card, most of these bonds have been rated investment grade. Many have received the highest rating: AAA. [Link.]

While the government will help you buy a house, get an education, and go to the doctor, among other things, it won't help you get a car:

About 1 in 4 needy U.S. families do not have a car, according to the Annie E. Casey Foundation. That's a serious handicap for the millions of Americans who don't have access to robust mass transit.
A nationwide survey of 353 people who bought cars with help from a nonprofit group called Ways to Work found that 72% reported an increase in income. Of those who were on public assistance when they acquired a car, 87% were no longer receiving it a few years later. [Link.]

Even if it's the only way to get to your job. Read the whole thing: Part 1 * Part 2 * Part 3. [Via.]

Photo: Ninth Street (a/k/a Business 55, a/k/a Loop 66).

Posted by Marie at January 7, 2012 8:02 PM

Comments

Post a comment

Thanks for signing in, . Now you can comment. (sign out)

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)


Remember me?