{"id":1316608,"date":"2019-11-11T19:24:00","date_gmt":"2019-11-12T02:24:00","guid":{"rendered":"https:\/\/www.postindependent.com\/purcell-column-driving-an-underwater-car-is-no-fun\/"},"modified":"2019-11-11T19:24:00","modified_gmt":"2019-11-12T02:24:00","slug":"purcell-column-driving-an-underwater-car-is-no-fun","status":"publish","type":"post","link":"https:\/\/alwaysmountaintime.com\/kske\/local-news\/purcell-column-driving-an-underwater-car-is-no-fun\/","title":{"rendered":"Purcell column: Driving an \u2018underwater\u2019 car is no fun"},"content":{"rendered":"
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What\u2019s the best car on the road? One that\u2019s paid off.<\/p>\n

That\u2019s what my father loves to say. Regrettably, too many Americans aren\u2019t heeding his advice. What\u2019s worse is that they\u2019re taking on \u201cunderwater\u201d loans that far exceed their cars\u2019 value.<\/p>\n

The Wall Street Journal recently featured a 40-year-old electrician who bought a $27,000 Jeep with a $45,000 loan.<\/p>\n

How is that possible?<\/p>\n

A string of bad luck was part of it. He \u201creplaced one because it had 100,000 miles and another when he went through a divorce, and he changed cars again when his family was expanding.\u201d<\/p>\n

Since auto dealerships earn more from financing cars than from selling them, they\u2019re happy to extend \u201cunderwater\u201d loans that can take many years to repay \u2014 though in those cases, \u201ccar owner\u201d probably isn\u2019t the right term for the buyer.<\/p>\n

Buyers often trade their cars in before those lengthy loans are paid off, driving into a perpetual state of indebtedness. In 2019, a third of car buyers have taken on \u201cunderwater\u201d loans, The Journal says.<\/p>\n

It also says rising car prices are another cause of growing debt. I know a few fellows who\u2019ve borrowed $60,000 or more to buy new trucks, which get pricier by the day.<\/p>\n

A 5%, seven-year loan on a $60,000 truck costs $850 a month. You can still buy a house for that amount in Pittsburgh.<\/p>\n

\u201cEasy lending standards are perpetuating the cycle, with lenders routinely making car loans with low or no down payments that can last seven years or longer,\u201d reports The Journal.<\/p>\n

\u201cEasy lending standards\u201d? When has our country encountered that eerie term before?<\/p>\n

\u201cConsumers, salespeople and lenders are treating cars a lot like houses during the last financial crisis: by piling on debt to such a degree that it often exceeds the car\u2019s value,\u201d The Journal reports.<\/p>\n

Automakers have realized they can charge more for their vehicles if they give buyers, who aren\u2019t very good at math, monthly payments they can swing \u2014 even though those vehicles depreciate massively and are \u201cunderwater\u201d throughout the loan\u2019s lifespan.<\/p>\n

\u201cA record 7 million Americans are now 90 days or more behind on their auto loan payments,\u201d The Washington Post reported in February.<\/p>\n

Some observers are starting to use the \u201cbubble\u201d term regarding auto loans, as such debt has grown 75% since 2009, to about $1.26 trillion or about 5.5 percent of GDP, according to a U.S. PIRG report.<\/p>\n

Look, I\u2019m a car guy. I\u2019ve owned 27 vehicles. When I was younger, I did my fair share of boneheaded deals, taking on more debt than I should have to drive nice cars. I figure everyone has a right to be foolhardy this way once or twice in a lifetime.<\/p>\n

But I\u2019ve learned that paid-off vehicles are for more enjoyable to drive than those the bank still owns \u2014 that massive debt on rapidly depreciating automobiles takes the joy out of driving. And that all that auto debt combined with college-loan and credit card debt is doing no favors to our economy.<\/p>\n

Thankfully, I finally came to my senses.<\/p>\n

I now own a 2008 Toyota 4Runner in mint condition; a super-clean 1992 Chevy S-10 that sits in my father\u2019s garage, waiting to haul furniture or mulch; and a recently acquired cherry 2011 Chrysler 200 convertible, which I\u2019m enjoying the heck out of.<\/p>\n

Why are they three of the best vehicles on the road? They\u2019re all paid off.<\/p>\n

Copyright 2019 Tom Purcell. Tom Purcell, author of \u201cMisadventures of a 1970\u2019s Childhood,\u201d a humorous memoir available at amazon.com, is a Pittsburgh Tribune-Review humor columnist and is nationally syndicated exclusively by Cagle Cartoons Inc. For info on using this column in your publication or website, contact Sales@cagle.com<\/a> or call (805) 969-2829. Send comments to Tom at Tom@TomPurcell.com<\/a>.<\/p>\n

via:: Post Independent<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

What\u2019s the best car on the road? One that\u2019s paid off. That\u2019s what my father loves to say. Regrettably, too many Americans aren\u2019t heeding his advice. What\u2019s worse is that they\u2019re taking on \u201cunderwater\u201d loans that far exceed their cars\u2019 value. The Wall Street Journal recently featured a 40-year-old electrician who bought a $27,000 Jeep […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[160],"tags":[],"class_list":["post-1316608","post","type-post","status-publish","format-standard","category-local-news"],"acf":[],"publishpress_future_action":{"enabled":false,"date":"2026-09-06 13:46:25","action":"change-status","newStatus":"draft","terms":[],"taxonomy":"category","extraData":[]},"publishpress_future_workflow_manual_trigger":{"enabledWorkflows":[]},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"KSKE Ski Country","distributor_original_site_url":"https:\/\/alwaysmountaintime.com\/kske","push-errors":false,"_links":{"self":[{"href":"https:\/\/alwaysmountaintime.com\/kske\/wp-json\/wp\/v2\/posts\/1316608","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/alwaysmountaintime.com\/kske\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/alwaysmountaintime.com\/kske\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/alwaysmountaintime.com\/kske\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/alwaysmountaintime.com\/kske\/wp-json\/wp\/v2\/comments?post=1316608"}],"version-history":[{"count":0,"href":"https:\/\/alwaysmountaintime.com\/kske\/wp-json\/wp\/v2\/posts\/1316608\/revisions"}],"wp:attachment":[{"href":"https:\/\/alwaysmountaintime.com\/kske\/wp-json\/wp\/v2\/media?parent=1316608"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/alwaysmountaintime.com\/kske\/wp-json\/wp\/v2\/categories?post=1316608"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/alwaysmountaintime.com\/kske\/wp-json\/wp\/v2\/tags?post=1316608"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}