At least 30% of Sears employees signed on for a 6+ year car loan, where you pay more interest than principal. So, when you lose your job, and are forced to sell your car, you will soon discover that you have zero equity in that "asset" and in fact are in the red by at least 5K
Think back to the day you made that delusional decision, and know that your current predicament is of your own making.
I thought this was an analogy of what Eddie is doing. Borrowing money on something that will be with less at the end of the loan. Just putting it in terms that most employees can relate to.
Paid 8k cash for my '13 focus back in 2014. Just gotta find the deals and actually save money.. do what my generation has learned in order to live in today high priced society, don't buy stupid sh-- that benefits no one.
I drive a paid-for, six year old Honda Accord that I bought used at two years old. It's a car I'll be driving for a while.
My car is one of the newer ones in the lot and six years old isn't really new, so I don't know where you are getting the idea that Sears employees are signing loans en masse for brand new cars. The ones in my lot are overwhelmingly 15-20 years old.
Maybe it varies from location to location? I know in some areas of the country, like California, people tend to live above their means.
@TjnTG6t: That is truly an appalling post. You shouldn't berate people like that. Everyone makes mistakes in life and I'm sure a lot of people learn from them too. I had once bought a new vehicle thinking I could make the payments until I had lost my job and wound-up filing for bankruptcy. It was the best life lesson I had ever experienced. And from there on, I learned to be more faithful and wiser spender of money.
What people do is really no one else’s business. Screw off.
Buying a car at a low interest rate is often a smart decision if that rate can be offset by an higher investment return somewhere else. Buying a car you can't really afford is never a good decision. So if you are living paycheck to paycheck, that new F150 might not be the best choice under any circumstances. The only type of loan that I know of where you almost always have negative equity in the car is a "rule of 78" loan and I don't know if those even still exist. IMHO they should be illegal. Of course you lose 15 - 20% the second you drive that new car off the lot but if you have paid 12 - 18 months payments on a simple interest loan, you should at least break even on resale. Mathematically you are better off buying a three year old car over a new car any time. The biggest depreciation hit has already been taken and the car, if it had been maintained, should have many more years of good performance with relatively low maintenance.
the math in the article is fake news IMO. Yes the car depreciate in value, no the interest expense exceeds the payments .
You’re the stupid one because the article you linked said nothing about sears employees or that 30% number you pulled out of your butt.
Wow! Somebody woke up on the wrong side of the bed this morning. Geez.
As far as the vehicles in our employee lot, the newer vehicles belong primarily to part timers that also have a full time job elsewhere.....or these newer vehicles belong to associates that have a spouse that works elsewhere and that paid for that vehicle.
Our Store Managers and some ASM's drive flashier cars as well.
The rest of the associates that rely on Sears as their sole means of support own vehicles with more years and wear and tear on them.
O.P- while I may agree that many people who work for SHC are making decisions based on the Kool-Aid they are drinking, thinking that this company will make it. Your math is horrible and you don't understand how interest works.
Actually if they did that was smart. Current interest rates on new cars are 1-3% even for 6 years. Who is going to give you money at that rate? Let’s look at the numbers, sears employee borrows $30k to buy a new car, finances $30k over 6 years at 4% (higher than average but the guys dumb, he works at sears) his payment is $469 a month for 72 months for a total interest paid over 6 years of $3,793.49.
Clearly he is not paying more “interest” than principal.
OP I don't know where yours comes, but in my store out of probably the 40 employees we have left the only ones that have new car loans are just 5 the rest just drive old cars since the pay and hours is so bad.
"Statistics huh? Where’s the source?"
Here ya go clown
https://www.usatoday.com/story/money/cars/2015/06/01/new-car-loans-term-length/28303991/
If you had half a brain you'd know what was going on already, but half a brain would require you to at least double your brain capacity.
check buisness insider today there are showing what stores they are closing
Abraham Lincoln once said 72.8% of all statistics on the Internet are made up.
Statistics huh? Where’s the source?