Comment by kulahan
6 hours ago
Because most people who are fucked, are fucked due to terrible money spending habits. Tons and tons of people who make six figures are living paycheck to paycheck. Not because they must but because they won't stop spending poorly.
Again, I don't understand the desperate internet trend of defending terrible choices by focusing on the, like, 0.001% of people who do everything right and still fail. We've got the highest living standards on the planet. It's absolutely a choice.
I was hoping for some genuine counterpoints but this just feels like a rant? It feels like the stereotypical response that millennials could afford property if only they didn’t spend their money on avocado toast at Starbucks.
Let’s say a normal car costs you $200/month and a big truck costs 400.
200 is not going to make a difference in your situation - you are either good either way or close to breaking point and therefore fucked either way (if not this month, then the next one when you have an unexpected large expense).
If you’re fucked, why not take advantage as much as possible and get the most truck for your buck? Well “your buck” in quotes but you get my point.
If my budget was at breaking point and for only 200 bucks extra (one time payment since I’m gonna default next month) you can bet I’m gonna take advantage and get another ~20k worth of truck that I’ll get to keep until the bankruptcy proceedings complete (at which point the extra would’ve depreciated off anyway). Or is there something I’m missing?
I don't think most people are buying trucks and then defaulting the next month either that's a bizarre argument to make. And 200 a month is a lot of money!
200 * 12 = 2400 * 4 years( let's be real it would be longer ) = 9600. That IS a lot of money, it's not going to solve every problem immediately but applying the mindset of whatever Im screwed so I might as well set my money on fire is exactly how people keep sinking into the hole. You take the 200 extra on the car, on the apartment, the 150 pants. Its death by a thousand paper cuts and it will make a bad situation much worse.
The thing you’re missing is that it isn’t a $200 difference. Auto loans above $1k/mo are becoming common now vs the $400 for something “affordable”. Since people don’t have large down payments, the monthly rate scales beyond linearly to offset default risk with the loan upside down.
You’re also presenting a false scenario of “screwed either way”. One decision is getting a car that doesn’t leave you with $10k+ negative equity in a year because you did $1000 down on a $85k truck financed over 10 years with an 8% rate. That’s a decade long financial albatross that will cost you $150k by the time it’s done.
The alternative is you put $1k down on a $30k vehicle over 4 years with the same monthly payment and never end up with negative equity.
The gulfs here are enormous and the “screwed either way” altitude is pure defeatist financial ignorance.