Here Are The Worst Car Loans You've Ever Seen

Some of you know I'm interested in auto loans, both good and bad. I used to do a whole series on them back in my Oppo days. One that still shocks me is the story of a college student who got duped into an $800/month lease on a 2019 Lexus IS and then tried to get out of it after realizing how screwed they were.

We asked readers about the worst auto loans they've seen. These were their answers.

Knew a guy who rolled over a 7 year 25% interest 2013 mustang 5.0 he got while in the service into a 8 year 33% interest loan on a 2014 dodge journey because he knocked a girl up. He then went on to finance 22" rims for the journey at a similarly stupid rate. Last I heard she cheated on him during deployment and took him for everything in the divorce.

Suggested by: Tommy Helios (Facebook)

I'm sure I can find a more outrageous one, but this one immediately hit me.

I had a guy paying $970/month for 72 months on a $46k F-150. If he made every payment, that would be just shy of $70k.

Why so high you ask? It's because he traded in two vehicles in on this truck, both of which he was underwater on from the previous vehicles he had....which had negative equity on both from previous vehicles. In all, he was rolling SIX different vehicles worth of negative equity in this new truck.

His bank picked it up within 10 minutes of submission for the full amount. Warranty and GAP as well.

Suggested by: FijjiST

My ex-brother in law once agreed to a 6 year, over 20% APR loan on a very used Mazda 6 from some no-credit-check place. Ended up costing him at least double what the car was worth.

Suggested by: @crashcamp83 (Twitter)

Ex-Wife #1 came into the marriage with an '84 Chevrolet Cavalier 4-door and a 60-month(!!!! In 1988!) note at something around 25% APR that would have been upside-down on that turdwagon (we'd already replaced the cylinder head and camshaft as the previous owner had apparently overheated it something fierce and the cam was part of a batch with bad heat-treat that wore about half the lobes almost flat — and ex learned the "bumper to bumper' extended warranty she'd bought with it wasn't worth the paper it was printed on as the "normal wear and tear" and "abuse" exclusions meant their "inspector" could weasel out of anything) until the last payment. The depreciation on that thing was that spectacular.

Despite being a young engineer making Not That Much in 1991, I carefully read the loan paperwork, discovered there was no penalty for early pay-off, and paid off the balance in about 3 chunks. The car, being from Oklahoma, was actually worth more where we lived in SE Michigan as it was rust-free, so I spent a weekend thoroughly detailing it in the parking lot of the apartment and put an ad in Auto Trader (remember those? Actual weekly print classified "magazines"), using the proceeds as down on a shiny-new '91 Mercury Tracer via A-Plan and some serious cut-rate Ford Credit financing. Which was the car she drove into the proverbial sunset about a month after I'd made the last payment, but that was really for the best.

Suggested by: autojim

Client brought in all her bills (social work), including car loan. Chevy Sonic, base model. I don't remember the payment, as I was stunned by the 28% apr. Fine print showed she was going to pay over $31k for it.

Suggested by: Andy Jensen (Facebook)

We had a buy here, pay here guy at the dealership I worked at. All his loans were 24.99% and he installed GPS and ignition interlocks on all the cars (were talking people with credit scores in the 400's to low 500s). If someone was 1 day late on their payment a light on the GPS would come on. At 5 days late it would disable the ignition and ping him the GPS location. They'd send a repo man to get the car same day. At 24.99% their payments were usually in the 400 range for 10-12k cars.

Suggested by: HOT-HATC

Oh lordy. When I was on active duty I saw a TON of really, REALLY bad loans. People joking about young Airmen/Soldiers/Marines/Sailors getting that V6 Mustang at 29% interest aren't actually joking...sadly. I've also seen a guy buy an 8 year old MX6 at over 30% interest, total insanity. But, the worst I've ever heard of.....I was talking to a salesman at a Chevy dealer, we were looking at SUVs like the Traverse, and I asked him how on Earth so many stay at home soccer moms were driving in brand new, fully loaded Tahoes/Yukons/Suburbans.

He told me they were financing them for over 8 years, and usually their interest rates hovered around 10%. Think about that: financing a vehicle for more than 5 years longer than the warranty lasts, and getting absolutely thrashed by your interest rate. He said it was worse than that though, because in a couple years when GM inevitably refreshes the exterior, most of them come scrambling back to get that new one. And they're all completely upside-down. So they wind up with longer loans, at higher interest. And the cycle repeats every few years. He had one customer who had to take a 120 month loan to get her new Suburban. TEN YEARS! People are nuts, and keeping up with the Joneses is stupid.

Suggested by: You Wish

I was selling cars back in 2005 when gas prices first hit about $3 per gallon. I had a guy come in wanting to trade in his two year old suburban for a RAV4. Unfortunately he still owed over $60,000 for the thing that was probably about $50,000 when he bought it, and we wouldn't give him more than $20,000.

Suggested by: Carey Lane (Facebook)

I worked for an online car retailer in California a few years ago. It was absolutely insane the types of terms people would agree to on VERY used cars. I helped a customer interested in a 2010 Infiniti EX35 (forgot they existed), seemed pretty normal until they told me they had so-so credit. Once I ran their info I had them approved at a 24% interest rate loan for 60 months on a $16k crossover. Insane. The customer was happy to have been approved and accepted even though I kept reiterating it may be better to buy something cheap and cash instead... no reasoning with him though.

Suggested by: bignickenergy