A good car loan can get you a sweet ride at an awesome rate. Others are so bad that you wonder how they’re legal. What is the worst car loan you’ve seen?
While a few of my friends, family, former classmates and acquaintances are car people, most are not. Which means I get a lot of questions. Along with the usual questions of “is this car good?” I am sometimes asked “is this a good deal?” Unfortunately, the second question always comes after they’ve made a deal and signed the loan paperwork.
It’s always a good idea to read through your loan before signing it. It should give a good overview of how much you’re paying and why. Sometimes I’ll see pretty decent loans with good terms and fantastic annual percentage rates. But sometimes I’ll see a nightmare that I wish I could have prevented before the ink dried.
Back in 2016, one person I know financed a 2011 Ford Expedition EL with 170,000 miles. They wanted something that could tow a 7,000-pound travel trailer while hauling a load of people. The Kelly Blue Book value for this thing was $6,000 on a good day. Yet, the Expedition was for sale at a used car dealership for $10,000 with peeling paint.
That was bad enough, but then I saw the loan paperwork. By the time the loan is paid off they will have forked over $20,000 to the lender. That’s twice the asking price and way more than twice its value. Last I’d heard, the Expedition broke down after gushing out its coolant and overheating. It’s rusting out and falling apart but the person is still paying on the loan.
What’s the worst loan you’ve ever seen? Did you have to take out a bad loan to get a car?