A Steep Car Loan that Caused Bankruptcy
Christensen also recalled a strange situation that took place a few years ago with a woman in her early 20s who had just bought a truck. She’d been living independently for a year, and purchased the vehicle at a “buy here, pay here” used car dealership that charged 30% to 40% interest on a used car loan.
Given that she had no credit and was really anxious to have her first truck, she took out a loan for $10,000 on a truck that was “only worth $4,000 to $5,000.”
With an interest of 30 percent, she had to pay an extra $3,000 a year. Six months later, the dealer repossessed the truck (“and probably sold it to somebody else for $10,000,” according to Christensen) because she was unable to make the payments. In addition, she still had to pay $9,000 on the truck but got a bill for towing fees, repossession fees, storage fees, and cleaning fees, which amounted to $13,000. Not to mention she was threatened with a lawsuit by the car dealer.
We are just way too in love with our vehicles in this country,” Christensen concluded.
