That is, if they approve you at all. Their requirements are higher, which is why you would get a better rate through them. If you can’t, you may need to go through a different company with a higher interest rate. Should that be the case, it’s best to consider getting a car (and the loan) significantly less in than what you’re approved for.

Definitely shop around, but sometimes the dealership does have an actual competitive offer. Especially if you threaten to use external financing (and have the pre approval in hand), they might knock down their interest rate to save the deal, as the loan is where the money actually is.

considering that you likely live in the US, just wait 6 months and this loan would be below monthly inflation

You pay for the ability to access capital you do not currently have. Nobody owes you thousands of dollars with which to but a car. If you want to buy a car with money you don’t have, then you have to give the bank something in return. That something almost always is “more money than we initially lent you, over the course of the loan period” and if you shut that down, banks just won’t give loans anymore. Suddenly poor and middle class people have lost their biggest tool for accessing capital.

Lack of public transport is a separate problem. The US has dropped the ball across the board there. Only a handful of cities have any reasonable public transport and even those systems are old and often shitty.

Education being so expensive that it needs to be financed, is a separate problem. Education is too important to leave to the free market, letting our system metastacize to this extent is the result of decades of compounding failures.

16.9% interest is predatory, but “interest above inflation” is necessary if you want banks to do anything besides hoard money.

Since this is aimed at Gen Z, if you can buy a car outright or close to it, I would recommend still financing, but paying it off easily to build credit.

Cars have been expensive for a few years now, bought an 08 Subaru in 2020, it’s worth more now than what I bought it for.

Not often. Used cars, at least where I am, are all pretty pricey, and with rent and shit being out of control, I’m not surprised younger people can’t afford to save enough to buy one outright. I’m lucky to be older and I bought my current car at 0% interest in 2012. I’m keeping it until it gives up because I know we’ll never see that kind of deal again.

a loan for a used car sounds wild to me.

Predatory car loans has entered the chat.

I don’t know about Carvana, but plenty of scummy dealers will give insane rates to people with no credit check, repo the car while they’re still underwater on the loan, and sell it to someone else. You can have two or three people paying off the same car.

Oh, also, they somehow encourage the most gullible people who can’t afford their loans to just let the car get reposessed instead of attempting to sell it back to the dealer.

there are a lot of used ~2018 to 2022 cars on the market with not a lot of miles, most go for around $20k (like what I got). True beaters still go for like $10k.

Cash for clunkers removed a significant portion of the used cars from the market. It was a while ago but its effects are still very much being felt even if people don’t realize exactly what it is.

Personally, I agree with your mindset, but I’m pretty handy with fixing/maintaining my own vehicles. For someone needing something to reliably get back and forth to work/school/daycare, I understand why people don’t go this route. Shop lead times have skyrocketed in the last few years, as have repair prices. Sometimes you just need something you don’t have to worry about.

A car that is the current model year is “used” as long as it’s had an owner. That’s what these loans are for. You can’t even get a loan for cars past seven years old with most lenders.