Mom Sells Her $84K Dream Car After Paying Over $40K in Loan Interest Over Three Years

Three years ago, Blaisey Arnold, 28, bought her dream car, a Chevy Tahoe, for $84,000. Recently, she shared on TikTok that she was selling the car as the finances weren't making sense anymore.

Arnold's car, financed by GM Financial, a subsidiary of General Motors, came with a hefty price tag. Over three years, she paid a staggering $ 1,400 per month, totaling nearly $50,000. Despite these substantial payments, her outstanding balance remained at a staggering $74,000, with over $40,000 of her hard-earned money going towards interest payments.

Reflecting on her experience, Arnold shared, "It is my dream car, but I made a mistake three years ago when I bought it...My $84,000 car that I purchased three years ago still has a balance of about $74,000, and honestly, that realization is staggering."

She made a down payment and traded in an older car on negative equity. It means she owed more on her previous car loan than the vehicle was worth. Rolling over auto loan balances onto a new one may be costlier.

Dealership Was Ready To Handover Keys Within The Hour

Arnold's experience at the local auto dealership was seamless. She reportedly said: "The dealer pretty much told me they can get me out the door with the car within an hour. He didn't act like it was something I should be concerned about."

Arnold's experience highlights the importance of being informed and aware. She shared, "I did not go with my husband, and as a female, I feel they took advantage of me. They knew I really wanted the car and that I was by myself."

Further, lenders often sell car loans to those with poor credit scores despite knowing that the customers may need help to repay. Meanwhile, the total US auto loan in 2024 was $1.607 trillion, whereas the average monthly car payment reached a record high of $738 in Q4 2023.

Auto loan delinquency levels also snowball as insurance premiums and living costs rise due to high-interest rates and elevated inflation. Data from the New York Fed revealed that the percentage of auto loan balances transitioning to delinquency rose to 2.24% in Q4 2023 from 1.62% in Q1.

Many who were okay with a fixed monthly loan repayment years back are now finding it difficult to cope with the macroeconomic currents.

New Car Scam Rules Inbound

The Federal Trade Commission finalized the Combating Auto Retail Scams (CARS) rule, effective July 30, 2024, to protect customers from junk fees and bait-and-switch tactics.

The mandate prohibits dealerships from making any misrepresentation when selling, leasing, or arranging financing for motor vehicles. Dealerships must also strictly adhere to accurate pricing disclosures when advertising and seek consent from customers before imposing any charges.

"When Americans set out to buy a car, they're routinely hit with unexpected and unnecessary fees that dealers extract just because they can," said FTC Chair Lina M. Khan. "The CARS Rule will prohibit exploitative junk fees in car-buying, saving people time and money and protecting honest dealers."

What's Arnold's Advice For Car Buyers?

Arnold's future car plans involve a significant change in strategy. Instead of taking on another loan, she intends to purchase her next vehicle with cash. This decision will free her from the burden of monthly car payments, a prospect that brings her immense joy and a sense of financial liberation.

She intends to use the $1,400 she'd put in for the car loan towards something better. Arnold urged those planning to buy a car on a loan not to do what she did. "It's not worth it," she said. "Don't pay so much for something so irrelevant."

"Having a nice car is awesome, but it's not necessary to keep up with the trends anymore. The trends are changing every couple of months," she concluded.