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Seeing that reminded me of a quote I saw in a Reuters Article [1]: “A lot of people that have two-year-old trucks can get into a new one for the same (monthly)

by kop316 6y ago

Seeing that reminded me of a quote I saw in a Reuters Article [1]: “A lot of people that have two-year-old trucks can get into a new one for the same (monthly) payment or lower,” said Noah Wolter, general manager of Charles Gabus Ford in Des Moines, who sold around 1,500 new vehicles last year. “That’s the easiest swap ever.” I see that and think that a lot of money was just lost if you trade in a two year old car for a new one. Is this a common thing? [1] https://www.reuters.com/article/us-health-coronavirus-autos-trucks/while-u-s-economy-slides-heartland-auto-dealers-cry-out-for-more-trucks-idUSKBN22X15M https://www.reuters.com/article/us-health-coronavirus-autos-...

csharptwdec19 6y ago
Yes and no... Lots of people in the US wind up leasing new vehicles for 2-3 years. Trucks especially so since a well equipped one will run you upwards of 40-50k USD depending on the brand. In a lease, you're paying for the value hit of taking the car and driving it for X/Y years/miles. So if we're talking lease tradeups, of course it's going to be a near equal amount. As far as just flat out 'used' trade-ins; because of their cost and utilitarian nature, trucks do typically hold their value better than many cars. On the other hand, let's look at that quote again: > "A lot of people that have two-year-old trucks can get into a new one for the same (monthly) payment or lower" There's nothing in that statement that indicates the customer is actually paying less overall. There's a lot of 'psychology' behind monthly payments vs overall amount paid on a loan. In other words, there's no guarantee that this sales manager wasn't convincing folks to, say take their car with a 500$/mo payment with 3 years left and switch them out to a 400$/mo payment with 5 years left. Sure, you have a new car again, but is your total cost of vehicle ownership really going down?
- deleted 6y ago
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- kop316 6y ago
  The whole "psychology" part is what I was thinking of too. I do NOT want a car payment, as I feel like these sorts of games hide how much you really are paying. And car dealerships are a business, so they encourage this sort of behavior for a reason (likely to get as much money as they can out of you).
poulsbohemian 6y ago
Car financing has gotten weird...it seems very clear that the auto manufacturers have heard the good news of subscription pricing and are doing everything they can to turn their industry this direction. In any case, you have a few factors: -- Car prices accelerating rapidly over the past few years -- loans as long as 7 years (!!!) in order to get the monthly payments down to something people can afford -- Used cars holding their value much longer, making the choice to buy new vs used much less clear than in the past -- Lease terms that are significantly cheaper than buying new You end up in a world that is very different than the past, where if you are going to be paying out hundreds of dollars every month for a vehicle, you might as well turn it in and drive something new, assuming no other financial penalties in the exchange. In short, vehicles are now a subscription in all but name.
z3ncyberpunk 6y ago
Money or not it's just highly consumerist and disgusting

by kop316 6y ago

csharptwdec19 6y ago

Yes and no... Lots of people in the US wind up leasing new vehicles for 2-3 years. Trucks especially so since a well equipped one will run you upwards of 40-50k USD depending on the brand. In a lease, you're paying for the value hit of taking the car and driving it for X/Y years/miles. So if we're talking lease tradeups, of course it's going to be a near equal amount. As far as just flat out 'used' trade-ins; because of their cost and utilitarian nature, trucks do typically hold their value better than many cars. On the other hand, let's look at that quote again: > "A lot of people that have two-year-old trucks can get into a new one for the same (monthly) payment or lower" There's nothing in that statement that indicates the customer is actually paying less overall. There's a lot of 'psychology' behind monthly payments vs overall amount paid on a loan. In other words, there's no guarantee that this sales manager wasn't convincing folks to, say take their car with a 500$/mo payment with 3 years left and switch them out to a 400$/mo payment with 5 years left. Sure, you have a new car again, but is your total cost of vehicle ownership really going down?

deleted 6y ago
[deleted]
kop316 6y ago
The whole "psychology" part is what I was thinking of too. I do NOT want a car payment, as I feel like these sorts of games hide how much you really are paying. And car dealerships are a business, so they encourage this sort of behavior for a reason (likely to get as much money as they can out of you).

poulsbohemian 6y ago

Car financing has gotten weird...it seems very clear that the auto manufacturers have heard the good news of subscription pricing and are doing everything they can to turn their industry this direction. In any case, you have a few factors: -- Car prices accelerating rapidly over the past few years -- loans as long as 7 years (!!!) in order to get the monthly payments down to something people can afford -- Used cars holding their value much longer, making the choice to buy new vs used much less clear than in the past -- Lease terms that are significantly cheaper than buying new You end up in a world that is very different than the past, where if you are going to be paying out hundreds of dollars every month for a vehicle, you might as well turn it in and drive something new, assuming no other financial penalties in the exchange. In short, vehicles are now a subscription in all but name.

z3ncyberpunk 6y ago

Money or not it's just highly consumerist and disgusting