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Car Owners Fall Behind on Payments at Highest Rate on Record

64 points by belltaco 3y ago

deleted 3y ago
[deleted]
alwayslikethis 3y ago
Everything about cars is a scam. Buying, insurance, and infrastructure. If you live somewhere where you have to drive, you are a captive audience. We need other methods of transportation to compete with cars to reduce overall transportation costs.
- NoMoreNicksLeft 3y ago
  If you live where you have to have a car, no subway's ever going to fix your problem.
- gumballindie 3y ago
  We also need to reduce the need for transportation. There’s no need for traveling to work for many white-collar jobs, except for propping up highly toxic industries such as commercial real estate, restaurants, oil, and of course car sales and manufacturing.
  - gottorf 3y ago
    Maybe we should just reduce the need for white-collar jobs? Since we don't exist in the Metaverse yet, most things that we actually "need" are performed by blue-collar people and almost always involve transporting atoms around. > propping up highly toxic industries such as commercial real estate, restaurants, oil, and of course car sales and manufacturing This reminds me of the assertion that inflation is below 2% now, if we exclude food, energy, shelter, and used cars[0]. Life is great, if we don't meet in person to do work, break bread together, and get ourselves around to provide goods and services? What's left, if you remove the "highly toxic" industries? [0]: https://twitter.com/paulkrugman/status/1712494317024026761 https://twitter.com/paulkrugman/status/1712494317024026761
- ravetcofx 3y ago
  Preach. I moved somewhere where I could be car free and it's very liberating and one less thing to stress about
- xnx 3y ago
  Counterpoint: A modern-era, used, non-luxury, vehicle is an amazing value for a precision-engineered product with astounding utility. There are a lot of places in the US you can get to by car, but not by public transit.
  - tomcar288 3y ago
    it's a good counterpoint. but basically we're saying the car is a good bandaid for the foolishness of city planning (spacing things way too far apart, having the stores be min of 2 miles from most houses, placing disproportionate office space to housing ratio, nearest library like 4 miles away and yet its the size of an amusement park).
  - paxys 3y ago
    Over the last few years used cars have been selling at basically the same price as new (sometimes even more). It is no longer a big money saver to buy used, especially when you factor in increased maintenance/repair costs.
    - xnx 3y ago
      Definitely. Not many deals to be had anymore. A lot of this is due to short supply (supply chain issues with chips, strikes, etc.), but some of it is also due to cars being so much more reliable now (and therefor more valuable even when used).
- tomcar288 3y ago
  don't forget about registration costs, endless repairs and maintenance, parking costs. I'd love to live in a walkable or bikable area.
- chinchilla2020 3y ago
  The problem is that people cannot afford to live in city centers. Especially those with families. You would think corporations would finally place their offices in more liveable areas but for some reason they feel the need to build in city centers, and inconvenience their employees.
  - Moldoteck 3y ago
    There's also a problem with urban planning, zoning & parking req, all of them contributing to less supply of living space
- cooper_ganglia 3y ago
  "If you live somewhere where you have to drive, you are a captive audience" I don't think you appreciate just how incredibly massive this country is. I have to drive 15 miles to work everyday. If I couldn't drive, I would literally just starve and die (or, I suppose start working as a local farmhand). It's funny, I feel the same way about people who live in small areas and don't have the ability to independently go anywhere they want at any time without having to rely on someone else. The "walkable city" feels like a hellscape archetype for the most captive audience you could ever possibly conceive...
  - globular-toast 3y ago
    Every able bodied person can cycle 15 miles. What a shame that people don't even know what their own bodies are capable of. "I would literally starve and die". This is a sad, sad comment. I would laugh but I just find it so sad that you've got all these able bodied adults unable to get around without wheelchairs. Wall-E isn't about the future.
    - vwcx 3y ago
      Some of the most fun I've had outdoors with friends is when they want to try biking (or bikepacking) with me. You're right that people generally have no understanding of what they're capable of (and that no herculean effort is required). I suspect that some of this is a result of humans being increasingly unable to estimate true distances. In my city, it can take 45 minutes to drive 3 miles, so most non-bikers understand 3 miles to be an insurmountable distance.
      - globular-toast 3y ago
        That's a good point. Americans I've met seem to only associate miles with cars. While a British person might say "let's walk, it's only a mile", Americans would say "you can't walk, it's a mile!". Of course, if you do walk a mile then that's a "hike". In British that's also just called a walk.
  - Moldoteck 3y ago
- spicykraken 3y ago
  I think it's fair to say a lot of people bought "too much car" but I completely agree we need better public infrastructure and not be forced to pay the US car tax. Having experienced the public transit systems in Tokyo, Seoul, Singapore, and the midwest US. It's entirely obvious who is failing. Though, despite our short comings, in a lot of cities it _is_ possible to use public transit, I did for years and it sucked and I had to compensate with Uber more often then I would have liked but at least I didn't have a car payment (in hindsight I should have just bought a car, but it was a humbling experience that I don't regret.)
  - gottorf 3y ago
    > and not be forced to pay the US car tax > Having experienced the public transit systems in Tokyo, Seoul, Singapore The Seoul Metro, widely considered to be one of the best in the world, also lost like a billion dollars a year for the past decade or so, with the shortfall made up for by taxes. The story is similar for many transit systems around the world as well as around the US. Now, you could argue that it's worth it, but let's at least make sure we know that there is also a public transit tax, as well.
    - mlsu 3y ago
      California, with a population 4x that of Seoul, recieved 25 billion dollars in federal highway funding (plus 2 billion dollars of its own money) for a single year (2021). Highway funding. Not counting roads. That figure, of course, does not include the amount of money that we spent on our cars to drive on those highways. Maintenance. Insurance. Fees. It does not capture deaths from car accidents (over 4,000, children among them) life changing injuries and maimings (many more than 4,000), choking air pollution, the thousands of tons of tire plastic that washed into the Pacific that year, and obviously the carbon emissions, which probably approached a hundred million tons. Smaller things as well; the stress, the noise, billions of hours spent sitting in traffic. The natural environment that was destroyed to build roads and highways. If you spent 4 billion to cut that incomprehensible number by just 10 percent you would come out ahead -- not by a little but by a monstrous lot. Sorry that came off very heated. I really do hate cars, it's not really directed at you.
buggeryorkshire 3y ago
https://archive.ph/V6GGI https://archive.ph/V6GGI
shostack 3y ago
Is there anywhere that tracks this alongside new and used car prices? Are those softening?
- jeffbee 3y ago
  Not a lot https://fred.stlouisfed.org/series/CUSR0000SETA02 https://fred.stlouisfed.org/series/CUSR0000SETA02
- mikeyouse 3y ago
  Anecdotally, yeah they are.. a lot more incentives lately and though it's a combination of supply + demand, the "days inventory" on dealer lots is back up to what many consider to be a normal level: > The total U.S. supply of available unsold new vehicles climbed to 2.21 million units, the highest level since early spring 2021. That is up 60% from the same time a year ago. However, inventory remains 35% lower than pre-pandemic 2019. Inventory numbers include vehicles available on dealer lots and some in transit. > Days of supply stood at 60 at the start of October, the same as the start of September. Inventory, measured as days’ supply, was 14 days higher than the same time a year ago. Supply has been inching toward that 60-day level, which the industry once considered normal and ideal, throughout the year. It was last in the 60s in March 2021. Prices have come back a bit too.. > In July, the average transaction price (ATP) – the price paid – rose a scant 0.4% from a year ago, the smallest year-over-year price increase in the last decade. According to Kelley Blue Book, the ATP of a new vehicle in July was $48,334, compared with $48,671 in June. Since the start of the year, transaction prices are down 2.7%, or $1,335, the largest January to July fall in the past decade.* https://www.coxautoinc.com/wp-content/uploads/2023/10/September-2023-ATP.jpg https://www.coxautoinc.com/wp-content/uploads/2023/10/Septem...
- xnx 3y ago
  They've softened a little but have further to go: https://site.manheim.com/en/services/consulting/used-vehicle-value-index.html https://site.manheim.com/en/services/consulting/used-vehicle... Now that the market seems to believe that the rates will continue to stay high, I think we'll see the decreasing price trend continue.
- floxy 3y ago
throwaway31338 3y ago
The various "bailouts" over the years (2008 financial crisis, COVID stimulus, PPP loan forgiveness, student loan relief) have left me pretty cynical. I paid my bills and didn't get "bailed out". What can I do to profit from this?
- petepete 3y ago
  Buy a nice car from an auction?
- tomcar288 3y ago
  it's not so much about profit. your earnings (taxes you pay) are paying for other people's debt. and if you save up a little cash then you're really screwed because FIAT is loosing 5 to 10% per year: that's what pays for all that deficit spending.
- karaterobot 3y ago
  No kidding, it is dispiriting. You sort of want there to be a little bit of a cost to making irresponsible decisions. In the end, people with access to the same information as you, but who made a more selfish and short-sighted decision, get bailed out—by you, as a matter of fact, as a tax payer. There ought to be an updated parable of the grasshopper and the ants, where the grasshopper has a great time all summer, then gets bailed out in the winter, then has a great time the following summer, and so on indefinitely.
  - pojzon 3y ago
    Majority of ppl are inresponsible and short-signed. So ppl who run this brothel have only two options on the table: - try to save them from their own stupidity - let the society collapse We would ofcourse survive the collapse of society but majority of rich and poor ppl would die. Rich and powerful want to keep the starus quo of power. So we stay in this limbo of ppl becoming dumber and powerful bailing them out to not lose power. Pretty simple stuff.
  - cooper_ganglia 3y ago
    I feel the same way with student loans. I'm all for government sponsored state universities to compete with tuition at private universities, but to see people who are my age, in their 20s, complaining is so frustrating. I knew these people as teenagers, and I would ask them what their goal in life was. "To go to college" was a common answer. I'd ask them what about after that, and they didn't know, they just knew they HAD to go to college to get a degree and figure it out. They'd get upset with me if I pushed too hard on trying to ask them about specifics about anything, because they didn't care and didn't want to be bothered with it. They just wanted to hang out, have a good time, and not worry about the future. My girlfriend in college had no idea how much her student loans were in total, how long they were financed, whether they were private or federal loans, etc. She just let her parents do all the financing work (they couldn't pay for her, but they did all the paperwork for her), and she just struggled with school while going out and drinking every night. Now she's graduated and we've long since parted ways, but she has a Bachelor's Degree yet she's currently working as a dog groomer and refusing to pay her student loans "because the government shouldn't force me to pay, I was only 18". To see all of these people online now, complaining about how they were "groomed by the banks" to take out student loans drives me crazy. You made a bad decision. Your parents helped you make a bad decision. You need to live with that, and feel some form of "punishment" (in the form of not bailing them out) for not planning better for the future.
mattw2121 3y ago
This is just based on what I personally observe while I drive around. But, I can't help thinking we are in a similar situation to the 2007-2008 housing bubble burst. I see a ton of people driving around in cars that have me asking, "How can they afford that?" The number of people driving exotic and luxury cars is higher than I've ever observed before.
- belltaco 3y ago
  It's borne by stats. https://i2.wp.com/financialsamurai.com/wp-content/uploads/2022/11/IMG_8477.jpg https://i2.wp.com/financialsamurai.com/wp-content/uploads/20...
  - jeffbee 3y ago
    Averages are quite useless for this purpose.
  - gottorf 3y ago
    It's more accurate to compare the average monthly car payment over time, not the total price of the car. The majority of people don't buy the total price, they buy the monthly payment (whether out of innumeracy or a desire to have a better car than they can really afford). I wasn't able to quickly find data, but I would imagine the rise in the average monthly payment is more in line with the rise in the CPI.
    - darrylb42 3y ago
      Last time I was shopping for a car ~4 years ago. Most prices were written on the windshield as weekly payments, over an unknown period. Getting the actual price required stopping and reading the small window sticker.
- tomcar288 3y ago
  and for the most part it's all those insanely expensive pickup trucks. you'd be surprised what people are willing to pay just for a crappy pickup truck (like 50k, 60k, 70k all the way up to 100k or more).
jeffbee 3y ago
A lot of the discourse around this phenomenon seems to center "predatory lending" but it has never looked like that to me, and it seems like a defective argument along the lines of "7 companies caused climate change". The lenders don't come to your house and put a gun to your head. The American consumer is a hedonistic buffoon who wants a gigantic truck, regardless of the fact that their job as the assistant manager in the service department of the truck dealership can't support the $2000/mo all-in cost. Mr. Consumerbot expects the government to suppress fuel prices and regulate insurance prices and bail him out of the loan, even while he spends the remainder of his free time railing against taxation.
- sumtechguy 3y ago
  Then mix in a bad set of EPA curves for cars/trucks and their wheelbase/weight and a small tiny truck which most people would be happy with they can not even buy as they can not make the 50MPG rating they would have to have. So they still want a truck and buy the behemoths we have now.
  - tomcar288 3y ago
    sometimes, i wonder if those allowances for large trucks/SUVs/long wheelbase were purposely designed to subvert the stated goals of increasing MPG.
- wang_li 3y ago
  I, personally, wonder about how much of stuff we're seeing throughout society is due to COVID policy. How many people found themselves flush with money due to things like student loan payment suspension, tax credits, and etc. who went on to spend it frivolously and now can't make their personal finances work with no more cash from the government and resumption of loan payments and so on.
- lern_too_spel 3y ago
  While that's no doubt true, I don't think the student in the article whose 2015 Prius was repossessed falls into that category.
notaustinpowers 3y ago
I've noticed this a lot in my previous work sector (real estate). I've seen many coworkers who would buy these luxury cars, paying almost $1,200/month for the payment and insurance. Mainly because it's what was "expected" of someone in that field. My brother who works in construction is paying a $1,300/month car payment and $350/month insurance for an F-150 because it's what everyone else drives, even though he's 19 and the only thing he hauls in groceries from Aldi. I think a major culprit is our social-focused society creating this desire to keep up with the Jonses' in your social/work circles.
- chinchilla2020 3y ago
  The same people complaining about affordability are usually middle class folks driving a Mercedes.
  - smileysteve 3y ago
    Low interest rates from the 2000s really shifted the American middle class from buying used it off lease into new. Normal rates are doing to shock consumer consumotion, really soon.
  - globular-toast 3y ago
    Whenever I hear anyone making dubious claims about struggling (like "we make over 100k credits and barely making ends meet"), I always ask, what car do you drive? It's amazing how quickly people's expectations change. Once they get in that new car it's the new normal. They'll get just as angry and frustrated in it as any other, but it's now an essential with an insanely high cost. It's also full of hidden costs. People can usually tell you how much they're spending on rent, but what about how much they spend on the car? You need to add up any interest, depreciation, insurance, tax, fuel, regular maintenance, repairs, consumables, tolls, cleaning, and that's not even counting your priceless time spent driving. Car people will just gobble up a random 1k credit repair bill when their gearbox randomly gives out then forget all about it in a few months and never once question if this thing is worth it.
- all2 3y ago
TehShrike 3y ago
I make way more money than the people interviewed for this article, but I've never bought a vehicle that was newer than 10 years old or cost more than 8k. The cars these people bought are unthinkable to me. Presumably there's some cultural difference between me and folks who buy recent vehicles with 5-digit price tags?
- dazc 3y ago
  The main difference, I guess, is that you can afford a better car but don't feel the need to display this? Your $8k vehicle does the job you need it to do and spending any more would be a waste of cash. Someone struggling to afford a fancy car is prioritizing their perceived status over financial prudence.
- TehShrike 3y ago
  and until I bought our Honda Odyssey for ~7k a few years ago, the most I'd spent on a vehicle was 2500$. Maybe the cultural difference is an aversion to debt. My parents never got a loan to buy a vehicle, and I haven't either.
- hackeraccount 3y ago
  If you were buying today would that be possible? I'm kind of looking for a used car and getting something under 15K seems very hard. Of course new under 35K seems hard too.
  - gottorf 3y ago
    > Of course new under 35K seems hard too. You can buy a new base model budget sedan (think Kia Rio, Nissan Versa, etc.) for $20k, or slightly under if you can get a good deal. I myself bought a decent hybrid hatchback for under $30k earlier this year without shopping around too much. It gets over 50mph combined and is quiet and comfortable to drive.
  - TehShrike 3y ago
    Looks like I would have some options, yeah: https://omaha.craigslist.org/search/cta?auto_make_model=honda&max_auto_miles=200000&max_price=15000&min_price=1000&purveyor=owner&query=odyssey#search=1~gallery~0~0 https://omaha.craigslist.org/search/cta?auto_make_model=hond...
0xbadcafebee 3y ago
"We know you need a new car, and we've jacked up its price due to scarcity, but we still want your debt, so here's a nice loan for you to take out."
bluedays 3y ago
Maybe because the price of cars is outrageous. A new Honda Civic is 35,000. Less than ten years ago you could get one around 20-25k. So now your car payment is 40% higher to compensate for the higher price of the vehicles. I know inflation was bad but I’m pretty sure it wasn’t this bad.
- wang_li 3y ago
  In a normal year the target rate of inflation is 2%. Over ten years that will raise prices by more than 20% since it compounds.
- opencl 3y ago
  The base price of a Civic has gone from $18,190 in 2014[1] to $23,950 today[2]. That's 30% which pretty much exactly matches the official CPI inflation numbers. [1] https://hondanews.com/en-US/honda-automobiles/releases/release-0986806e6a694bfc906cacfb52e7dd5f-2014-honda-civic-pricing-and-epa-data-1 https://hondanews.com/en-US/honda-automobiles/releases/relea... [2] https://hondanews.com/en-US/honda-automobiles/releases/release-5003aaa39c009393f5d06d620f08fa05-2024-honda-civic-sedan-pricing-and-epa-ratings https://hondanews.com/en-US/honda-automobiles/releases/relea...
- jeffbee 3y ago
  The top trim Civic Touring, with the most expensive optional paint job and the biggest, ugliest optional wheels, and the most expensive options package, and literally every accessory in the catalog, has an MSRP of $34165.
  - bluedays 3y ago
    I would agree if the MSRP was what vehicles were being sold for.
- 38000106 3y ago
  Assuming USD -- a new Civic is still around $25,000 MSRP. A $20,000 car 10 years ago "should" cost $26,000 now according to the first inflation calculator I could find. 32% cumulative inflation according to them.
DoingSomeThings 3y ago
I bought a used car from a dealership a few months into COVID before the huge price spike. I had outside financing and the salesman couldn't believe my 2.7% rate. In his words "The average person coming in here is trading in a car with negative equity and taking a 10%+ rate." That was pre rate hikes. I can't imagine how high the payment burden is now. Pure anecdote, but that guy left soon after our sale. In his words "I feel dirty facilitating these purchases. It's really screwing people over who are incapable of making sound financial decisions."
- alangibson 3y ago
  An honest salesman? We should put a radio collar on him and study his habits. /sarcasm
xnx 3y ago
The new car bubble feels a lot more real to me than the housing bubble. This is exactly one of the ways that higher interest rates are continuing to bring down inflation.
hn72774 3y ago
Our household has a 2004 sedan with 140k miles, and a 2014 SUV about to hit 100k. Both fully paid. I had a college econ professor explain that the best way to save money on a car is not to buy used (everyone's first guess). It's to drive it until "the wheels fall off." Depreciation is the biggest cost of car ownership and it stops at a certain point in a car's life. If the car is maintained well, several hundred thousand miles is even doable. I took that advice to heart.
- alangibson 3y ago
  The best auto advice I ever got was to buy a 2 year old (avoid the depreciation cliff) Toyota (durability) and drive it until it rusts into the ground (drive as many of those depreciation-free miles as possible).
  - ramesh31 3y ago
    > The best auto advice I ever got was to buy a 2 year old (avoid the depreciation cliff) Toyota (durability) and drive it until it rusts into the ground (drive as many of those depreciation-free miles as possible). You're still eating a good amount of it at two years. Five is where the curve flattens out. The objectively best used car to buy is a single owner 5 year old Toyota Corolla with 60,000 miles.
    - hackeraccount 3y ago
      In today's market what is that? 20K 25K ? You're saving 10K or so for a bet that the original owner was reasonably responsible.
      - ramesh31 3y ago
        > In today's market what is that? 20K 25K ? You're saving 10K or so for a bet that the original owner was reasonably responsible. About $15k: https://www.kbb.com/toyota/corolla/2018/le-sedan-4d/?category=sedan&color=black&condition=good&intent=buy-used&mileage=60000&options=8066950%7Ctrue&pricetype=retail&vehicleid=431099 https://www.kbb.com/toyota/corolla/2018/le-sedan-4d/?categor... And I'm not sure what you consider a good deal, but $10k is a lot of money; nearly half the price of the car which has >80% of its useful life left.
DoingSomeThings 3y ago
As others are pointing out, there's a general problem with financial literacy in the USA population, exacerbated by a culture that values flashy signs of wealth. But it's not the whole story. There's a macro problem that that cars often are necessary to function in USA cities. With limited public transit, especially in the suburbs/exurbs where below median earners are forced to live, getting to a job requires a car. And cars are expensive, no matter how you slice it. Our city designs make it doubly hard to be poor. I feel for low income earners - They're least able to afford extra expenses, have the least ability to devote mental/time resources to rate/price shopping, and get hit with the highest rates due to low income / low credit. Even if you want to make a good choice, the finances are stacked against you.
- sneed_chucker 3y ago
  This is by design. Consumer spending is something like 60% of the US economy. A deeply engrained conspicuous consumption culture and normalization of debt for non-essential purchases keep the great beast fed.
- freedomben 3y ago
  Yep. I don't remember where I first heard it at this point, but throughout my life this has felt true more times than I can count: It's expensive to be poor.
ramesh31 3y ago
Cars have actually only gotten cheaper, it's just that the marketing has convinced people they need things they truly don't. Take for instance the Nissan Versa: https://www.nissanusa.com/vehicles/cars/versa-sedan.html https://www.nissanusa.com/vehicles/cars/versa-sedan.html. This car starts at $17k new, and is an objectively better vehicle in every single possible way than anything you could have bought 20 years ago short of high end luxury. Cars are one of the few consumer goods that have only gotten cheaper and better over time (particularly when inflation is taken into account). But marketers doing what they do, everyone is now convinced they need a $40,000 luxury vehicle to buy groceries and drive to work. It is entirely a cultural issue combined with predatory lending, not a lack of cheap cars to buy.
- floxy 3y ago
  What are the top 3 ways in which the 2024 Nissan Versa is better than say a 2004 Toyota Corolla? Better fuel efficiency? Less expensive when adjusting for inflation? More electronic doodads? https://www.edmunds.com/toyota/corolla/2004/features-specs/ https://www.edmunds.com/toyota/corolla/2004/features-specs/
  - ramesh31 3y ago
    > What are the top 3 ways in which the 2024 Nissan Versa is better than say a 2004 Toyota Corolla? Better fuel efficiency? Less expensive when adjusting for inflation? More electronic doodads? Everything. Safety: Full curtain airbags, LKAS, pedestrian e-stop, better crumple zones, backup camera, blind spot warning Economy: 40 MPG highway vs 30, better aerodynamics, longer oil change intervals Performance: Electronic power steering, traction control, full disc brakes with ABS Features: Apple carplay, cruise control, push button start, power windows/locks, e-parking brake, LED headlights, keyless entry You really can't even compare a car today to something 20 years ago, and adjusted for inflation the Versa starts at $5k cheaper than that Corolla did new in 2004.
Kye 3y ago
You can't really be sure what will cause an economic crisis. There's usually multiple factors working in a cascade, and it's only ever clear in retrospect. Even then, you get disagreement. Car owners falling behind on payments in record numbers could be nothing in terms of the history of the next global economic crisis. Or it could be among the dominoes.

64 points by belltaco 3y ago

deleted 3y ago

[deleted]

Everything about cars is a scam. Buying, insurance, and infrastructure. If you live somewhere where you have to drive, you are a captive audience. We need other methods of transportation to compete with cars to reduce overall transportation costs.

NoMoreNicksLeft 3y ago
If you live where you have to have a car, no subway's ever going to fix your problem.
gumballindie 3y ago
We also need to reduce the need for transportation. There’s no need for traveling to work for many white-collar jobs, except for propping up highly toxic industries such as commercial real estate, restaurants, oil, and of course car sales and manufacturing.
- gottorf 3y ago
  Maybe we should just reduce the need for white-collar jobs? Since we don't exist in the Metaverse yet, most things that we actually "need" are performed by blue-collar people and almost always involve transporting atoms around. > propping up highly toxic industries such as commercial real estate, restaurants, oil, and of course car sales and manufacturing This reminds me of the assertion that inflation is below 2% now, if we exclude food, energy, shelter, and used cars[0]. Life is great, if we don't meet in person to do work, break bread together, and get ourselves around to provide goods and services? What's left, if you remove the "highly toxic" industries? [0]: https://twitter.com/paulkrugman/status/1712494317024026761 https://twitter.com/paulkrugman/status/1712494317024026761
ravetcofx 3y ago
Preach. I moved somewhere where I could be car free and it's very liberating and one less thing to stress about
xnx 3y ago
Counterpoint: A modern-era, used, non-luxury, vehicle is an amazing value for a precision-engineered product with astounding utility. There are a lot of places in the US you can get to by car, but not by public transit.
- tomcar288 3y ago
  it's a good counterpoint. but basically we're saying the car is a good bandaid for the foolishness of city planning (spacing things way too far apart, having the stores be min of 2 miles from most houses, placing disproportionate office space to housing ratio, nearest library like 4 miles away and yet its the size of an amusement park).
- paxys 3y ago
  Over the last few years used cars have been selling at basically the same price as new (sometimes even more). It is no longer a big money saver to buy used, especially when you factor in increased maintenance/repair costs.
  - xnx 3y ago
    Definitely. Not many deals to be had anymore. A lot of this is due to short supply (supply chain issues with chips, strikes, etc.), but some of it is also due to cars being so much more reliable now (and therefor more valuable even when used).
tomcar288 3y ago
don't forget about registration costs, endless repairs and maintenance, parking costs. I'd love to live in a walkable or bikable area.
chinchilla2020 3y ago
The problem is that people cannot afford to live in city centers. Especially those with families. You would think corporations would finally place their offices in more liveable areas but for some reason they feel the need to build in city centers, and inconvenience their employees.
- Moldoteck 3y ago
  There's also a problem with urban planning, zoning & parking req, all of them contributing to less supply of living space
cooper_ganglia 3y ago
"If you live somewhere where you have to drive, you are a captive audience" I don't think you appreciate just how incredibly massive this country is. I have to drive 15 miles to work everyday. If I couldn't drive, I would literally just starve and die (or, I suppose start working as a local farmhand). It's funny, I feel the same way about people who live in small areas and don't have the ability to independently go anywhere they want at any time without having to rely on someone else. The "walkable city" feels like a hellscape archetype for the most captive audience you could ever possibly conceive...
- globular-toast 3y ago
  Every able bodied person can cycle 15 miles. What a shame that people don't even know what their own bodies are capable of. "I would literally starve and die". This is a sad, sad comment. I would laugh but I just find it so sad that you've got all these able bodied adults unable to get around without wheelchairs. Wall-E isn't about the future.
  - vwcx 3y ago
    Some of the most fun I've had outdoors with friends is when they want to try biking (or bikepacking) with me. You're right that people generally have no understanding of what they're capable of (and that no herculean effort is required). I suspect that some of this is a result of humans being increasingly unable to estimate true distances. In my city, it can take 45 minutes to drive 3 miles, so most non-bikers understand 3 miles to be an insurmountable distance.
    - globular-toast 3y ago
      That's a good point. Americans I've met seem to only associate miles with cars. While a British person might say "let's walk, it's only a mile", Americans would say "you can't walk, it's a mile!". Of course, if you do walk a mile then that's a "hike". In British that's also just called a walk.
- Moldoteck 3y ago
spicykraken 3y ago
I think it's fair to say a lot of people bought "too much car" but I completely agree we need better public infrastructure and not be forced to pay the US car tax. Having experienced the public transit systems in Tokyo, Seoul, Singapore, and the midwest US. It's entirely obvious who is failing. Though, despite our short comings, in a lot of cities it _is_ possible to use public transit, I did for years and it sucked and I had to compensate with Uber more often then I would have liked but at least I didn't have a car payment (in hindsight I should have just bought a car, but it was a humbling experience that I don't regret.)
- gottorf 3y ago
  > and not be forced to pay the US car tax > Having experienced the public transit systems in Tokyo, Seoul, Singapore The Seoul Metro, widely considered to be one of the best in the world, also lost like a billion dollars a year for the past decade or so, with the shortfall made up for by taxes. The story is similar for many transit systems around the world as well as around the US. Now, you could argue that it's worth it, but let's at least make sure we know that there is also a public transit tax, as well.
  - mlsu 3y ago
    California, with a population 4x that of Seoul, recieved 25 billion dollars in federal highway funding (plus 2 billion dollars of its own money) for a single year (2021). Highway funding. Not counting roads. That figure, of course, does not include the amount of money that we spent on our cars to drive on those highways. Maintenance. Insurance. Fees. It does not capture deaths from car accidents (over 4,000, children among them) life changing injuries and maimings (many more than 4,000), choking air pollution, the thousands of tons of tire plastic that washed into the Pacific that year, and obviously the carbon emissions, which probably approached a hundred million tons. Smaller things as well; the stress, the noise, billions of hours spent sitting in traffic. The natural environment that was destroyed to build roads and highways. If you spent 4 billion to cut that incomprehensible number by just 10 percent you would come out ahead -- not by a little but by a monstrous lot. Sorry that came off very heated. I really do hate cars, it's not really directed at you.

buggeryorkshire 3y ago

https://archive.ph/V6GGI https://archive.ph/V6GGI

shostack 3y ago

Is there anywhere that tracks this alongside new and used car prices? Are those softening?

jeffbee 3y ago
Not a lot https://fred.stlouisfed.org/series/CUSR0000SETA02 https://fred.stlouisfed.org/series/CUSR0000SETA02
mikeyouse 3y ago
Anecdotally, yeah they are.. a lot more incentives lately and though it's a combination of supply + demand, the "days inventory" on dealer lots is back up to what many consider to be a normal level: > The total U.S. supply of available unsold new vehicles climbed to 2.21 million units, the highest level since early spring 2021. That is up 60% from the same time a year ago. However, inventory remains 35% lower than pre-pandemic 2019. Inventory numbers include vehicles available on dealer lots and some in transit. > Days of supply stood at 60 at the start of October, the same as the start of September. Inventory, measured as days’ supply, was 14 days higher than the same time a year ago. Supply has been inching toward that 60-day level, which the industry once considered normal and ideal, throughout the year. It was last in the 60s in March 2021. Prices have come back a bit too.. > In July, the average transaction price (ATP) – the price paid – rose a scant 0.4% from a year ago, the smallest year-over-year price increase in the last decade. According to Kelley Blue Book, the ATP of a new vehicle in July was $48,334, compared with $48,671 in June. Since the start of the year, transaction prices are down 2.7%, or $1,335, the largest January to July fall in the past decade.* https://www.coxautoinc.com/wp-content/uploads/2023/10/September-2023-ATP.jpg https://www.coxautoinc.com/wp-content/uploads/2023/10/Septem...
xnx 3y ago
They've softened a little but have further to go: https://site.manheim.com/en/services/consulting/used-vehicle-value-index.html https://site.manheim.com/en/services/consulting/used-vehicle... Now that the market seems to believe that the rates will continue to stay high, I think we'll see the decreasing price trend continue.
floxy 3y ago

throwaway31338 3y ago

The various "bailouts" over the years (2008 financial crisis, COVID stimulus, PPP loan forgiveness, student loan relief) have left me pretty cynical. I paid my bills and didn't get "bailed out". What can I do to profit from this?

petepete 3y ago
Buy a nice car from an auction?
tomcar288 3y ago
it's not so much about profit. your earnings (taxes you pay) are paying for other people's debt. and if you save up a little cash then you're really screwed because FIAT is loosing 5 to 10% per year: that's what pays for all that deficit spending.
karaterobot 3y ago
No kidding, it is dispiriting. You sort of want there to be a little bit of a cost to making irresponsible decisions. In the end, people with access to the same information as you, but who made a more selfish and short-sighted decision, get bailed out—by you, as a matter of fact, as a tax payer. There ought to be an updated parable of the grasshopper and the ants, where the grasshopper has a great time all summer, then gets bailed out in the winter, then has a great time the following summer, and so on indefinitely.
- pojzon 3y ago
  Majority of ppl are inresponsible and short-signed. So ppl who run this brothel have only two options on the table: - try to save them from their own stupidity - let the society collapse We would ofcourse survive the collapse of society but majority of rich and poor ppl would die. Rich and powerful want to keep the starus quo of power. So we stay in this limbo of ppl becoming dumber and powerful bailing them out to not lose power. Pretty simple stuff.
- cooper_ganglia 3y ago
  I feel the same way with student loans. I'm all for government sponsored state universities to compete with tuition at private universities, but to see people who are my age, in their 20s, complaining is so frustrating. I knew these people as teenagers, and I would ask them what their goal in life was. "To go to college" was a common answer. I'd ask them what about after that, and they didn't know, they just knew they HAD to go to college to get a degree and figure it out. They'd get upset with me if I pushed too hard on trying to ask them about specifics about anything, because they didn't care and didn't want to be bothered with it. They just wanted to hang out, have a good time, and not worry about the future. My girlfriend in college had no idea how much her student loans were in total, how long they were financed, whether they were private or federal loans, etc. She just let her parents do all the financing work (they couldn't pay for her, but they did all the paperwork for her), and she just struggled with school while going out and drinking every night. Now she's graduated and we've long since parted ways, but she has a Bachelor's Degree yet she's currently working as a dog groomer and refusing to pay her student loans "because the government shouldn't force me to pay, I was only 18". To see all of these people online now, complaining about how they were "groomed by the banks" to take out student loans drives me crazy. You made a bad decision. Your parents helped you make a bad decision. You need to live with that, and feel some form of "punishment" (in the form of not bailing them out) for not planning better for the future.

mattw2121 3y ago

This is just based on what I personally observe while I drive around. But, I can't help thinking we are in a similar situation to the 2007-2008 housing bubble burst. I see a ton of people driving around in cars that have me asking, "How can they afford that?" The number of people driving exotic and luxury cars is higher than I've ever observed before.

belltaco 3y ago
It's borne by stats. https://i2.wp.com/financialsamurai.com/wp-content/uploads/2022/11/IMG_8477.jpg https://i2.wp.com/financialsamurai.com/wp-content/uploads/20...
- jeffbee 3y ago
  Averages are quite useless for this purpose.
- gottorf 3y ago
  It's more accurate to compare the average monthly car payment over time, not the total price of the car. The majority of people don't buy the total price, they buy the monthly payment (whether out of innumeracy or a desire to have a better car than they can really afford). I wasn't able to quickly find data, but I would imagine the rise in the average monthly payment is more in line with the rise in the CPI.
  - darrylb42 3y ago
    Last time I was shopping for a car ~4 years ago. Most prices were written on the windshield as weekly payments, over an unknown period. Getting the actual price required stopping and reading the small window sticker.
tomcar288 3y ago
and for the most part it's all those insanely expensive pickup trucks. you'd be surprised what people are willing to pay just for a crappy pickup truck (like 50k, 60k, 70k all the way up to 100k or more).

jeffbee 3y ago

A lot of the discourse around this phenomenon seems to center "predatory lending" but it has never looked like that to me, and it seems like a defective argument along the lines of "7 companies caused climate change". The lenders don't come to your house and put a gun to your head. The American consumer is a hedonistic buffoon who wants a gigantic truck, regardless of the fact that their job as the assistant manager in the service department of the truck dealership can't support the $2000/mo all-in cost. Mr. Consumerbot expects the government to suppress fuel prices and regulate insurance prices and bail him out of the loan, even while he spends the remainder of his free time railing against taxation.

sumtechguy 3y ago
Then mix in a bad set of EPA curves for cars/trucks and their wheelbase/weight and a small tiny truck which most people would be happy with they can not even buy as they can not make the 50MPG rating they would have to have. So they still want a truck and buy the behemoths we have now.
- tomcar288 3y ago
  sometimes, i wonder if those allowances for large trucks/SUVs/long wheelbase were purposely designed to subvert the stated goals of increasing MPG.
wang_li 3y ago
I, personally, wonder about how much of stuff we're seeing throughout society is due to COVID policy. How many people found themselves flush with money due to things like student loan payment suspension, tax credits, and etc. who went on to spend it frivolously and now can't make their personal finances work with no more cash from the government and resumption of loan payments and so on.
lern_too_spel 3y ago
While that's no doubt true, I don't think the student in the article whose 2015 Prius was repossessed falls into that category.

notaustinpowers 3y ago

I've noticed this a lot in my previous work sector (real estate). I've seen many coworkers who would buy these luxury cars, paying almost $1,200/month for the payment and insurance. Mainly because it's what was "expected" of someone in that field. My brother who works in construction is paying a $1,300/month car payment and $350/month insurance for an F-150 because it's what everyone else drives, even though he's 19 and the only thing he hauls in groceries from Aldi. I think a major culprit is our social-focused society creating this desire to keep up with the Jonses' in your social/work circles.

chinchilla2020 3y ago
The same people complaining about affordability are usually middle class folks driving a Mercedes.
- smileysteve 3y ago
  Low interest rates from the 2000s really shifted the American middle class from buying used it off lease into new. Normal rates are doing to shock consumer consumotion, really soon.
- globular-toast 3y ago
  Whenever I hear anyone making dubious claims about struggling (like "we make over 100k credits and barely making ends meet"), I always ask, what car do you drive? It's amazing how quickly people's expectations change. Once they get in that new car it's the new normal. They'll get just as angry and frustrated in it as any other, but it's now an essential with an insanely high cost. It's also full of hidden costs. People can usually tell you how much they're spending on rent, but what about how much they spend on the car? You need to add up any interest, depreciation, insurance, tax, fuel, regular maintenance, repairs, consumables, tolls, cleaning, and that's not even counting your priceless time spent driving. Car people will just gobble up a random 1k credit repair bill when their gearbox randomly gives out then forget all about it in a few months and never once question if this thing is worth it.
all2 3y ago

TehShrike 3y ago

I make way more money than the people interviewed for this article, but I've never bought a vehicle that was newer than 10 years old or cost more than 8k. The cars these people bought are unthinkable to me. Presumably there's some cultural difference between me and folks who buy recent vehicles with 5-digit price tags?

dazc 3y ago
The main difference, I guess, is that you can afford a better car but don't feel the need to display this? Your $8k vehicle does the job you need it to do and spending any more would be a waste of cash. Someone struggling to afford a fancy car is prioritizing their perceived status over financial prudence.
TehShrike 3y ago
and until I bought our Honda Odyssey for ~7k a few years ago, the most I'd spent on a vehicle was 2500$. Maybe the cultural difference is an aversion to debt. My parents never got a loan to buy a vehicle, and I haven't either.
hackeraccount 3y ago
If you were buying today would that be possible? I'm kind of looking for a used car and getting something under 15K seems very hard. Of course new under 35K seems hard too.
- gottorf 3y ago
  > Of course new under 35K seems hard too. You can buy a new base model budget sedan (think Kia Rio, Nissan Versa, etc.) for $20k, or slightly under if you can get a good deal. I myself bought a decent hybrid hatchback for under $30k earlier this year without shopping around too much. It gets over 50mph combined and is quiet and comfortable to drive.
- TehShrike 3y ago
  Looks like I would have some options, yeah: https://omaha.craigslist.org/search/cta?auto_make_model=honda&max_auto_miles=200000&max_price=15000&min_price=1000&purveyor=owner&query=odyssey#search=1~gallery~0~0 https://omaha.craigslist.org/search/cta?auto_make_model=hond...

0xbadcafebee 3y ago

"We know you need a new car, and we've jacked up its price due to scarcity, but we still want your debt, so here's a nice loan for you to take out."

bluedays 3y ago

Maybe because the price of cars is outrageous. A new Honda Civic is 35,000. Less than ten years ago you could get one around 20-25k. So now your car payment is 40% higher to compensate for the higher price of the vehicles. I know inflation was bad but I’m pretty sure it wasn’t this bad.

wang_li 3y ago
In a normal year the target rate of inflation is 2%. Over ten years that will raise prices by more than 20% since it compounds.
opencl 3y ago
The base price of a Civic has gone from $18,190 in 2014[1] to $23,950 today[2]. That's 30% which pretty much exactly matches the official CPI inflation numbers. [1] https://hondanews.com/en-US/honda-automobiles/releases/release-0986806e6a694bfc906cacfb52e7dd5f-2014-honda-civic-pricing-and-epa-data-1 https://hondanews.com/en-US/honda-automobiles/releases/relea... [2] https://hondanews.com/en-US/honda-automobiles/releases/release-5003aaa39c009393f5d06d620f08fa05-2024-honda-civic-sedan-pricing-and-epa-ratings https://hondanews.com/en-US/honda-automobiles/releases/relea...
jeffbee 3y ago
The top trim Civic Touring, with the most expensive optional paint job and the biggest, ugliest optional wheels, and the most expensive options package, and literally every accessory in the catalog, has an MSRP of $34165.
- bluedays 3y ago
  I would agree if the MSRP was what vehicles were being sold for.
38000106 3y ago
Assuming USD -- a new Civic is still around $25,000 MSRP. A $20,000 car 10 years ago "should" cost $26,000 now according to the first inflation calculator I could find. 32% cumulative inflation according to them.

DoingSomeThings 3y ago

I bought a used car from a dealership a few months into COVID before the huge price spike. I had outside financing and the salesman couldn't believe my 2.7% rate. In his words "The average person coming in here is trading in a car with negative equity and taking a 10%+ rate." That was pre rate hikes. I can't imagine how high the payment burden is now. Pure anecdote, but that guy left soon after our sale. In his words "I feel dirty facilitating these purchases. It's really screwing people over who are incapable of making sound financial decisions."

alangibson 3y ago
An honest salesman? We should put a radio collar on him and study his habits. /sarcasm

xnx 3y ago

The new car bubble feels a lot more real to me than the housing bubble. This is exactly one of the ways that higher interest rates are continuing to bring down inflation.

hn72774 3y ago

Our household has a 2004 sedan with 140k miles, and a 2014 SUV about to hit 100k. Both fully paid. I had a college econ professor explain that the best way to save money on a car is not to buy used (everyone's first guess). It's to drive it until "the wheels fall off." Depreciation is the biggest cost of car ownership and it stops at a certain point in a car's life. If the car is maintained well, several hundred thousand miles is even doable. I took that advice to heart.

alangibson 3y ago
The best auto advice I ever got was to buy a 2 year old (avoid the depreciation cliff) Toyota (durability) and drive it until it rusts into the ground (drive as many of those depreciation-free miles as possible).
- ramesh31 3y ago
  > The best auto advice I ever got was to buy a 2 year old (avoid the depreciation cliff) Toyota (durability) and drive it until it rusts into the ground (drive as many of those depreciation-free miles as possible). You're still eating a good amount of it at two years. Five is where the curve flattens out. The objectively best used car to buy is a single owner 5 year old Toyota Corolla with 60,000 miles.
  - hackeraccount 3y ago
    In today's market what is that? 20K 25K ? You're saving 10K or so for a bet that the original owner was reasonably responsible.
    - ramesh31 3y ago
      > In today's market what is that? 20K 25K ? You're saving 10K or so for a bet that the original owner was reasonably responsible. About $15k: https://www.kbb.com/toyota/corolla/2018/le-sedan-4d/?category=sedan&color=black&condition=good&intent=buy-used&mileage=60000&options=8066950%7Ctrue&pricetype=retail&vehicleid=431099 https://www.kbb.com/toyota/corolla/2018/le-sedan-4d/?categor... And I'm not sure what you consider a good deal, but $10k is a lot of money; nearly half the price of the car which has >80% of its useful life left.

DoingSomeThings 3y ago

As others are pointing out, there's a general problem with financial literacy in the USA population, exacerbated by a culture that values flashy signs of wealth. But it's not the whole story. There's a macro problem that that cars often are necessary to function in USA cities. With limited public transit, especially in the suburbs/exurbs where below median earners are forced to live, getting to a job requires a car. And cars are expensive, no matter how you slice it. Our city designs make it doubly hard to be poor. I feel for low income earners - They're least able to afford extra expenses, have the least ability to devote mental/time resources to rate/price shopping, and get hit with the highest rates due to low income / low credit. Even if you want to make a good choice, the finances are stacked against you.

sneed_chucker 3y ago
This is by design. Consumer spending is something like 60% of the US economy. A deeply engrained conspicuous consumption culture and normalization of debt for non-essential purchases keep the great beast fed.
freedomben 3y ago
Yep. I don't remember where I first heard it at this point, but throughout my life this has felt true more times than I can count: It's expensive to be poor.

ramesh31 3y ago

Cars have actually only gotten cheaper, it's just that the marketing has convinced people they need things they truly don't. Take for instance the Nissan Versa: https://www.nissanusa.com/vehicles/cars/versa-sedan.html https://www.nissanusa.com/vehicles/cars/versa-sedan.html. This car starts at $17k new, and is an objectively better vehicle in every single possible way than anything you could have bought 20 years ago short of high end luxury. Cars are one of the few consumer goods that have only gotten cheaper and better over time (particularly when inflation is taken into account). But marketers doing what they do, everyone is now convinced they need a $40,000 luxury vehicle to buy groceries and drive to work. It is entirely a cultural issue combined with predatory lending, not a lack of cheap cars to buy.

floxy 3y ago
What are the top 3 ways in which the 2024 Nissan Versa is better than say a 2004 Toyota Corolla? Better fuel efficiency? Less expensive when adjusting for inflation? More electronic doodads? https://www.edmunds.com/toyota/corolla/2004/features-specs/ https://www.edmunds.com/toyota/corolla/2004/features-specs/
- ramesh31 3y ago
  > What are the top 3 ways in which the 2024 Nissan Versa is better than say a 2004 Toyota Corolla? Better fuel efficiency? Less expensive when adjusting for inflation? More electronic doodads? Everything. Safety: Full curtain airbags, LKAS, pedestrian e-stop, better crumple zones, backup camera, blind spot warning Economy: 40 MPG highway vs 30, better aerodynamics, longer oil change intervals Performance: Electronic power steering, traction control, full disc brakes with ABS Features: Apple carplay, cruise control, push button start, power windows/locks, e-parking brake, LED headlights, keyless entry You really can't even compare a car today to something 20 years ago, and adjusted for inflation the Versa starts at $5k cheaper than that Corolla did new in 2004.

Kye 3y ago

You can't really be sure what will cause an economic crisis. There's usually multiple factors working in a cascade, and it's only ever clear in retrospect. Even then, you get disagreement. Car owners falling behind on payments in record numbers could be nothing in terms of the history of the next global economic crisis. Or it could be among the dominoes.