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A new credit bubble gets ready to burst

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Re: A new credit bubble gets ready to burst

#81

Post by jstarfish »

StevePerkins wrote: post #80
chiph wrote: post #29

> And household debt has grown no faster than household income and is concentrated in households best able to pay it back. I'm not so sure about this - what I'm thinking is that the next (current?) bubble is in auto lending. I'm seeing tons of advertisements saying "We will lend up to 72 months with very little down". With the average new car priced around $37500 that's a payment in the mid $500's for someone with go…

> With the average new car priced around $37500 That's absolutely jaw-dropping. I assumed that was a made-up Internet stat, and was going to ask for a cite, but some quick web searching confirms it. I'm a used car guy, typically buying vehicles 2-3 years old, and would never contemplate paying above $20k. Even a brand new sedan (e.g. Nissan Altima, Honda Accord) is around $23k MSRP. A crossover family vehicle (e.g. N…

Pickups and SUVs with insane markups and profit margins.

A Ford F150 Raptor's MSRP is something like $60-70k.

Re: A new credit bubble gets ready to burst

#82

Post by [deleted] »

jstarfish wrote: post #81
StevePerkins wrote: post #80

Earlier quoted context omitted.

> With the average new car priced around $37500 That's absolutely jaw-dropping. I assumed that was a made-up Internet stat, and was going to ask for a cite, but some quick web searching confirms it. I'm a used car guy, typically buying vehicles 2-3 years old, and would never contemplate paying above $20k. Even a brand new sedan (e.g. Nissan Altima, Honda Accord) is around $23k MSRP. A crossover family vehicle (e.g. N…

Pickups and SUVs with insane markups and profit margins. A Ford F150 Raptor's MSRP is something like $60-70k.

[deleted]

Re: A new credit bubble gets ready to burst

#83

Post by gruez »

jstarfish wrote: post #81
StevePerkins wrote: post #80

Earlier quoted context omitted.

> With the average new car priced around $37500 That's absolutely jaw-dropping. I assumed that was a made-up Internet stat, and was going to ask for a cite, but some quick web searching confirms it. I'm a used car guy, typically buying vehicles 2-3 years old, and would never contemplate paying above $20k. Even a brand new sedan (e.g. Nissan Altima, Honda Accord) is around $23k MSRP. A crossover family vehicle (e.g. N…

Pickups and SUVs with insane markups and profit margins. A Ford F150 Raptor's MSRP is something like $60-70k.

>Pickups and SUVs with insane markups and profit margins.

dumb question: why do pickups/suvs have insane markups/profit margins?

Re: A new credit bubble gets ready to burst

#84

Post by [deleted] »

jstarfish wrote: post #81
StevePerkins wrote: post #80

Earlier quoted context omitted.

> With the average new car priced around $37500 That's absolutely jaw-dropping. I assumed that was a made-up Internet stat, and was going to ask for a cite, but some quick web searching confirms it. I'm a used car guy, typically buying vehicles 2-3 years old, and would never contemplate paying above $20k. Even a brand new sedan (e.g. Nissan Altima, Honda Accord) is around $23k MSRP. A crossover family vehicle (e.g. N…

Pickups and SUVs with insane markups and profit margins. A Ford F150 Raptor's MSRP is something like $60-70k.

[deleted]

Re: A new credit bubble gets ready to burst

#85

Post by itsaidpens »

gruez wrote: post #83
jstarfish wrote: post #81

Earlier quoted context omitted.

Pickups and SUVs with insane markups and profit margins. A Ford F150 Raptor's MSRP is something like $60-70k.

>Pickups and SUVs with insane markups and profit margins. dumb question: why do pickups/suvs have insane markups/profit margins?

Think about this - the same amount of tech, of engineering, of “stuff” like window regulators, speakers, steering wheel, etc goes into a subcompact 4 door as does a 4 door SUV, minus cheap stuff like body panels interior carpet.

Re: A new credit bubble gets ready to burst

#86

Post by rdtsc »

gruez wrote: post #83
jstarfish wrote: post #81

Earlier quoted context omitted.

Pickups and SUVs with insane markups and profit margins. A Ford F150 Raptor's MSRP is something like $60-70k.

>Pickups and SUVs with insane markups and profit margins. dumb question: why do pickups/suvs have insane markups/profit margins?

There's a demand for them. SUV are quite popular for families who don't want to "drive minivans" but they still want a large vehicle to fit in everyone. Others buy it because of the perceived safety, larger vehicle so they feel more "protected".

Trucks are just what you drive in rural areas. And there are a lot of small towns and rural areas. Companies noticed that people are shelling out $40k for them, so they started selling them for $50k. $50k and they are being bought still? Ok, time to charge $60k, and so on.

Re: A new credit bubble gets ready to burst

#87

Post by coredog64 »

gruez wrote: post #83
jstarfish wrote: post #81

Earlier quoted context omitted.

Pickups and SUVs with insane markups and profit margins. A Ford F150 Raptor's MSRP is something like $60-70k.

>Pickups and SUVs with insane markups and profit margins. dumb question: why do pickups/suvs have insane markups/profit margins?

Because that’s where manufacturers need to make money. These things typically have fuel economy numbers at or below CAFE standards, so they’re banking on these and selling more efficient vehicles closer to cost.

Re: A new credit bubble gets ready to burst

#88

Post by MisterBastahrd »

StevePerkins wrote: post #80
chiph wrote: post #29

> And household debt has grown no faster than household income and is concentrated in households best able to pay it back. I'm not so sure about this - what I'm thinking is that the next (current?) bubble is in auto lending. I'm seeing tons of advertisements saying "We will lend up to 72 months with very little down". With the average new car priced around $37500 that's a payment in the mid $500's for someone with go…

> With the average new car priced around $37500 That's absolutely jaw-dropping. I assumed that was a made-up Internet stat, and was going to ask for a cite, but some quick web searching confirms it. I'm a used car guy, typically buying vehicles 2-3 years old, and would never contemplate paying above $20k. Even a brand new sedan (e.g. Nissan Altima, Honda Accord) is around $23k MSRP. A crossover family vehicle (e.g. N…

My brother in law probably makes $80k and my sister about the same. He's got a $50K truck and she's got a $40K SUV and they were bragging to me about the deals they got on them. Granted, their house note is very respectable due to the time they bought the property and built their house, and I'm sure that his parents have helped out given that he's an only child and they both make good money. Even still, they each have 20 minute commutes and are rarely in the vehicles other than grocery shopping otherwise.

STILL... I'm paying about $500 a month on my car when you count insurance and car note, and mine is only $24K. The only way anyone is ever getting me to pay more than $30K for a vehicle in this day and age is if I win the lottery or if I absolutely HAD to have a more expensive vehicle to do my job (such as towing or sales).

Re: A new credit bubble gets ready to burst

#90

Post by [deleted] »

chiph wrote: post #29

> And household debt has grown no faster than household income and is concentrated in households best able to pay it back. I'm not so sure about this - what I'm thinking is that the next (current?) bubble is in auto lending. I'm seeing tons of advertisements saying "We will lend up to 72 months with very little down". With the average new car priced around $37500 that's a payment in the mid $500's for someone with go…

[deleted]
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