Why are used cars so expensive right now? • Hacker News Board

Re: Why are used cars so expensive right now?

#101

Post by toomuchtodo » Tue, Jul 27, 2021, 2:50 AM UTC

throw123123123 wrote: post #100

toomuchtodo wrote: post #46

Earlier quoted context omitted.

The 2008 global financial crisis was due to a compete failure of risk management in originating mortgages and packaging them as mortgage backed securities. In short, the industry was scraping the barrel and shoveling shit to investors. “If they can fog a mirror, fund the loan” was a phrase common at Countrywide. Lending standards are comparatively tight now, no NINJA loans [1]. The credit market will tighten, but hou…

Your debt gets inflated away gradually while your asset crashes today. If housing went down 30%, virtually all debt in housing sold in the last few years would be underwater, which tends to increase delinquency ("they can take the house back"), which then makes the bank eat that loss and having toxic assets. The core issue is that debt is always risky.

It doesn’t matter if it’s underwater as long as the debt can be serviced. That’s the difference between a margin loan and a mortgage; there is no margin call on a mortgage. It can lose 99% of its value and as long as you still make payments (or your tenants so), you continue to own/control the asset.

Re: Why are used cars so expensive right now?

#102

Post by France_is_bacon » Tue, Jul 27, 2021, 3:52 AM UTC

oceanplexian wrote: post #88

France_is_bacon wrote: post #77

Cash is being pumped into our economy, therefore, people want to buy more stuff, because now they can "afford it." So now with more competition for goods and services, prices go up because there is more money than there are goods and services. I work with businesses in the trades (auto repair, plumbers, HVAC, insulation, etc) and they are all at full throttle, and cannot handle any more work. So those companies are g…

Zimbabwe? Probably not, but I think something similar to Argentina (it is not unusual to see credit card offers with 100%+ interest). We won’t see 1,000x inflation but strojg inflation could be in the cards, especially if we keep expanding the money supply. Eventually something has to give.

Yes, I agree. I was just trying to give an overall feel of the situation, rather than the specifics. I added specifics to help understand, but whether or not it is exact is not really my point, it was to give a 35,000 foot view, while looking at a tree or two in general.

Re: Why are used cars so expensive right now?

#103

Post by throw123123123 » Tue, Jul 27, 2021, 4:31 AM UTC

toomuchtodo wrote: post #101

throw123123123 wrote: post #100

Earlier quoted context omitted.

Your debt gets inflated away gradually while your asset crashes today. If housing went down 30%, virtually all debt in housing sold in the last few years would be underwater, which tends to increase delinquency ("they can take the house back"), which then makes the bank eat that loss and having toxic assets. The core issue is that debt is always risky.

It doesn’t matter if it’s underwater as long as the debt can be serviced. That’s the difference between a margin loan and a mortgage; there is no margin call on a mortgage. It can lose 99% of its value and as long as you still make payments (or your tenants so), you continue to own/control the asset.

Would you pay 1 mill dollars of debt on a 500k house?

Re: Why are used cars so expensive right now?

#104

Post by cdstyh » Tue, Jul 27, 2021, 10:12 AM UTC

chrisan wrote: post #31

emerged wrote: post #16

Is it a good time to sell a used car and buy a new car? Or are the new cars equally as inflated?

you certainly won't be finding a deal new. friend of mine's father owns a group of dealerships in the town, they have people going to other dealers paying MSRP just to have inventory on their lots and sell for more obviously

Yes you can. You just have to shop around. I got well below MSRP out the door a few months ago.

Re: Why are used cars so expensive right now?

#105

Post by toomuchtodo » Tue, Jul 27, 2021, 11:13 AM UTC

throw123123123 wrote: post #103

toomuchtodo wrote: post #101

Earlier quoted context omitted.

It doesn’t matter if it’s underwater as long as the debt can be serviced. That’s the difference between a margin loan and a mortgage; there is no margin call on a mortgage. It can lose 99% of its value and as long as you still make payments (or your tenants so), you continue to own/control the asset.

Would you pay 1 mill dollars of debt on a 500k house?

In certain circumstances, absolutely (if rent payments would be higher than the mortgage payments over the holding period, or if the value of the property would accelerate past the mortgage balance during the holding period).

Re: Why are used cars so expensive right now?

#106

Post by vgeek » Tue, Jul 27, 2021, 3:24 PM UTC

fingerlocks wrote: post #80

hellbannedguy wrote: post #62

Earlier quoted context omitted.

I just noticed a '86 toyota truck on CL going with an asking price of $28,000.00 I noticed it because I like their trucks, especially the 22r/re ones. It did have less than 30,000 miles though. The price of that truck is no more than 5 grand, even with the low miles. (Anyone looking for a ride, I have this tip. When four door vehicles are aging out of what Uber demands, they price of the used vechicle goes way down.…

I think small Toyota trucks are drifting towards some kind collectors status. A few years ago I sold a gen 1 Tacoma for nearly double what I paid, only because someone tipped me off that the price was high for that model on Craigslist. Small, lightweight pickups are no longer being manufactured. And Toyota’s are ridiculously reliable. My old truck still ran like new with nothing but regular oil changes and a one-time…

Ever since the frame recall, the prices have been ludicrous for Tacomas. 1G with the 2/3RZ engines will run forever with little-no maintenance-- multiple people in my family have ones approaching 400k miles. They're utilitarian, rough ride quality, noisy-- but they're trucks (& can get 27mpg highway). Unfortunately, Toyota has kept moving further upmarket and keeps making larger & larger trucks (a $60k Tacoma?) that aren't really as appealing as 4/5th gen pickups or 1g Tacomas.

Around the mid 2000's, something seems to have changed with Toyota-- maybe more emphasis on design & listening to what fat Americans want (wider seats, heavier duty suspensions, more ground clearance to go to Starbucks) vs building high quality functional vehicles. They're still better than others, but it seems that they've had more issues with quality, at least in the models that I've researched.

Re: Why are used cars so expensive right now?

#107

Post by fulafel » Tue, Jul 27, 2021, 5:31 PM UTC

j79 wrote: post #89

voisin wrote: post #82

Earlier quoted context omitted.

Just wait to see what happens to food this year after the current crop failures due to global warming hit the supply chain.

Anyone have suggestions to prepare for this scenario?

Get involved in activism or lobbying and reduce the co2 footprint of your family and job.

Re: Why are used cars so expensive right now?

#108

Post by throw123123123 » Wed, Jul 28, 2021, 2:17 AM UTC

toomuchtodo wrote: post #105

throw123123123 wrote: post #103

Earlier quoted context omitted.

Would you pay 1 mill dollars of debt on a 500k house?

In certain circumstances, absolutely (if rent payments would be higher than the mortgage payments over the holding period, or if the value of the property would accelerate past the mortgage balance during the holding period).

You are only locking yourself with a loss here, and the price is 500k.

Just look at default rates of underwater properties to see how the masses react.

Re: Why are used cars so expensive right now?

#109

Post by [deleted] » Wed, Jul 28, 2021, 2:25 AM UTC

throw123123123 wrote: post #108

toomuchtodo wrote: post #105

Earlier quoted context omitted.

In certain circumstances, absolutely (if rent payments would be higher than the mortgage payments over the holding period, or if the value of the property would accelerate past the mortgage balance during the holding period).

You are only locking yourself with a loss here, and the price is 500k. Just look at default rates of underwater properties to see how the masses react.

[deleted]

Re: Why are used cars so expensive right now?

#110

Post by andrepd » Wed, Jul 28, 2021, 9:23 AM UTC

lapsed_pacifist wrote: post #94

andrepd wrote: post #83

Earlier quoted context omitted.

That's a minor factor. It does not explain how this situation happens all over the world, even where there is no overzealous zoning or high prices of materials. The issue is cheap credit and the lack of an LVT that would avoid all the economical and ethical issues with land ownership.

I don't know how your can say that an LVT avoids all economic and ethical issues with land ownership, that seems like a personal moral opinion. Especially since there's very few instances of an LVT on the wild. I'm sympathetic to Georgism, but you're making a very powerful and unsubstantiated claim.

You're right, I didn't mean "all", I meant "some".

I don't think it's a panacea at all, I just think it would be the most effect with the smallest disruption (in that it's simply a reform to be done inside the framework of free market, private property, etc).