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Americans can't afford their cars any more and Wall Street is worried

telegraph.co.uk

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Re: Americans can't afford their cars any more and Wall Street is worried

#11

Post by giobox »

vondur wrote: post #3

I’ve seen some crazy stories on YouTube about people trading in cars they’re already underwater on just to finance an even more expensive one. I can’t understand why banks keep lending money for deals like that.

> I’ve seen some crazy stories on YouTube about people trading in cars they’re already underwater on just to finance an even more expensive one.

This has happened for as long as there has been car finance (i.e. practically since the dawn of private vehicle ownership), it's nothing new.

Given most folks cannot purchase a vehicle outright, the customer only really cares about the monthly payment, a sizeable amount of whom do not even understand the concept of being "underwater" on a trade in. The industry has always preyed upon the financial stupidity of most car buyers.

Re: Americans can't afford their cars any more and Wall Street is worried

#14

Post by foobarian »

pengaru wrote: post #6
vondur wrote: post #3

I’ve seen some crazy stories on YouTube about people trading in cars they’re already underwater on just to finance an even more expensive one. I can’t understand why banks keep lending money for deals like that.

Nothing new there. My childhood friend's brother has gone through so many new cars I lost track, and never paid off a single one of those loans. We're talking a pattern that began in the late 90s with this guy. He now lives out of a truck that's.... wait for it, not paid for! "There's one born every minute"

I mean... I guess he's been in new cars his whole life then? And he manages to come up with the money for it. Good for him? Wonder what sacrifices he made in other areas of his life as a trade.

Re: Americans can't afford their cars any more and Wall Street is worried

#15

Post by kristopolous »

And yet automakers think that the smaller more affordable cars that do well overseas somehow have no audience in the US.

For instance, the Geome Xingyuan is $10k, Hongguang Mini EV is $5k.

Instead we have the average cost of a new car at $50k.

Re: Americans can't afford their cars any more and Wall Street is worried

#16

Post by bombcar »

giobox wrote: post #11
vondur wrote: post #3

I’ve seen some crazy stories on YouTube about people trading in cars they’re already underwater on just to finance an even more expensive one. I can’t understand why banks keep lending money for deals like that.

> I’ve seen some crazy stories on YouTube about people trading in cars they’re already underwater on just to finance an even more expensive one. This has happened for as long as there has been car finance (i.e. practically since the dawn of private vehicle ownership), it's nothing new. Given most folks cannot purchase a vehicle outright, the customer only really cares about the monthly payment, a sizeable amount of w…

Arguably cars became “unaffordable” sometime when loans became common - what percentage of cars being bought in credit can be argued, but clearly it’s become more and more.

Re: Americans can't afford their cars any more and Wall Street is worried

#17

Post by bombcar »

Hammershaft wrote: post #9
o11c wrote: post #8

Earlier quoted context omitted.

It's in the bank's best interest to have constant revenue stream, even if that means destroying lives. Cars keep their value much better than, say, houses.

What!? Houses degrade but the land it sits on usually appreciates faster.

Maybe in silly-con valley.

Around most places the land goes up very slowly, but the house’s depreciation is reduced by steady repairs.

Re: Americans can't afford their cars any more and Wall Street is worried

#18

Post by decimalenough »

kristopolous wrote: post #15

And yet automakers think that the smaller more affordable cars that do well overseas somehow have no audience in the US. For instance, the Geome Xingyuan is $10k, Hongguang Mini EV is $5k. Instead we have the average cost of a new car at $50k.

If they sold well in the US, they would bring in more of them. But they don't.

Re: Americans can't afford their cars any more and Wall Street is worried

#19

Post by caterama »

DaveZale wrote: post #4

I use the Loud Muffler Index for judging the economy. Traffic gets louder when working people are under financial stress. It's easily measurable.

Disagree. Do you mean that vehicles gets louder because people skip maintenance? Or more stress produces more honking? An opposite effect: more financial stress means less spending on aftermarket exhaust mods means quieter traffic. Also, financial stress means less driving means less noise. Overall, I doubt you're going to find much signal in the noise!

Re: Americans can't afford their cars any more and Wall Street is worried

#20

Post by eightysixfour »

decimalenough wrote: post #18
kristopolous wrote: post #15

And yet automakers think that the smaller more affordable cars that do well overseas somehow have no audience in the US. For instance, the Geome Xingyuan is $10k, Hongguang Mini EV is $5k. Instead we have the average cost of a new car at $50k.

If they sold well in the US, they would bring in more of them. But they don't.

This is the argument everyone was making for small trucks until Ford brought in the Maverick and demand was so high they couldn't keep them on lots. When they bring is right sized vehicles thay don't suck, we but them.
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