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US car repossessions surge as more Americans default on auto loans

theguardian.com

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Re: US car repossessions surge as more Americans default on auto loans

#101

Post by _heimdall »

raw_anon_1111 wrote: post #91
ryandrake wrote: post #60

Earlier quoted context omitted.

Exactly. This is going to come off as incredibly privileged, but I'm not a huge fan of car loans. In fact, I'm not a huge fan of leveraging to afford any asset unless it's appreciating in value or generating income. I buy and drive old, nearly junker cars because I can't afford a $40K new car. I can "afford" the monthly payments on a $40K car, but it's just a terrible financial idea. Totally nutty. A $750 monthly pay…

The problem with old junkers is that if you don’t have the money in cash, how do you fix a major car repair? You can get a loan for a new car with money. The car “generates income” because it allows you to get to work and hopefully make more than your car note.

Old car repairs generally don't cost as much as you'd expect, especially when you aren't paying $750/no on a loan plus higher insurance premiums.

My mechanics often perk up when I bring in my 80s era pickup. It has very low miles, they can generally diagnose it with very basic tools, and parts are cheap. When I have the time to work on it myself I appreciate it for those exact same reasons.

Re: US car repossessions surge as more Americans default on auto loans

#102

Post by raw_anon_1111 »

_heimdall wrote: post #101
raw_anon_1111 wrote: post #91

Earlier quoted context omitted.

The problem with old junkers is that if you don’t have the money in cash, how do you fix a major car repair? You can get a loan for a new car with money. The car “generates income” because it allows you to get to work and hopefully make more than your car note.

Old car repairs generally don't cost as much as you'd expect, especially when you aren't paying $750/no on a loan plus higher insurance premiums. My mechanics often perk up when I bring in my 80s era pickup. It has very low miles, they can generally diagnose it with very basic tools, and parts are cheap. When I have the time to work on it myself I appreciate it for those exact same reasons.

And when you buy the car hypothetically and the motor goes out or the transmission within three months?

And it’s one thing if your car breaks down on a side street, it’s completely different if it breaks down on an interstate. If you have a daughter would you be comfortable with her driving an unreliable car? Your wife? Your mother?

Re: US car repossessions surge as more Americans default on auto loans

#103

Post by Ccecil »

MegaDeKay wrote: post #54
maxerickson wrote: post #21

Earlier quoted context omitted.

Usually it involves swapping the new tires onto the rims. It's not easy to do.

Plus balancing the new tires on those rims, and next to nobody has the gear to do that.

When I last priced the equipment it wasn't that bad costwise. In my case though it was only worth it to get rid of the whole "dealing with tire shops" issue. A close friend owns a used car dealership and they bought the mounter and balancer. IIRC...it just needed a 240v line.

I have also lost days waiting for tire shops and alignment...as those are the only 2 things I don't do myself.

Re: US car repossessions surge as more Americans default on auto loans

#104

Post by SecretDreams »

carabiner wrote: post #20
SecretDreams wrote: post #17

Earlier quoted context omitted.

Depends when you got into it. If you're an older gen, you got into that city early and are likely unburdened by high dwelling costs - instead, you've got a windfall of appreciation ahead of you. Reality is, outside of housing, city life is generally cheaper because it's much more accessible and the tax base is better suited to covering those expenses. So, older generations get the best of all worlds, per usual.

> Outside of housing > Outside of what makes it more expensive for virtually everyone, it is actually cheaper

Pull up the age demographics for any major city. The older demographics largely got into housing at more affordable times and are less sensitive to rent and mortgage prices increasing. Housing costs is a cost that OVERWHELMINGLY impacts younger demographics.

Re: US car repossessions surge as more Americans default on auto loans

#105

Post by mgh95 »

jltsiren wrote: post #88
mgh95 wrote: post #70

Earlier quoted context omitted.

> The value of the dollar has already plummeted, 10% or so this year. Compared to what? From Nov 3, 2024: the USD against: GBP (3)% JPY (1.7)% EUR (6.7)% INR 4.6% AUD 1.3% CAD .74% RMB .4% The EUR (if that is what you are going by) is unusually strong, and that's actually starting to cause issues. But the dollar isn't "collapsing".

EUR was unusually strong from 2004 to 2015. Since then, it has almost always been between $1.07 and $1.20, which I would consider the normal range.

The EUR is unusually strong, in part due to fiscal tightness by ECB (see their balance sheet L2 Liabilities here https://www.ecb.europa.eu/press/annual-reports-financial-sta...) compared to the US. This is having a knock-on effect that the EUR strengthens against the dollar, which actually causes a whole host of problems for an export economy.

It's why you see Lagarde calling for a reserve EUR; it's the only way to export EUR at this point. But that's a topic for another time.

Re: US car repossessions surge as more Americans default on auto loans

#106

Post by mgh95 »

cogman10 wrote: post #100
mgh95 wrote: post #70

Earlier quoted context omitted.

> The value of the dollar has already plummeted, 10% or so this year. Compared to what? From Nov 3, 2024: the USD against: GBP (3)% JPY (1.7)% EUR (6.7)% INR 4.6% AUD 1.3% CAD .74% RMB .4% The EUR (if that is what you are going by) is unusually strong, and that's actually starting to cause issues. But the dollar isn't "collapsing".

The BRL or CNY is probably one of the most apt comparison given the BRICKS alliance. That's where you are seeing the roughly 10% swing since Jan. (if you go back to last Oct the swing is less pronounced. IDK exactly what was happening last Oct, but there appears to have been an upswing in dollar value from Oct to Jan and a steady decrease of the dollar value since.)

In October of last year, people were betting on Trumps election leading to tariffs leading to a stronger dollar. This trend continued post-election pre-inaguration. Since the tariffs did not materialize to the level expected, the dollar weakened to its levels prior to his election.

Re: US car repossessions surge as more Americans default on auto loans

#107

Post by ryandrake »

_heimdall wrote: post #101
raw_anon_1111 wrote: post #91

Earlier quoted context omitted.

The problem with old junkers is that if you don’t have the money in cash, how do you fix a major car repair? You can get a loan for a new car with money. The car “generates income” because it allows you to get to work and hopefully make more than your car note.

Old car repairs generally don't cost as much as you'd expect, especially when you aren't paying $750/no on a loan plus higher insurance premiums. My mechanics often perk up when I bring in my 80s era pickup. It has very low miles, they can generally diagnose it with very basic tools, and parts are cheap. When I have the time to work on it myself I appreciate it for those exact same reasons.

Yea, that $750/mo that you're now not paying can be saved to pay for the occasional repair bill that you're going to face while owning a junker car you didn't take on a loan for. Or, not, if you bought a 1995 Toyota Camry or something which is probably going to outlive you.

Re: US car repossessions surge as more Americans default on auto loans

#108

Post by derf_ »

> "Distress in auto lending broadly is often seen as a bellwether to changing circumstances in the US economy, because Americans particularly in the lower-income brackets tend to put their highest priority in auto payments," said Brett House...

Or, put another way, when the bills come in, people make their car payments first, because they have to get to work. So either there are other bills people aren't paying, or people aren't going to work. Both seem bad. One purported cause of increased auto loan defaults is that people are having to make student loan payments again, although that would suggest they aren't prioritizing the auto payments.

Re: US car repossessions surge as more Americans default on auto loans

#109

Post by hamdingers »

kulahan wrote: post #80
jeffbee wrote: post #34

Earlier quoted context omitted.

Imagine having a credit score of 300 and a $542/mo loan payment on a used car. Cursed. Americans need buses more than ever.

Does anyone else hate busses, and the only response you ever get after mentioning this is "NUH UH BUSSES CAN BE GREAT"? A bus will pretty much always be inferior to a car. Mathematically impossible to run on time. It never gets you where you want to go, just kinda close usually. If one doesn't show up, there is no real feedback without an extensive background metadata system. Never as clean as your own car (unless yo…

> A bus will pretty much always be inferior to a car.

I never have to clean a bus, or put gas in it, or change its oil. I don't even have to drive it.

I don't have to dedicate a big portion of my property to storing it, just to pay to park it somewhere else when I go out. I'll never get a ticket for leaving it in the wrong place, and I'll never have to go to court because I used it wrong.

I don't have to worry about it getting stolen, or crashed into. I don't have to worry about being unable to afford the insurance or registration. I don't have any wealth tied up in it, so its deprecation doesn't matter.

Having to walk a few minutes at the start and end of my journey is a small price to pay for such convenience.

And if I ever do need one, I can rent one for less than the average American's monthly payment. In fact, I can rent the exact one I need that day, which might be a pickup today but a minivan tomorrow.

Re: US car repossessions surge as more Americans default on auto loans

#110

Post by mothballed »

olyjohn wrote: post #76
micromacrofoot wrote: post #43

Also worth noting the average new car is now $50k and the average new car loan is $40k+ https://www.washingtonpost.com/business/2025/10/17/50000-new... Starting to find out the risks of a car-centric society in a slow-burn economic crisis.

Yeah the average is high, that means there are cars cheaper than that. People are spending big because they either are doing no researchand getting suckered, or they are buying nicer cars for vanity reasons.

Or it's the only thing available.

A few years ago my car was totaled by an uninsured illegal in a hit and run, and I was forced to get another one (bought used). This was back when the bubble was even worse, and since I lived on dirt roads, I needed a 4x4. Literally the only thing I could find not clapped out were luxury models, because rich people were about the only people at the time dumping cars that weren't completely clapped out.

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