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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

#41

Post by bb88 »

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.

I found the waiter/waitress quality model was pretty effective for judging the economy. If the economy was strong, the service would be worse, since the best people could get better jobs elsewhere. And if good people were having a hard time making ends meet, they would end up in the service industry displacing those that weren't good in their jobs.

You could probably come up with similar metrics on the number of dented cars you see in a day that people couldn't afford to repair.

Or the number of people who skip out on their checks at a restaurant. Or the number of people who buy lottery tickets. Or the number of people that are willing to gamble, not as entertainment, but as a way to get some money for the next bill due date.

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

#42

Post by 2OEH8eoCRo0 »

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.

The Dacia Sandero!

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

#43

Post by ASinclair »

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.

I live next to a busy city road. The loudest vehicles are motorcycles, cars with expensive, aftermarket exhausts, and large trucks. Not all cheap stuff.

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

#44

Post by tamimio »

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 can’t understand why banks keep lending money for deals like that

Because that's literally the only way banks make money. Cars, houses, whatever -banks are after the interest money. The loan is a fake number that gets transferred from your account (as debt) to theirs, as digital numbers too, all under the "trust" that you can withdraw all of it one day. The real money in this is the interest that the bank will take. This is why if all people decided to withdraw all their money, banks would refuse, aka a bank run. In fact, this issue -the credit creation with fake digital numbers in accounts for the purpose of making profits out of the interest- is the reason why house prices are going insane beyond their actual value, it’s never demand and supply.

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

#45

Post by JumpCrisscross »

bombcar wrote: post #31
giobox wrote: post #27

Earlier quoted context omitted.

If you mean the Great Depression, the invention of mass market car finance predates it by a decade.

Let’s make it so car loans are non-recourse (they can only repossess the car) and see how it shakes out.

> Let’s make it so car loans are non-recourse

You're moving your goalposts to easily-tested--and disprovable--ground.

The flip side of limited recourse is limited liability. For houses, non-recourse lending promotes speculation, volatility and risk shifting [1]. One would expect similar effects if non-recourse lending were normalised for cars: higher prices, bigger booms and worse busts.

[1] https://www1.villanova.edu/dam/villanova/VSB/assets/marc/mar...

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

#46

Post by lotsofpulp »

bombcar wrote: post #17
Hammershaft wrote: post #9

Earlier quoted context omitted.

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.

I can envision a future (maybe even the present in some areas) where increasing prices of skilled labor and/or materials results in a structure’s price increasing even though it is aging.

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

#47

Post by testing22321 »

JumpCrisscross wrote: post #22
decimalenough wrote: post #12

If only there was a country selling cheap, reliable electric vehicles with extremely low running costs.

> If only there was a country selling cheap, reliable electric vehicles with extremely low running costs The missing middle in discussions around Chinese EVs is import quotas (and disconnection mandates). Americans buy over 15 million vehicles a year [1]. Letting China export up to 150,000 EVs into America a year, subject to anti-surveillance measures ( e.g. no phoning home), paid for by the importer and thus--ultima…

Soon you’ll want Americans to know how good healthcare is in other countries, or that people in many countries get paid time off to move home , or that people in other countries don’t go into crippling debt for education.

No, no. THAT is not acceptable.

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

#48

Post by micromacrofoot »

JumpCrisscross wrote: post #22
decimalenough wrote: post #12

If only there was a country selling cheap, reliable electric vehicles with extremely low running costs.

> If only there was a country selling cheap, reliable electric vehicles with extremely low running costs The missing middle in discussions around Chinese EVs is import quotas (and disconnection mandates). Americans buy over 15 million vehicles a year [1]. Letting China export up to 150,000 EVs into America a year, subject to anti-surveillance measures ( e.g. no phoning home), paid for by the importer and thus--ultima…

I don't even care if china is attempting to surveil me honestly, feels like there are already a dozen American companies trying constantly to collect my data so they can exploit me

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

#49

Post by JumpCrisscross »

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.

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

Blame fleet efficiency standards [1] and the light-truck loophole [2].

[1] https://me.engin.umich.edu/news-events/news/cafe-standards-c...

[2] https://digitalcommons.law.lsu.edu/cgi/viewcontent.cgi?artic...

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