Car Repos Are Exploding. That’s a Bad Omen • Hacker News Board

Re: Car Repos Are Exploding. That’s a Bad Omen

#91

Post by piva00 » Tue, Jul 12, 2022, 9:23 AM UTC

endre wrote: post #81

nunez wrote: post #61

Emphasis mine: > Most of the loans on recently repossessed cars originated during 2020 and 2021, whereas origination dates are normally scattered because people fall on hard times at different times; *loan-to-value ratios, or the amount financed relative to the value of the vehicle, are around 140%, versus a more normal 80%*; and many of the loans were extended to buyers who had temporary pops in income during the pa…

even if that is the case, market will rebalance itself. it always does.

Surely it will. Like in 2008, we just offer human suffering as sacrifice to the Almighty Market.

Gotta keep feeding its rebalances, no point in fighting or challenging the will of a god.

Re: Car Repos Are Exploding. That’s a Bad Omen

#92

Post by everybodyknows » Tue, Jul 12, 2022, 6:18 PM UTC

Godel_unicode wrote: post #72

everybodyknows wrote: post #56

Earlier quoted context omitted.

Further to that, was the price agreed to before the salesman knew how you would paying, cash or credit?

You get the best deal (lowest total cost) by finding out which bank pays the highest financing incentives to the dealership (by asking the dealer), financing the car through them, then paying the whole loan off immediately. It’s all part of the negotiation.

Fascinating. Highest financing incentive suggests a commensurately high interest rate. Can we assume there's no pre-payment penalty hidden in the contract?

Re: Car Repos Are Exploding. That’s a Bad Omen

#93

Post by dredmorbius » Tue, Jul 12, 2022, 7:45 PM UTC

RC_ITR wrote: post #90

dredmorbius wrote: post #84

Earlier quoted context omitted.

Look at (inflation-adjusted) price then, rather than total sales volume or units.

I mean, sure. I wish you luck in forecasting with that.

Consumer goods prices swinging low relative to inputs, profit ratios falling, or price and quantity moving in ways to suggest weaker demand, should all be determinable with some degree of confidence.

That requires richer data than strictly following sales volumes, of course.

But the basic principle is still one of supply and demand, and following both shifts. The ability of retailers to adjust prices in near-real-time to demand shifts changes the behaviour somewhat. It doesn't demolish the concept of market function.

Re: Car Repos Are Exploding. That’s a Bad Omen

#94

Post by Godel_unicode » Sat, Jul 16, 2022, 5:23 PM UTC

everybodyknows wrote: post #92

Godel_unicode wrote: post #72

Earlier quoted context omitted.

You get the best deal (lowest total cost) by finding out which bank pays the highest financing incentives to the dealership (by asking the dealer), financing the car through them, then paying the whole loan off immediately. It’s all part of the negotiation.

Fascinating. Highest financing incentive suggests a commensurately high interest rate. Can we assume there's no pre-payment penalty hidden in the contract?

You should check, but generally pre-payment penalties on loans have become pretty rare.

Re: Car Repos Are Exploding. That’s a Bad Omen

#95

Post by altarius » Tue, Jul 19, 2022, 12:35 AM UTC

danaris wrote: post #88

altarius wrote: post #74

Earlier quoted context omitted.

Is it any worse than paying $650 literally every month (avg car loan payment now afaict)? The problem is that people can't save. It'd be prudent to buy the car for $2k and save the remaining $3k somewhere to cover repairs instead of the 5k down payment. Also, to be fair, what used to be a $2k Toyota was probably more like $5+k lately.

Yes, it is worse. Because if you get a new or newish used car and have to pay $650/month, each month you still have a decently working car. If you get a piece of junk for $2k and then have to put $1k into it again periodically, during that whole period you have either a pretty lousy car, or a non-working car. And, as noted by the GP, that will often mean you need to call out from work. Which, for many of the kind of…

Late to respond but I'll do it anyway.

I'd estimate about 75% of the US population would have access to an Uber when the car needs to go to the shop (and $650 would buy a few rides). I wouldn't buy a 15 y/o Fiat/Chrysler but a Toyota or Honda should be decent enough not to need repairs every month, maybe every 6?

And (another thing most people skip) that can help a lot is preventative maintenance and regular checkups that you can schedule at your own convenience that would catch a lot of problems proactively. And you'll have to bring in your leased car too lest you want to get dinged even more at the end.

A cheap car isn't just something you buy and forget, it needs some planning and care that i honestly think most people can't handle. Probably because they're so overworked as you said. But is paying be nearly $30k over 3 years really going to get you ahead, just so you to get you reliably to your job every day to pay for that car? Or is it worth the effort to plan and manage a shitty car for 3 years to save 15k?