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Used car prices and keeping up with loans.

11K views 64 replies 30 participants last post by  evilwhitey  
#1 ·
Interesting article: https://www.reuters.com/article/us-...rising-old-used-car-prices-help-push-poor-americans-over-the-edge-idUSKBN1WQ1AP

Rather amazing the values for old cars and the the need to finance them for many workers.
The seeds of the problem are buried deep in the financial crisis, when in the midst of the worst economic downturn since the Great Depression, automakers slashed production. A decade later, that has made a relative rarity of used 10-year-old vehicles that are typically more affordable for low-wage earners.
According to data provided to Reuters by industry consultant and car shopping website Edmunds, the average price of that vintage of vehicle is $8,657, still nearly 75% higher than in 2010 despite some softening in prices over the last year.
It seems that the lesson of the Great recession regarding borrowing has been forgotten by many consumers and the nation is back in personal debt to the point of barely getting by and indeed
More than 7 million Americans are already 90 or more days behind on their car loans, according to the New York Federal Reserve, and serious delinquency rates among borrowers with the lowest credit scores ...
The saying goes that bad times are like low tide. When the water goes down you see what it was covering up. If the country has another recession I wonder how many financial firms are going to be exposed as having no clothes on.
 
#2 ·
Interesting article: https://www.reuters.com/article/us-...rising-old-used-car-prices-help-push-poor-americans-over-the-edge-idUSKBN1WQ1AP

Rather amazing the values for old cars and the the need to finance them for many workers.

It seems that the lesson of the Great recession regarding borrowing has been forgotten by many consumers and the nation is back in personal debt to the point of barely getting by and indeed
The saying goes that bad times are like low tide. When the water goes down you see what it was covering up. If the country has another recession I wonder how many financial firms are going to be exposed as having no clothes on.
I am currently in the market for a used car, haven't been in the care market for 7 years. Talk about sticker shock especially for pick up trucks.

As for financial firms that will be exposed, you better believe it. Nobody learned a thing from 2008-2012.
 
#4 ·
I know someone who worked at a Toyota dealer, someone came in with a nice 1976 Eldorado convertible and clunked it for a $5000 credit. It was a 100% complete good running car. They had a protocol to blow the engines on anything that came in for the credit.

One guy at work, he turned in a 2005 Explorer, another car that was nice and taken care of. Lots of the trade-in deals went for 0% loans, another attraction.

Someone I know leases cars, that is all he does and coordinates it for a lot of dealers. At one point they were considering leasing those 3-year old cars again, cheaper and probably more affordable. There was talk of keeping the action going until the value of the car was less than the payments were worth with the car as collateral.
 
#5 ·
VW also lost millions of fully functional cars with their computer software scam. They repurchased over 300,000 diesels in the US. Since they don't do emissions testing here, I'd have taken the performance tune anyway.

It always amazes me how much people suck at finances. I know multiple people with 7 year loans on used cars. They get underwater on them and struggle, but the second they can, they sign back up for more with another car.
 
#14 ·
I have a 2008 Mercury Mairner that I bought in 2007. I told myself I would never buy a new car after that as the depreciation hit was enormous. I am still diving that car with 160,000 miles on it and bad rust problems on both wheel wells. I haven't had a payment since 2013 when I paid off my wife's car, and I hate the idea of a new payment, but it is now time to get a new used car. Totally eye opening seeing how expensive used cars are.
 
#10 ·
I still use my old 2000 Chevy K3500 for my driving needs. It now has over 40,000 miles and I might have to replace the O2 sensors (got in a "Service engine soon" light and I need to figure out the cause). Bought it brand new back in August of 2000 for about $28,000. I would hate to guess what a 1-ton dually sells for new these days.

Though it would be nice to have a newer truck I could not see buying one from one of those used buy/finance places that charge 19% interest and higher for the pleasure of it all. Just seems incredible people will borrow under those conditions.
 
#11 ·
Get yourself a ELM327 or similar from the interwebs, plug it in and figure out what's up on your phone. If nothing else, that could be the manufacturer's mileage activated light that gets people back to the dealership for generic maintenance. You may be able to find the key or button sequence to shut it off until the truck hits the next mileage interval to turn it back on. My wife's van has one that trips every 20,000 miles and another I have to reset for oil life.
 
#13 ·
The OBD2 code (I have a inexpensive reader) is for Bank 2 running rich. There is several things that can cause that along with the O2 sensor. One of them is a clogged air filter. My air filter is new but I did find the filter box partly plugged up with a mice nest that I cleaned out. I reset the light and will see if it comes back on in the next few driving trips. (I only drive it once a month or so). My understanding is it takes about 50- 100 miles of driving to reset everything.
 
#16 ·
I never put two and two together but in the past I was always able to find very cheap 10-12 year old vehicles, now staying in roughly the same price range(up a bit for inflation)I am buying 20-23 year old vehicles. So I would say the article agrees with my experience.

The thought of having a 84 month loan on a new car is crazy to me. I don't think I have ever owned a vehicle (that I drove on a daily basis) for more than 4 years. I couldn't imagine paying for one that entire time and still having another 4 years before it was paid for.
 
#17 ·
Yep. This has been my experience too.

There is a reason all my vehicles are 20ish year old, and that I plan to keep fixing them until they make that illegal.

What has been going on with vehicles is really really bad. Its one of the things that worries me the most about the future. The rural way of life will be annihilated if the cheap old vehicles all go away, and the new vehicles seem to be short lived trash.
 
#18 ·
My daily is an 06 f150 (best truck ever made) and my newest project is a 97 f350 4x4 with the 460 big block.
I sold everything that had payments on it 15 years ago and went straight cash. I never looked back.
If I don't have enough to buy what I want, then I save up for it. Like my grandma used to teach us kids.
 
#19 ·
The problem is that even though you can get everything you need to fix up a 20 or 30 year old vehicle now....

Will the same be true 20-30 years from now? Will anyone be buying a cheap 2020 truck in 2040 and fixing it up? Or will all the integrated computer components needed to make it work be impossible to find?

Thats what keeps me up at night and I'm not even kidding, because lets face it, nothing lasts forever, at some point our late 90s and early 2000 vehicles will literately be falling apart and we will need something newer and I'm afraid when we go looking for a 'new' 20 year old project we won't find anything we can actually work on.
 
#20 ·
First of all, if people would quit buying those $40-70k cars, they would quit that. But, here again, the fed is causing alot of this expense with their meddling and laws/restrictions. I worked in the auto industry for 15 years as mechanic and have said for 25 years that the folks that can afford the initial price plus any repairs will sell the vehicle before repairs are needed. The folks that cant afford the $300 modules, $5k trannys, $1k to fix ABS are folks like me, and that is tough to deal with, especially since alot of folks dont know anything about research or checking vehicle for problems.
I absolutely refuse to pay more than $20k for a new vehicle. If I won lottery or sumpin (which I hardly play), I might get a newer tacoma 4x4 (no more than $30k), but for now I will stick to my 20 YO one with 175k. My truck is not shiny and new, has a few scratches, interior not great, but the truck is 100% sound, cold air, good tunes, and will be handy in SHTF.
YUP
 
#27 ·
... The folks that cant afford the $300 modules, $5k trannys, $1k to fix ABS are folks like me, and that is tough to deal with, especially since alot of folks dont know anything about research or checking vehicle for problems.
...
Fixing the new cars/trucks is not easy for the do it yourselfer. Computerized systems require scanners that can costs thousands of dollars. Construction of the new vehicles are in robotic factories where little thought has been put into repair needs down the road. In some cases you have to disassembled the dang things to get at a item needing replacement. That is if you can even remove some of the fasteners.

There used to be a story about planned obsolescence where things were designed to break down so it encouraged people into buying new. Now there is black boxes that if it breaks the only thing the average person can do is toss it out and buy again.
 
#22 ·
Dear god thats not even funny!!! I would freaking shoot him:D:

(I've been under my 2000 tundra (320K) for the last three nights trying to get everything in shape before it snows again and I end up doing it laying in the snow and ice.
 
#23 ·
If you live in the northern part of the US or on the coasts, rust is almost always a problem on used cars. I've been stationed on both coasts, and anything that was more than about ten years old was usually pretty rough. In the South, where it hardly ever snows and the roads never get salted, there is a pretty good supply of used vehicles, especially SUVs. Add in the fact that lots of people retire and move to southern states and then sell their vehicles when they get too old to drive or just want an upgrade, and the supply is good enough to keep prices reasonable.
The key to keeping good used vehicles is the ability to do most of the maintenance yourself. Car repair shops and dealers will rob you for even simple repairs like brakes, shocks, belts, alternators, starters and other consumables.
A great way to keep mileage down on a vehicle is to ride a motorcycle. If you drive say 80% of the time by yourself, dragging all that extra weight around and running up your mileage is wasteful.
 
#24 ·
gavrilo princip;A great way to keep mileage down on a vehicle is to ride a motorcycle. If you drive say 80% of the time by yourself said:
You do realize you are eating retard sandwiches with both hands?.:rolleyes:
 
#28 ·
I lean towards new cars once a old car starts throwing unscheduled car payments my way. Transmission for an older Altima, at the jobber price $1800. New Jasper engine, $6000 with the works. I was at a friend's repair shop, ABS master cylinder new for a Buick Regal is $2700, rebuilds were not available.

I have a 2012 Malibu, very good car and I do some work myself, not that it needs much outside brakes and light bulbs. My 2010 SUV is up for brakes soon, I'll buy the rotors and pads, I just put a battery in it.

The Malibu ran me $22.8k and I put down around $7k. One of the Altimas I owned, got it used for $9300 and I put some miles on it. If you can find a used car like that, you will get some good use out of it.

My 60+ year old hot rod, I fix that myself and I have over $25k into it.

I see a lot of people that lease cars every 3 years and they are accustomed to a perpetual car payment. Zero down, maybe a payment or 2 up front, put it on a credit card.
 
#29 ·
...
I see a lot of people that lease cars every 3 years and they are accustomed to a perpetual car payment. Zero down, maybe a payment or 2 up front, put it on a credit card.
This may be the eventual route I take after I hit 65. They have low mileage leases that the monthly payment is a much smaller amount than a purchase finance would be. Since I travel about 100 miles per month on average it would be no problem to stay under the allotment amount. When I eventually get too old to drive the car would just get returned to the lease company and that would be it.
 
#34 ·
Here is the Answer

You have to ask yourself why are cars and pickup trucks so expensive.

The CEO of G.M. Mary Barra makes 26 Million a year, so that means that she makes $500,000.00 a week not including stock options, bonuses, a free car of her choice, free gas, free insurance, etc., etc.

Now how many cars do you have to crank out in a week just to pay for this one person and keep in mind that there are many other top level people in that organization who are also overpaid.

So the problem is that you are being overcharged on things that you need like autos, healthcare, your electric bill, etc. because you have crooks running everything these days.
 
#35 ·
Y

So the problem is that you are being overcharged on things that you need like autos, healthcare, your electric bill, etc. because you have crooks running everything these days.

People are voluntarily paying these prices so they are not being overcharged. If they stopped paying these prices the prices would go down.
 
#37 ·
Used car lots around where I live are full of four door, 4x4 pickup trucks. I stopped and drove two used ones today. Bed looks like it was added as an afterthought and above about fifty mph they sounded like tanks and drove like an old sixties station wagon. They reminded me of the old four door construction trucks we used when I was working construction in college.
 
#47 ·
Back to the outrageous price of used cars:

1. A huge part of this is because cash for clunkers took a big bite out of supply.

2. Everyone wraps their identity into their vehicle to some extent. I paid $3200 for my car several years ago. It suits me and is part of my self image. 1987 Mercedes 190 Turbo Diesel, looks good and is as reliable as a cast iron skillet. OTOH I will freely admit that I would not want to be driving a dented up purple 2011 Hyundai which might actually have the same value. The man whose ego needs the new diesel heavy duty pickup every two years is paying a lot of money for something that doesn't matter.

3. Stand by for rapidly plummeting vehicle values when electric vehicles hit the tipping point. I fully realize that you want your big pickup truck because you live in Idaho. But the people who have 7 year financing on a Cadillac SUV are going to be way under water when economies of scale kick in on plug in electrics. The words 'debt crisis' will apply, because lenders are going to get hammered on this deal.
 
#51 ·
Back to the outrageous price of used cars:
...
3. Stand by for rapidly plummeting vehicle values when electric vehicles hit the tipping point. I fully realize that you want your big pickup truck because you live in Idaho. But the people who have 7 year financing on a Cadillac SUV are going to be way under water when economies of scale kick in on plug in electrics. The words 'debt crisis' will apply, because lenders are going to get hammered on this deal.
THAT'S your issue? Laughable/pathetic. A 2020 Edison/Tesla scamcar?
 
#56 ·
People are crazy with their cars. I bought a 99 Astro van a few years back, $ 1500 and have changed the cap and rotor. New plugs and wires. Brake pad and a fuel pump. Have drove it to Florida, went to Alaska in this van. My sister got a new truck a month after and her payments were $750 a month. Hers truck was crap and finally got repo because she couldn't afford it.
I have got cheap cars my whole life. A car is like a Kleenex, use it and toss it when your done. Buy cheap and drive for a few years and if it breaks I fix it. If I can't fix it than it's sold, scraped, or saved for parts. A year of using is breaking even and then sell it and get some of your money back, or more. If I need a vehicle tomorrow. I will go find one for under $1500 bucks, and be home before supper.
I have the Astro, a $500 91 explorer that runs like a champ, and a 1970 ford f-100 that I got in High School for $700 that I was using in October to haul rock home. I can't believe that a vehicle can still be purchased for what some people pay as a monthly payment. I saw a 96 chevy pickup Friday for $1500 that would probably be a good truck for 5 years or more.
 
#57 ·
Yep. The last car I drove before taking over my wife's hand me down 06' Caravan was an 89' Camry with well over 200k on it. It kept going and going and wouldn't die. I'd put a quart of oil in it every 2000 miles but other than that and it being horrifically ugly, it was great. My dad pushed his 90' Civic to close to 300k before he was t-boned and almost died.

I jumped at the 2016 Corolla I just picked up because it was way below blue book, in near perfect shape it had 10k on it and honestly, I have such little free time these days I wanted something dead reliable. I was worried that my grandma had never done an oil change but then later found out that she's old school and took it in every 3k miles, which is hilarious given the oil intervals on modern cars.

If you have time, the knowledge and tools to keep beaters going, it's 100% the way to go. Up until recently that's what I always did and it's served me well. I'll probably still do that when I buy my next truck since it will only be driven 3-4k a year.
 
#65 ·
I totally meant "green" as new vs eco friendly, at the moment lithium batteries are anything but eco friendly. In time the move to sodium/carbon batteries could change that, but I'm under no illusion that I'm saving the planet by going EV. LOL

50 mile range is decent for a hybrid with a tiny battery and for now is the best of both worlds. The majority of people commute under 40 miles a day, most days I'm under 30 miles which means I'd just plug it in every night (costing me under a dollar a night) and almost never use the gas motor.

Once you run out of juice the engine pops on and you're golden to run off of dino juice. I did a cost analysis on the lifetime cost of various vehicles with my normal vehicle use and I was pretty surprised with the Prius Prime's (plugin hybrid) 200k cost including gas and maintenance, it actually came out pretty cheap.

I get why people living in the boonies aren't as excited, but for those of us in polluted, crowded cities where you'd doing a lot of stop and go and have short distance commutes, EVs and to a lesser extent hybrids (especially plug in hybrids) are looking more and more appealing. If/when gas shoots up past the $5 mark, it'll look even more so.

For now I'm content to drive my Corolla and avg 30mpg for my mostly in town surface street commute and work use.