This page has been archived and commenting is disabled.
Car Repos Soar 70% As Auto Subprime Bubble Pops; "It's Contained" Promises Fed
While on the surface the US economy has been chugging along from GDP-crashing "snow in the winter" to GDP-cratering "warmer|cooler than expected weather in the spring|summer|fall", with bouts of GDP-boosting inventory accumulation inbetween, in recent months two very disturbing trends about that all important dynamo behind the economy, the US consumer, have emerged.
On one hand we wrote three weeks ago that a "shocking" 77 million, or one third, of Americans face debt collectiors: a statistic which crushes any suggestion that US household credit is substantially improving based on trends in 30, 60, or 90-day delinquency, as it means that the real pain is not at the near-end of the default/delinquency timetable, but the far end, which incidentally has just as dire an impact on one's credit score as a plain vanilla default (and explains why none other than Fair Issac has jumped in to "adjust" its credit methodology to artificially boost FICO scores of these millions of Americans).
On the other hand, we have been closely following the ongoing deterioration of the car subprime loan bubble: something that both Bloomberg and the Fed have both also been paying close attention to recently, yet a bubble which nobody wants to burst, because as we wrote several days ago, it is none other than the subprime car loan bubble that allowed car production to surge the most last month since Obama's Cash for Clunkers capital misallocation program, in the process lifting overall manufacturing and Industrial Production, and thus GDP.
Earlier today Experian released its latest, Q2, metrics that tie these two very worrying trends together, namely the trend in delinquencies, defaults and repossessions.
As NBC summarizes: "The repo man is getting very busy as a growing number of car and truck owners are struggling to make their monthly auto loan payments. Experian, which analyses millions of auto loans, said Wednesday that the percentage of those loans that were delinquent or ended up in default with the vehicle being repossessed surged in the second quarter of this year."
Hyperbole? Hardly. In fact, the auto loan subprime bubble may be the latest to burst (after student loans) as the rate of car repossessions jumped 70.2 percent in the second quarter, with much of that increase coming from finance companies not run by automakers, banks or credit unions. The good news: the percentage of auto loans that end in default is just 0.62% of all auto loans. However, as everyone but the Fed knows, what matters is the flow, not the stock, and the direction and acceleration in defaults simply means that the maximum saturation point has been reached and going forward lenders will experience ever greater losses, which in turn will limit their willingness to offer subprime loans to US consumers desperate to find a house (because clearly one doesn't need to home when one can sleep in their Chevy Tahoe).
Experian also reported that the 30-day delinquency rate was up 0.2 percent and the 60-day rate rose 7 percent in the quarter. "We're starting to see a slight uptick in the number of consumers struggling to make their automotive payments on time; however, we have to keep in mind that these percentages are still extremely low," said Melinda Zabritski, senior director of automotive finance for Experian Automotive.
A chart of the Y/Y change in 60-day delinquency rates as of Q1:
Zabritski added via CNBC that "The number of delinquencies and repossessions rising is what we would expect as the auto industry sells more vehicles," "But this slight uptick is one to keep an eye on." The surge in delinquencies and repossessions is being driven primarily by borrowers with subprime and deep subprime credit scores.
The main reason to keep an eye on this "slight uptick" is that the underlying notional of total auto loan balances just hit a new all time high: in the second quarter climbed 11.7 percent to an all-time high of $839 billion, according to Experian. It doesn't take much of a deterioration in payment terms and credit quality before bad loans surge when the underlying debt is hitting record notionals quarter after quarter.
Some data: the average charge-off was $8,149 in the second quarter up $932 compared to the same period of 2013, and rapidly rising.
Of course, it wouldn't be a CNBC report if it didn't end on a positive note:
Zabritski knows many people are worried the industry is creating a financial storm that will end badly, but she says subprime sales are still far below normal.
"The growth in subprime auto loans looks dramatic because it was so restricted in the last few years," she said. "But this is not mismanaged, rapid growth. We are still well below levels we saw during the recession."
Because somehow one can compare a period in which the Fed has a $4.4 trillion in balance sheet leverage with a period in which... it doesn't? Good to know then that at least consumer subprime lending is not as bad as it was then, and instead all of the Fed's proceeds have simply made their way into the bubble of a stock market.
Finally, for the curious, here are some charts from the most recent, Q1, Experian presentation on the matter. We will update these once the latest slides are unveiled by the credit company.
The average credit score on top leased models:
The average loan vs lease payment for the top 10 most popular car models.
The top New loan lenders:
And the top Used loan lenders:
But the one reason we know the subprime auto loan bubble has burst and is about to lead to another round of devastation around the nation is one simple statement: "The New York Fed dove into lending data, and its economists found that the bubble fears may be misplaced." In other words, it is "contained."
Hm... where have we heard that before?
* * *
Don't worry though - it's not as bas as the peak of the recession!!!
"Not being as bad yet as the last bubble peak" = the new normal. pic.twitter.com/fi9bUUjKdH
— Rudolf E. Havenstein (@RudyHavenstein) August 20, 2014
»
- 51387 reads
- Printer-friendly version
- Send to friend
- advertisements -
does that mean I can pickup a cheap Aventador when SHTF! I'm waiting.
No but you can pick up a cheap, somewhat abused Boeing 777 MH17, for nothing since the MSM has forgotten all about them.
Car-a-Van
Car
Van
In-CAR-nate
In-nate
Car-nivore
Think...
http://aadivaahan.wordpress.com/2013/01/20/two-hammer-blows-and-a-random...
the solution is simple and practical
you use your house to secure your car loan from the local credit union
when you stop paying for the car, court then recognizes the credit union as the senior creditor on the home mortgage
the credit union sells your house.
anything they get beyond the cost of the car then goes to the subordinated mortgage lender
this process will clear both the auto and housing backlog
hugs,
the big reset
Yeah, it is contained like the last one.
In California there's a subprime guy named Paul Blanco. He sells cars under the logo the "Paul Blanco Fresh Start" program. Some of the wonks drive around with his plastic license plate holder on the car. It's like saying "hey everybody, I'm a fuckin' deadbeat". If I wasn't livin' it I wouldn't believe it.
Hey if your car brand ain't gettin' repo'd it ain't happening, man.
Sub-prime auto loans to people with an IQ hovering around room temperature... Who would have ever thought it could go wrong? Greed will kill us all...
Exactly what I said would happen here months ago!
Don't forget Auto Title loans either, these places have been popping up like cockroaches all over. It's only a matter of time before the lower income don't have a pot to piss in.
the percentage of auto loans that end in default is just 0.62% of all auto loans
Sounds like a crisis. Time to get in the bunker.
"...the rate of car repossessions jumped 70.2 percent in the second quarter"
It's the weather, stupid! How could the repo man do his job in the first quarter when the cars were buried under all that snow and ice?
it could jump 100% and still be negligible at 1.4%. Who wouldn't lend money at a 99% success rate?
We had a sub-prime auto bubble before and it popped. Guess that was the end of GM and the auto market in general. Oh wait, it got completely papered over!! That can't happen this time. No way, man. No way.
It's the flow, not the stock. Until the flow becomes a tsunami.
That's part of a DIFFERENT problem, actually. It turns out that there is a GLOBAL OVER-CAPACITY* for cars. Which is why car makers are in a ZERO-SUM WAR* with each other.
The workers and unions and their families care, as do Automotive execs and their Total Compensation Packages, and so do Politicians at each election cycle. But the banks don't care, nor does Wall St -- because they make money in ANY weather, as long as there is Action: VOM (Vel. of Money).
People need to either get out more or read more. Sheesh.
* Insider info from Automotive execs, talking offline and privately.
Just hand me some free money and I'll buy a car right now. I want a Bugatti Veyron.
>>Sounds like a crisis. Time to get in the bunker.
Does your bunker have a plastic number plate with similar wording as in Gringo Viejo post?
The wife just bought a new used car. Honestly I couldnt believe what she bought and how much it was. Time to consider price compression in cars. The link goes to a review of the exact same car she bought - for GET THIS $7195
http://www.edmunds.com/mercedes-benz/slk-class/2002/consumer-reviews.html
She purchased a firemist red one in almost showroom shape.
Paint - perfect
Interior - perfect
Mechanically - runs perfect.
100K miles
MSRP ~45K in 2002 dollars about 50K in today's
If you are familiar with my username then you would understand I looked at the car carefully. It is pristine. My wife is overjoyed. I however am deeply concerned that an awesome Mercedes Benz now sells for almost the same price as a used Ford or Chevy. But there is a difference. The car she bought was top shelf to start with. It spent an awful lot of time parked in the garage at home and It had regular service too. With all that going for it it only sells for about two grand more than a run down rattle trap Kia? Something is BIG BIG wrong in cars. There seems to be no middle class buyers left wanting these outrageously awesome buys. Two quick examples from the same dealership below.
http://www.galuxurycars.com/2000-Jaguar-XK8/Used-Convertible/Marietta-GA/4754090/Details.aspx
http://www.galuxurycars.com/2003-BMW-7Series/Used-Car/Marietta-GA/4572531/Details.aspx
Finally If a car like my wifes was for sale new today it would be around 50K. The car she bought is about half way through its mechanical lifespan but shows NO signs of wear!. This car should have cost me 15-20K! Instead is was almost exactly the same price as the beaters in all the buy here pay here dealerships. Go ahead prove it to yourself. Her old ride was a 2003 pontiac grand am GT. The new one 2002 SLK320 plain v6. Visit kelly blue book and compare for yourself! Almost the same. UNPOSSIBLE. One of these cars is a grocery getter with a terrible reputation the other has a top speed of 155MPH, a folding power hard top and heated leather seats! THEY NOW COST THE SAME...........
Seriously?
$10k for a 14 year-old Jaguar with over 100k miles on it???
Over $11k for a 13 year-old BMW with 124k miles on it?
I might consider paying about half that much...
You'd pay even more than 10-12k for a 13-14 year old 7.3l Ford Powerstroke with only 100k miles on it that was in decent shape...
Right but the maintenance over 5 years on the BMW and Jaguar above are going to be more than the price paid for those cars - by FAR.
and it's a luxurary car with no warrantty
it is going to be expensive to repair anything
Not my 2002 SLK.
Brakes complete with discs for all wheels $220
Trans rebuild kit complete. $500
Motor rebuild complete with piston replacement ~2K
This is of course with me doing the labor. In case you cant tell Im a bit old school that way. but if you aren't and can find a decent mechanic still willing to work you may be able to freshen up the whole car to spec and still keep it below 10K. I am playing with the idea right now of buying another 2002 SLK just so I can drop an aluminum V8 in it and make a car with supercar like performance for sub 10K. Now that would be priceless.
Exactly. I bought a Land Rover LR3 on the cheap from a BMW dealer that got it as a trade. 60k miles in great shape. Oil change at the LR dealer; $200. Me doing it: $35. (You have to drop a skid plate to get to the drain plug and filter). Diff fluid change; dealer $350; me, $105 (did buy the fluid from the dealer at $35/qt).
Luxury auto maint IS super expensive. At the dealer. Not much more if you do it yourself.
The car we purchaced does not in any way look more than a year old. It is nice enough that Im sure I could convince someone not familiar with SLKs that it is indeed brand new. The body is so clean that the car has no rust ect underneath at all. Looks like it just rolled out of the factory. Not true for my fathers Brand Spanking New Malibu. That 30K POS is already rusting underneath. He financed it too! You should have seen his face when I told him what wifey's car cost. It wouldve been hilarious if he wasnt my dad.
If you doubt my tale I have a rather nice camera and am willing to take photos/video.
Quatlity machinery is quality machinery. I will take your brand new BMW and raise you a Ferrari 250. (old car) Allowing mass media and ego to convince us to buy "New" when the same or even better is available for 80% less is not a wise move to me.
PS I agree new or used Jags break nonstop and it was a terrrible example. Do not get that car if you are poor! Shoulda put up the 2005 BMW suv for 6K instead.
Half that much......Granted check kelly blue book then buy from the private market. I bought from a dealer because she had to have that "exact" one. (you know that drill right?) woulda saved 2K more otherwise!
Hephaestus, I'm puzzled by the same thing: buying a new car is no financially sound proposition at all if you look at what you can get in the second hand market at reasonable prices. Our 13 year old - and until recently very reliable - Citroën Evasion has 245.000 km on the odometer and is now starting to play tricks on us. We regularly drive from Belgium to Austria, so I'm finally thinking about a replacement. But the difference between buying an equivalent model straight off the production line or a similar used car with enough life left to guarantee at least another 10 years of loyal service is approximately 20.000 euros. Guess what option I will go for?
Another example: I bought a 25 year old Suzuki Cavalcade in pristine condition (77.000 km, but well maintained, the 1400 cc engine is good for at least 300.000 km without any major work on it). It cost me 2.500 euros. If I wanted a second hand Honda Goldwing 1800 in the same condition, it would easily set me back 15.000 euros. And my Cade's just as comfortable (top heavy, but awesome bike).
The beauty of buying used luxury imports is they can afford to give them away if you will pay them for service. I paid $250 for a new encoded ignition key.
Like others have said, the maintenance is insane on out-of-warranty luxury cars. Especially German.
Sure, the 7 series is now affordable, but you're going to have to maintain a car that cost over $100K when it was new. There's a reason it depreciated so much.
I usually buy used. My target is 10 cents per mile based on purchase price plus all the taxes, tag, etc. I usually hit that number or better.
so you'd pay more for a car with more miles ?
lol. I suppose I should watch more carefully how I phrase things!
Ha ha ha my grandfather who built newspaper presses and made real good pay was absolutely famous for buying a VW because he could drive it for a penny per mile. If I remember correctly that was gas included!
New 1950 Beetle MSRP $1280
Gas in 1950 18c gal.
Fuel econmy 36 mpg.
$0.18/36 mpg = $0.005 per mile in fuel costs. If the car could last to 200K miles then $1280/200000 = $0.0064 per mile car cost. This gives a total of $0.0114 per mile to drive the car gas included.
Maint costs were low but I have no number. Wow $1280 for a brand new car.
Euro-junk is even more maintenance intensive than US-junk. Toyota, Honda, Nissan is about all I would ever spend my hard earned Yellenbux on. In roughly that order.
Have you seen what it costs to maintain an E65 7-series?
the most expensive car in the world is a cheap, used German car.
Like the OP...go buy a decent 7.3 powerstroke and run it to 500k+
The reality is there exists a bi-market. Market A. the Finance MARKET determines the value of a vehicle based on how much THEY CAN LEND YOU. Market B. the CASH MARKET determines the true market value of something if we were to eliminate debt - and people had to pay for things based on the cash they hold.
And thanks to the Federal Reserve with their ultra-damaging low interest rates have created a financing bubble the size of the moon, so nobody has any cash any longer.
It gets pretty clear that the cash market is maybe 5 - 10% of the finance market - and shows in the depreciation curve of vehicles.
Once you understand this you can learn to buy everything for 10 cents on the dollar. For example I purchased a very reliable 2002 F250 Ford Turbo Diesel 7.3 with Artic wolf package, chipped, enlarged exhaust. Cost $5000. New price at least $60,000. 10 cents on the dollar. Sure it has rust under the wheel well - and people always tell me that what you save in buying price you pay in maintenance. But when I consider that I can buy 10 of these trucks for the price of a new one - it would give me a lifetime of driving. I've done it for 15 years, maintain them and drive them, let someone else deal with the depreciation curve. It's all total *bullsh*t*
@ Gringo Viejo: "It's like saying "hey everybody, I'm a fuckin' deadbeat"
Did you know that... In the Credit world, "Deadbeats" are the people from whom they can't make any money, because they pay OFF their credit cards at the end of each month. Ironically, they have a high FICO score and low interest rates. The clients with Low scores (and high interests rates), are the ones who are making them rich. The 750+ crowd is getting 0% car loans, so they are hardly making banks rich. As opposed to the blue-collar flunkies and field workers, who are getting raped at 10-20%.
In a Repo case, all the Middlemen MAKE MONEY. And given FRB -- you do understand how Fiat Currency + FRB work, don' you? -- the Banks ALWAYS make money. No matter how "bad" their client is, or how badly they bitch (for PR reasons). The End User is the one who is feeding the entire Value Chain, the entire industry. Same as it ever was.
So, Old Gringo... the next time you play "Financial Snobbery", think of which demographic segment is feeding the Automotive and Financial Industry. Cause it sure as hell isn't me at 0% interest on my car loan.
p.s. Let me give you but one example of how the "rich" (FICO >750) do in car deals...
This entrepreneur has a high-maintenance wife, who wants to trade in her 2011 Sequoia SUV for a 2014 model. It's a Limited Edition, so she wants all the bells and whistles on the new one. She wants the Bling, but he does not want to pay more. So what happens?
He negotiates with the dealership's GM, to trade in the 2011 model for a brand new 2014 model, but (get this!) it's been bumped up to a Platinum Edition (with build-in LCD-TV). His monthly payments for the 2011 were $730. His new payments are $739, Zero Down. Which includes the 2 year Free Maintenance, of course. Even for oil changes.
So cry me a fucking river of how bad some guys have it.
p.p.s. Oh, and the Salesman got a "mini" ($75) on a $65,000 car, because officially... "The At-Cost Deal took out all profit". Yeah, right. That's just from the Front End Profit. It so happens that the Dealer still money from the car maker in the Rear End, of which the sales guys don't see a fucking dime. 80% of car salesmen barely scrape by and most of these quit in 6 weeks to 6 months. 20% make good money, who been around for years and know all the games and tricks. But the guys making the real money are sitting behind the Desk, playing Excel games, and the Dealership management.
When you THINK you're "screwing" the Dealership because of your "oh-so-clever online research".. you are NOT. They are Pros, you are not. They make money, no matter what - if you buy from them. The ONLY people getting screwed in those 8 hrs shopping and haggling sprees are the poor Sales slobs, whose income is ALWAYS in the Front-line of all price negotiations. In those cases, a sales guy can literally make more money flipping McPinkSlime burgers than selling cars, if you go by $/day earned.
And THAT is how that business works, Tylers, boys and girls.
- Kirk out.
Actually, I did get a great deal on a 2006 Toyota I bought new several years ago. It was during late November before the new models had arrived. It came lifted with chrome rims and and nice Dueler RT Revo 2 tires. It was fully loaded with every single option available and was a limited order package at that. Long story short, I simply was patient and incrementally persistant. The salesman did nothing but watch and fiddle his fingers while the manager and I negotiated. I will never forget him getting up from our table and saying, "that vehicle is too much vehicle for you!!" Lol. He would later accept an offer I had the salesman pitch before I walked out. The sticker price with after market accessories was high 37k. The sticker price was 33,900. I got it for 31k OTD with 10k down. The finance manager was shocked when he saw my deal. His mouth opened up. They sold me the 7 yr/100k extended warranty for under a grand. I got suckered for that but it did cover a couple of major issues around 85k miles.
I screw the dealers, And they do not make money off me. I have never in my 40 years on earth bought anything from them.
The closest I came was a 12 year old dodge caravan with 380,000 km that some coked out salemen was trying to peddle to me for $5000. I considered it until the next day I was at auction and saw the same vehicle for $900.
I scratch my head where vehicles would even come from if everyone was like me - and just simply REFUSED to deal with car lots. I want to give thanks to all the stupid people that did business with them, depreciated their vehicle while they made massive payments on it - and then sold it to someone like me that only pays 10 cents cash on the dollar for it.
Oh - I forgot my T4 last year was $174,000
What a *retarded* investment. Paying $739 / month for a vehicle in perpetuity? Look at it this way - a $739 / month payment could buy you a house - which you could rent out for $900/month easily put $150 a month in your pocket..
If we *really* want to learn how business works look at Warren Buffet driving an old beater while his net worth was in the 100's of millions.
Yeah, I hear that huckster's commercials every day on the way into work. There are a couple of car lots in this area, "Triple Crown Motors" and "Auto Credit" that are even lower on the financial parasite scale than even Paul Blanco. The folks who drive around in the overpriced beaters are too dumb to change the license plate frames out and they wear the subprime IDs like a badge of honor. I am kind of glad that they identify themselves though. I stay way back. These are the types who also like to drive around uninsured or constantly monitor their rearview mirror opportunistically looking to be rear-ended.
J.D. Byrider around here. Yeah, look out, give this guy coming in his jalopy a wide bearth. Don't piss him off, he's got nuthin to lose.
This guy figured it out; South Park Mexican - Mexican Radio
Home catching hell cause I love my weed
Baby can you please let your husband breathe
Trying to dodge death and trying to dodge jail
Old damn friends trying to do my gal
People use to call me a bum from hell
Laughed at my car when my muffler fell
http://m.youtube.com/watch?v=WUtCdkhrmdM
Pretty funny!
I was cooking up an on-ramp behind a Black BMW 760Li with 22" rims, and a license plate frame that read "Premier Auto Leasing".
I guess I must have been too hot on his tail, as when he merged into highway traffic, he nailed the throttle, spewing dual clouds of black smoke, as he accelerated.
I'm scratching my head, thinking: "If you're trying to impress anyone, why the hell not ditch the frame, and let people think that you may have actually purchased this piece new from the dealer?
"No problem. We own (insure) the Super Senior Triple A tranche of this asset backed security. The odds we will lose any principal (pay out a claim)are practically zero! We are printing money!"
- Something I heard pretty much every day in early 2007 right before subprime blew up
I haven't bought a new car in 10 years, I'll enjoy choosing from thousands of near new repossessions on sale for 30% of retail.
In dealerships now. No need to wait unless youre going for a sub 10K late model Bentley. In that case give it a couple more years and it will get there. The key is to choose a car just over the age for banks to want to finance. No finance = No buyers No buyers = 70% price drop. I am living the dream right now my friend and you can too. Tomorrow is today and our dear leaders have destoyed what was left of a free market. Welcome to the land of expensive Ford's and cheap Benzes!
I am 55 yo and have yet to buy a new car. My '68 Dodge Powerwagon will almost certainly out live me.
If I could get me one of these, it would probably be the last vehicle I would ever buy as well...color me jealous that your 68 is holding up so well...
It takes an act of congress (or parliament) to change the status of the senior note holder. It doesn't just switch when you take out a new loan.
Like GM bondholders you mean.
Exactly, was on the wrong end of that one myself...didn't realize the King could just throw out the bankruptcy code...
A-Noy-Ying
Id-I-Ot
Think.....
http://pimpmyblog.com/
roflmao...
Buying but really renting...bullish!
It would be perfect if states hit them with property taxes too
"It would be perfect if states hit them with property taxes too"
I believe they do in Dallas county Texas. And yearly registration is basically a property tax. In Illinois a car not registered, even if garaged, for a few years can generate a lien against the owner. When it is subsequently registered in the future they will demand payment for prior years.
Conclusion: You don't own it.
An American, not US subject.
General rule: "If you have to pay the state to keep or operate it, you don't own it."
@HH
So you're saying it's Pimped Out;)
....And how does this "fundamental" data reality affect US equities? UP UP AND AWAY!
Move along.
Explains GM' s 72 month 0%,4k cash and 90 days before first payment current offer
Only 72 months? They'll not sell any vehicles that way. 120 months and no payments for 72 months, or GTFO.
Damn!!! Think I need to buy a couple tow trucks and start a Repo business.
A better business model would be to get a nice new one at zero percent interest, then part it out on Craigslist.
Let the Repo's pick up the frame off the street.
I was victimized!
But but but they have the title.
Just remember: "The life of a repo-man is always intense."
But think of the best movie soundtrack!!!
Pablo Picasso by Burning Sensation
When the shit hits the fan by Circle Jerks, etc etc
Some seriously cool punk grooves right there. Brings back memories of good times.
PS Don't forget Iggy Pop or The Juicy Bananas-"Bad Man"
And a reality TV crew to follow you around..............
Yeah, That was A Great Film (Repo Man), Harry Dean Stanton and Emilio Estevez. Now if only The Supermarkets would bring back The Generics, remember, The White Label with The Blue Bands and just The Name of The Product written in Black Block Letters (Beer, Corn Flakes, Green Beans etc.) :) MartyFlesh
A six-pack of "Swill," IIRC.
Good Times!
Dow 20,000....
Making loans to corps to buy back stock at all time highs is an even riskier bet than sub-prime IMO. That trend will be even worse than this.
Even with a 70% increase in defaults, they are still less than one percent of all auto loans. Plenty of room for that number to grow.
When 30% = less than 1% we are at now aren't we.
Slight Uptick...lmfao.
More and more Americans simply can't afford the gas let along the car.
that's the beauty of it. those who keep making the payments can't afford gasoline which keeps the price reasonable. imagine if they were all driving paid off twenty year old crown vics or something like that.
maybe POTUS will explain how good this news is at his presser 'scheduled' for 12:45 today...
hey-I have a 15 yo crown vic
runs like a top, old farts car but practical for my 4k miles a year
Right, right. that is where these 5,000 and 7,500 mile per year limit leases come from.
They know that after:
$3,500 down
$695 Dealer Fee
$895 Bank Fee
$285 New Policy Fee ($395 for FICO<600)
YOU DON'T HAVE ANY FUCKING MONEY LEFT
To drive your $199/month lease payment car anywhere.
Yep, they get plenty. And the leases are the worst if you can't write em off for business. It's all down the toilet after a few yrs.
There's towing places that sell cars, usually for the city or county. Obviously choice is limited, but can buy a serviceable car for $600. Maybe you have to pay back registration, but let's say with all that and maybe some maintenance you're only up to $1500. It's not perfect, but it's way better than being up to your neck every month forever...
My Wrangler just sits in the driveway. I ride a bike on either side of my train commute. Keep one locked up at the home station and one in NYC I've had 3 mountain bikes stolen in the city and found the perfect combination is a $100 cryptonite lock and a piece of shit lady schwinn with a basket. The bike is so faggy no one will rip it off! It saves a ton of gas and I like the fact that it has no bar between my legs so I can't hurt my mangina.
LOL!
When you ring the bell, does it wheeze out "queeeeeeef?"
No, but the seat smells like baccala
Can't wait for the ALLL assumption reset (frequency AND severity...) to hit the pnl at the end of 3Q ...ought to be interesting.
I keep my pick-up truck in a locked garage... no way they gonna repo my truck!
L.I.O.L.I Lock It Or Lose It
Why should you get to keep "your" truck if you aren't making the payments you voluntarily agreed to make?
Sshhh...
Thats crazy talk, man.
Dont you know that personal responsability is dead in the USAA.
And if the finance company batch filed the financing papers, instead of individual filings, well then, of course you get to keep the car.
Probably in the garage attached to the house that you stopped paying the mortgage on 5 years ago.
"personal responsibility" is a con-game when the leaders are criminals. Obama's lack of criminal prosecution of the bankers executed on the "moral hazard" the Fed undertook. It was the worst possible response. In other words, keep a high reputation among those you work with directly, screw the corporate beast.
I printed up some money, now I can loan clownbuxs at usury to you. I set the market prices with my money printing operation. Fuck you, pay me.
Nick, I agree that the banking system is corrupt, but car loan rates are currently at 4.03% (http://www.bankrate.com/finance/auto/current-interest-rates.aspx), hardly usurious, and no one is forcing you to take the loan in any case. It seems to me that if you do take out a loan, and you willingly sign a contract to repay at agreed-upon terms, it's a little late to claim that you get to breach the contract and keep the car just because the lender is evil.
Amish, I think I mentioned this about a week ago here. I have a "Money & Banking" (ECON 104) textbook from 1982 I could let you have cheap.
The concepts in it are all antiquated now but you could use it as a reference guide to post some more quips like these.
Let me know.
Oh, thanks, JR, just leave it open to the chapter about how breach of contract is OK if you don't like the lender---you know, the one you voluntarily approached and asked for a loan.
^thus guy would walk into the oven, carrying his kids, if the contract was properly drawn up and recorded at county hall.
Usury is making money because you have money! It is outlawed in all major religions. Comercial banks practice the worst form of Usury anyway. The problem is that when you take that loan the interest you pay back does not go into the local economy instead it pumps up bonuses for people far away who had nothing at all to do with any of it. In essence every commercial bank loan made asset strips the town it was given in. The bankers are not after money per se. They are after your labor. They want you to work forever in some job so they can take everything you produce in interest payments. Thats what Citi's Live Richly commercials were all about. You work like a bitch and they live rich!
If you took out a 30YR on your house at the wrong time congrats on buying three houses. One for you and two for them.
Got a nice loan on a car? Awesome - your'e buying one for you and one for them.
see how this works? Its a scam!
This is how slums are made from once thriving cities. Lets say the whole income for everyone in some town is 1 million a month. Bankers will extract 1.01 million month in interest until the town goes bust. Then they repop everything and start over with new suckers.
Understanding a little about modern banking is the closest I have ever come to believing in the Devil. It causes so much pain and suffering that there are no words for it other than PURE EVIL.
You are hanging on to that quaint notion of fair trade between honorable men. The money is printed out of thin air, backed by violence, and loaned to a smuck who can't afford the transportation because he is outbid by all the free money being created, hence he needs a "loan". Do you see my point, and how the idea of fair trade, and market prices is perverted and broken.
Why is it my fault if I can't make the payment? It's Obama's fault!
Look into how long the average person keeps a vehicle without making a payment on it. Enlightening. Not short.
The insurance companies don't like it a whole lot. But they are all in it together aren't they?
Banks
Automakers
Insurers
Credit reporting "Bureaus"
etc.
I have a '92. It is mechanically sound, it goes places that would make your average suburbanite shit their pants, and most importantly, it's paid for.
You need a title loan bro. You are wasting precious time by not tapping equity and getting into the market. Cash in hand buddy! People without payments are terrorists against America.
The moar the loan, the more patriotic you are. I'm surprised this foundational principle of our country is not being taught in publik skools nationwide.
Good to see you TDS.
Good to see you too SK! Busy summer, but I'm back to slumming around the 'hedge.
Skools do not offer any instruction regarding money; how to earn, save, and spend wisely.
No instruction, no learning, no critical thinking skills, and NO incentive to save.
Credit - it's what's for dinner.
What's the payment? All you need to know bitch.
Quite fascinating isn't it? They try and teach all of the fresh new cogs all the skills they need to generate as much capital as possible. But nary a peep about how to preserve it.
Double.
Nice to hear I'm not the only one that owns a moped.
but, but, why are used and new car prices so frickin' high!
Because the payments are low. The last time I was in a dealership looking at cars a black woman was looking at cars. I overheard her talking with the sales person who wanted to talk price. She said she didn't care what the price was and only wanted to know what the payments were.....
I'm glad one of my kids was there to hear it too. Great father-child teaching moment.
That tactic is from selling copiers. Copiers were the WORST to buy, they always wanted you to lease them at $XXX per month, and $0.0X per page.
That is how the entire credit industry has operated for decades Rip.
That is one of the reasons they passed a bunch of consumer protection laws to protect those who refuse to read the large item contracts they are signing. 40 years ago if you said that you'd walk out with a seemingly nice payment.... for the next 25 years.
Used car prices are high compliments of cash for clunkers.
Think of how many perfectly good used cars were literally destroyed, and critical good parts were destroyed with them, that could have kept other cars running.
Come to think of it, that was mentioned in Brave New World:
"Ending is better than mending"
This sounds like a very serious problem. Clearly, Experian needs a little S&P style schooling... I hope Melinda Zabritski's resume is fresh.
Bullish nailguns
On the subject of repos, I was at the county court this am waiting on a judge to sign an order.
The clerk told me it would be awhile, so I went ape watching as I'm prone to do.
They had two judges hearing foreclosure cases, and both courtrooms were packed with
lawyers and defendants.Thought foreclosures were down according to govt. and quasi govt. sources.
You could have fooled me, and maybe they did.
"Cash for clunkers" worked. So did the down payment program the Feds did in my view.
Piling on debt with more debt remains the problem. The volume of used cars up this way...let alone used car dealers...is off the charts. The highways are darn near abandoned as well. If you add in a discount for battery powered vehicles you'd see the price of fuel continue to collapse inside the USA powering growth in energy exports.
Never gonna happen of course.
Cash for clunkers did work, it completely obliterated a large part of the stock for future cheap used cars, forcing the subprime people into much newer vehicles.
It also killed a good portion of the automotive repair and recycling ecosystem. It's stunning just how much damage a fucked up peice of legislation can do, and just how bad the broken window fallacy really is.
I know people in car repair. They say these exact same things. They are disgusted every time somebody says cash for clunkers was a success.
Yes it "worked", especially for me (I saved $4,500 off my list price $9,600 Versa). As for conversion to electric, it is inevitable. The issue will be when gas tax receipts drop to the point where general taxes are needed to maintain roads.
Gas tax receipts are also dropping for many people do not have the disposable income they once did, ca. 5 to 10 years or more ago to go on the road trips they once did.
Or, one simply got fed up with paying more and more in tolls and fees, and decided to simply stay home in protest.
Also, if one does not have a job to drive to, one most likely is not going to drive a vehicle to the job that is no longer there.
The miles driven link, below, says it all.
http://www.advisorperspectives.com/dshort/updates/DOT-Miles-Driven.php
This issue is already coming up in some states. What's fascinating is there are several methods to tax per mile driven -- tax tires (which are already taxed, so it's just raising the tax on them), read the odomoter on a regular basis (e.g. inspection), or install GPS units as logging odometers. One is easy, one is minimally invasive, and one is nazi-level shit. Guess which one gets pushed the most.
Tax tires, huh? Did you know there is a growing market for USED car tires? One goes flat, $20 will get you a pre-owned, steel-belted, vulcanized rubber tire, fitted exactly to your existing rims! Free inflation and mounting!
Cash for Clunkers was an ummitigated disaster. Once again those with bad ideas (and no knowledge of paperwork requirements) prevailed.
A reality show where those responsible for Cash for Clunkers get shot dead at the end would actually be a show I would watch.
we bail out the banker when they FU
how about bailing out the GDP
lets have a debt jubilee & start everyone off with a clean slate
that is the pod door the FED will not open...
keep asking though....it is the only way out of this current situation...
They have another, better way(for them) Woar.
Winston Bhai, if you are ever in India again, please tell me where, I'd like to come and buy you a nimbupaani (lemonade) and listen to a few of your stories...
Maybe I will one day
I would really like to do the drive from the plains upto Kathmandu again.
Absolutely incredible.
The only kind of "debt jubilee" I can stomach is one where everyone - in debt or not - gets an infusion.
Imagine the $7,000,000,000,000 that went to Wall St. and the GSEs for their bailouts, went to the 115,000,000 U.S. households instead? That would have been $60K to each household. I always liked Robert McHugh, Ph.D.'s proposal (way back when): Refund the last 3 years Federal tax, with a minimum of $50K to each household, and with the stipulation, 50% had to go to pay off debt, if there was any.
That is crazy talk. Just insane. all those people (ok most) would have paid down debt and spent money locally. We just absolutely can not have that. That would ruin everything built since 1913. Everything!
Silly rabbit - what about the $17 Trillion the Federal Reserve secretly infused into the European banking system. It only took a congressional inquiry to get the Federal Reserve (who has never been audited in it's history and is privately owned) to admit to it.
https://www.youtube.com/watch?v=1QK4bblyfsc
lets go to the video tape
https://www.youtube.com/watch?v=9QpD64GUoXw
Do those two babbling bald em'effers have a couple of brain cell to share between them? What a couple of morons! And to think that one of them has a PhD. What a joke!
Don't see any Hyundais or Chevys in the average loan scores. Guessing those scores were too low to register on the charts.
Repo men will become a very risky job. Shoot em in Texas all the time
Upgrade to a tank.
Nah, you are way off base.
You want to get in touch with your local, friendly, ISIS jihadist and see if they will sell you a slightly used, former Iraqi M88A2 recovery vehicle. Armored out the ass and already has the mods for your repo needs.
http://www.army-technology.com/news/newsbae-supply-additional-m88a2-reco...
What kind of world do we live in where people who can't afford to buy cars can't buy cars?
Don't worry, that'll never happen. I know a kid with a part-time job at Walmart who bought a brand new car, only to lose it a few months ago.
She's got another one now.
what does Mr. Yellen drive?
bernanke - with a strap-on
A green Infinity.
w/ automatic transmission, power steering, and MBS airbags.
"They say geniuses pick green... But you didn't pick it..."
Driving is for the "little" people.
Yellen of course takes a chauffer-driven limosine.