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The Wheels Are About To Come Off This Bubble
Bubbles are always obvious … in retrospect.
Here’s one you might not see coming.
The Car Bubble.
People are taking out eight-year car loans.
This is – or ought to be – alarming. The automotive equivalent of the zero-down, no-doc, adjustable rate mortgage on a $500,000 McMansion circa 2004.
You know – just before the housing bubble popped.
New car loans used to be 36 months (three years) and then 48 months (four years). Back when the economy was sane.
Today, the typical new car loan is 72 months (six years). This is almost double the formerly typical length of a new car loan.
But even that is not – apparently – enough to keep the music playing.
Enter the eight-year loan.
Which might be ok, if cars were not appliances.
Very expensive toasters, basically.
Though modern cars are longer-lived than the cars of the past, they are – like any other appliance – something you eventually throw away because eventually, it will wear out. Or cost too much to fix – relative to the value of the car itself.
This is why cars always decline in value over time. It is the nature of the thing.
With an eight-year loan, the odds are high that it will begin to wear out – and cost you money to fix – before you’ve paid the thing off.
Then you’ll have a car payment and repair payments.
On a car that’s not worth very much anymore.
Are people stupid?
Desperate?
Or, on dope?
Actually, they are on credit – and debt.
Just like before.
Stretching out the loan from four to six (and now eight) years is a way to make a car you can’t afford seem affordable. To hide from view just how much a new car really costs.
Consider:
The average price paid for a new car this year was about $35k, a record high. The year prior, it was $33k.
But the average family income in the United States is around $55k. And it has been around $55k for at least a decade.
People are buying more car – with less money.
Sound familiar?
It ought to be obvious that the $55k family cannot afford a $25k car. Even a $15k car is a financial stretch given a $55k pre-tax income.
Some quick math:
A four year loan on $25k at about 3 percent interest works out to a monthly payment of about $555. How many families living on $55k can afford a $555 monthly car payment? (Don’t forget the taxes, the tags and insurance. Plus the gas. So really – conservatively – about $700 a month.)
The answer, Alex, is – not many.
Enter humbug financing.
The six-year loan.
Now the payment is “only” $380 – which seems more manageable. But it is a fantasy, like believing the hot blonde escort you rented for the night is really into you.
Eventually, the bill is presented.
The eight-year car loan is the equivalent of a really high-end escort.
One with STDs.
Because an eight-year loan is a guaranteed loser. Worse, arguably, than the no-doc, zero-down, adjustable rate house loan… because at least the house is a place to live in; has more than transitory value.
It is not merely an appliance. Not disposable by design.
Unlike a car, a house will usually still be worth something a decade after you bought it. You might not make Monopoly money on the thing. But if you bought in at a reasonable price, you will probably not lose Monopoly money, either.
In this way, a house is still a traditional way to “store” money. It is realistic to think you will at least get out of it what you put into it.
With cars, this is almost impossible.
Even if you do not use the car. Which of course defeats the purpose of owning the car. It would be like buying a house and then not living in it.
A car’s value lies chiefly in the fact that it can be used for transportation. If it is not used, it is functionally worthless. But if you use it, inevitably, its value decreases as the miles accrue and the years go by. Eventually – after about a decade – it will be worth perhaps a fourth of what it cost you to buy new.
This is called depreciation – and she is a heartless bitch.
Most cars lose about 20 percent of their purchase price value before two years have elapsed. Five years marks the Event Horizon for the majority – the point at which their retail value has slipped to about half what they were worth when new.
At 72 months – six years out – the typical new car is already close to being under water, if it was financed. Push that loan out to 96 months (eight years) and it is all-but-certain you’ll be gargling seawater.
Which, if it affected just those who bought beyond their means, would be unfortunate but economically just.
Unfortunately, this bubble, like the housing bubble, will affect all of us when it pops.
And, before it pops.
Humbug car financing has caused car prices (like home prices, pre-bursting bubble) to rise generally – for everyone.
It is almost impossible to find a new car without an LCD touchscreen, 17 inch “rims,” a fancy stereo and (of course) AC, power windows, locks and cruise control. These have become almost givens.
The problem is, they’re not being given away.
Now add in all the stuff that’s not on the sticker – but which still pads the bottom line. Or did you think six air bags (and all the rest of it) was a freebie bestowed by the car companies because they care so very much about your safety? They – the car companies – are just middle men, really. The government decrees – the car companies build – and we pay.
All of us.
Including those of us who’d choose – if we could – to skip the six air bags and the LCD touchscreen, too. Because we’d rather live within our means than live with perpetual (and ever-rising) debt.
Eventually, the music will stop – and some people are going to find themselves without a chair to sit down on.
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But my wife wanted a Beemer. And I need a Hummer.
Long Tesla.
Teslas are great cars - to lease.
I asked the girl at Hertz for a Hummer and she said she wasn't a prostitute
HD has been doing 84 months on their super overpriced bikes for years? Nothing new.
After 8 years the bike is either collecting dust in the garage, carport, yard, mobile home dirt road after being dropped several times or it has vibrated itself into component parts, in a box in the corner of the garage, carport, yard, mobile home dirt road........
Yeah, things fall apart, IT'S SCIENTIFIC..........RETARDS!!
This article is way out of date. People take out 30 year loans to buy cars now. They first get a 30 year home loan for $45K at 3.6% and then go to the Mercedes dealer and buy that coupe they always wanted.
When the tide goes out, we'll be able to see who's been driving underwater...
My son got a Victory Gunner for $10K. Paid cash. The thing is a tank. I think he did OK.
Long Volkswagen.
But my neighbor just got a new car, why shouldn't I get one.
Hey, if Mr. Sono is getting a new car, so am I.
If you like your car loan you can keep your car loan. If you don't like your care loan, you still have to keep your car loan.
The truth is- they are going to try and get their interest money one way or the other. Larger rate- shorter term. Lower rate- longer term. I have a long term note on one rig and I simply make double payments. With a 1.99 rate it's hard to justify using your own cash- although I did put 20% down.
"9 Series"
As I've posted before, a car used to be a status symbol because either 1) you'd saved for it or 2) you were financed, which was exceptional two decades ago and really rare even three decades ago. The further back you go (and lower in price) the less you find car financing agreements.
Today however, any schmuck can buy a car because almost any dealer will finance something just to get it off the lot, so car as status symbol is dead, it means nothing. I see people driving new cars and just assume that it's most likely financed. I see people driving fairly well maintained older cars and assume they're smart enough not to go down the new car rabbit hole.
Dealers are doing this because they know that absent further incentives they can't pull anymore demand from the future. It's like an onion, once you peel away and 'finance' one layer it's gone, you have to go after the next one or the proverbial hangover (as they call it) will arrive.
My 18yo car is doing fine, it's a pollution generating TDI, and she just got a front brake job yesterday courtesy of me. It's simple and I can fix it without resorting to $100+ / hr dealer service. Oh and it has no GPS location system or NSA snooping devices on it either...which is an added benefit.
I used to be able to work on my cars but not anymore. Maybe you on on to a niche market - semi-classics that can be owner maintained and may increase in value as collectables.
Its amazing how much work I would do on my cars in the past. I could tune a carburated car with breaker point ignition so it would purr. I've replaced cylinder heads, cam shafts, water pumps etc. Used to run a fifteen or twenty year old car which I kept in top notch mechanical condition. Used to find parts I could not repair at wrecking yards. Learned it all from books and asking those who knew more than I about wrenching. Always felt totally confident taking my car on long trips.
I did not make a lot of money back then so most of it was out of necessity. Things have changed so much in my life that I no longer have to do such things and it is probably a good thing. I am told that auto mechanics now get more training than dentists.
I look under the hood of my new car and it looks like a plate of spaghetti to me.
remember when you could look under the hood and actually see the ground underneath the car?
Dr. Shark and I could pay cash right now for a pair of new Tesla Model S's (but why do something so stupid?)
Instead of 'Conspicuous Consumption' the Dr. and I prefer 'Inconspicuous Accumulation.'
What does Dr. Shark drive?
A 13 year-old Kia.
What do I drive?
A 5 year-old Kia.
Best warranties in the business (5-yr, 60,000 miles), and, to date, virtually no out-of-pocket repair costs (other than oil & filter changes).
Paid cash for both of them when we bought them.
Paid cash for both of their predecessors,
Paid cash for both of their predecessors,...
I prefer staying out of debt, and I don't like subsidizing Banksters...
"Though modern cars are longer-lived than the cars of the past" The writer of the article doesn't know much about timed breakdowns in new cars that use special parts that are meant to break around 60,000 miles after warranty expires, whereas, cars of the past could go 200,000 miles easily, you will seldom find that in newer cars. This is because they want us to keep getting a new car every 3 years, and make them easily disposable, like new iphones that cause previous models to become obsolete even though they are fully funtional, people think they want NEW, MORE, BIGGER, FASTER, etc.
Planned obsolescence as the big 3 were doing back in the late 60s/early 70s. Honda and Toyota saw an opportunity and withing a few decades took a massive chunk of the market away from Chevy/Ford/Chrysler. So, maybe the Chinese can repeat that hat trick? Alas, the Chinese are not capable yet. '62 Fairlane with a '91 Mustang 302 and AOD (non-electronic) tranny. Bring on the EMP event!
How about a shout out to the auto insurance scammers.
Vehicles financed for 72 months rapidly depreciate. The terms of the financing moast likely dictate full coverage...and the premiums *never* go down, ever. DOH! It's just another ripoff.
I mentioned that fact to my agent Friday. Odd, how car values depreciate but insurance never goes down- only up. We were having a huge debate on why my homeowners insurance does not cover contents in my garage.
Oh how I hate those theiving fuckers.
The real beauty of driving a nice older car THAT YOU OWN is you don't have to carry collision coverage on it--at a cost of an extra $1500 per year, on average, I'd guess. Self-insure.
The economics of owning a nice older car are compelling. Especially if you have a decent knowledge base of how cars work.
You don't have to do all the work yourself . . . though youtube videos will allow you to do anything if you're inclined and able. Put a big monitor in the garage and make your teenager follow it. Or hire one of the many excellent "We Drive to You" mechanics on craigslist, a surprising number of whom are certified, if that matters to you.
Older is seriously better.
Timely to my situation right now. Fixing wife's vehicle at the moment, it's an old warhorse that I keep safe and reliable. I love working on my vehicles as know the work done right and with care sweating the details. Rock Auto for most parts so cost of maintenance minimal while enjoying the satisfaction of doing it myself and done right. Real motive here is to accumulate more tools, if you have the right tools, the work is easy and enjoyable.
Yup, you pick up tools along the way with each new job--if you start out with only a screwdriver, pliers and a crescent wrench, say--but you save a lot of money with your sweat and time while learning important things and accumulating a massive war chest of tools financed by your savings on repairs, which will make future repairs dirt cheap. Especially if, depending on the item, you use used parts.
Cars have gotten far more complicated and less friendly with all the shit packed beneath the hood, but fucking youtube will guide you through pretty much anything you could possibly need. Take pics of your own engine before you start so you know where the fuck the hoses and wires belong, then just follow the video. A cheap, decent-sized flatscreen in the work area allows you to pause and rewind your chosen video as you go along, no memory required.
And all the little tools that can make life so much easier, from knee pads to lights to ratcheting box end wrenches to air tools, are reasonably priced, if not downright cheap for the pain and time you save.
Here's a special llittle tool most people don't think about or know is now only a couple bucks:
http://www.amazon.com/gp/product/B00EQNCMTY?keywords=usb%20borescope&qid...
Used it inside my car door that wouldn't open. Will be using it alot of places that I used to cuss about not being able to see wtf I'm doing.
And, I gotta say, if you do decide to have somebody else do the work, you at least are a very knowledgeable consumer. I love doing things myself, but I also love not getting ripped off by some sob who makes a living that way . . . and for all the talk about how women are red meat for predatory mechanics, I gotta say that college-educated white men are an even bigger target. Having come from the working class, it shocked me at first, but I get it: While a lot of mechanics will do the right thing, being "gallantly" protective with women customers, they are far more often driven to exploit the guys who look like the next class up, the "boss" class. That they don't feel bad about, they relish it. It's their chance to show the uppitty class that would ordinarily be looking down on them their comeuppence, rub their bright, clean faces in their pretentious ignorance with a vengeance.
At the very least, one has to be educated in order to not get raped by the industry from every direction and in every orifice.
Sorry. The music is still playing. And the record player just keeps skipping and skipping.
Bankers have one product, debt,
They need to shift it.
And they've figured out a way to steal money from people that don't have any.
Just give it to them.
what if the residential real estate biz was as 'efficient' as the car-biz?
can you say, "WHOLE NEW WORLD, BUBBA" ??
Do you oligarchs want people to make it to their McJobs or not?
"Stop hitchin' with the monster man, it was bad plan. but I had to get town..."
At 72 months – six years out – the typical new car is already close to being under water, if it was financed...
many roll their last under water car note into the new car note which means they are seriously under water on their vehicles all their lives. that is the other part of the reason for the ever increasing duration of car loans.
I've never been so happy to own a 15 year old POS outright. LOL.
+1 a paid off car = freedom
Not such a POS if it could run for 15 years. My impression is that from mid-2000s cars are almost by design tend to fall apart right after warranty expires with few exceptions. Gadgets on wheels, which are too complex to fix by yourself and too costly after a certain amount of time to fix at the service. It's as if they were designed with financial services industry needs in mind, i.e. debt rolling over and customers screwed twice or thrice: vehicle value depreciation, interest, maintenance, insurance etc.
My 2006 Chevy truck has issues, but it's long since paid for and the $1000 a year I put in it for repairs is cheap compared to replacing it.
Bought a used minivan with a 36 month note.....couldn't get a 2 year note....put 60% down....dealer tried to convince me to put less down and stretch out the loan to 60 months....was tempted but decided stacking more wasn't the best plan at this point
I have been using my autos for business for almost 40 years, averaging 30K+/yr.
At first, I bought new, and traded about every 2 years, but in the 70's you needed to do that as Detroit was pumping out such junk. Over time, I got tired of the depreciation and started looking for low mileage used cars. That worked out very well, and by the 90's Detroit had started getting it together and the quality steadily improved. When I realized I could easily get a lot more miles out of a car, I stopped trading so often. I bought a '94 Caddy that I put almost 200K on before trading it, and that was the beginning of my philosophy that I should just drive them until no longer feel like they are dependable. I keep them clean and well maintained by a local mechanic I have used for almost 20 years.
Used cars have lower tax and insurance rates, too.
And here is something else to think about if you can use your car for business. You can deduct $.55/mile (adjusted annually by IRS to reflect the Petrol prices) for business use. Assuming 30K miles = $15K expense re-reimbursement. It does not matter if the car is brand new, or if its 20 years old - you can still deduct $.55/mile. I can find very nice low-mileage used luxury cars for $15K with just a little effort., and in 3 years time, I have $45K in expense re-reimbursements on a $15K auto. If I keep one 4 years, which is normal for me now, the company has paid me back $60K for that $15K car. Of course, I do have the gas & maintenance expenses, but those are minimal on a relative basis.
In a couple of years you will see the car dealers with adds that say....we will buy you out of your old loan if you buy a new car.....and the dominos keep going...Latinos love the 8 year loan..as they will keep the car for that long...and probably live in it....
Which is why they will roll out the 10 year car loan soon. They already have 10 year boat loans and that's even dumber.
The best 2 days of my life. 1 - When I bought my new boat. 2 - When I sold that fucking money/time pit.
50-ish yr old woman at my local convenience store always has an under 2 yr old sports car parked outside. Latest iteration is a high end Camaro convertible, gorgeous ride. Maybe she has a rich husband but odds are he is out digging ditches and the kids are fucked for an inheritance. Debt slaves will seek debt like moths to flames.
BOAT: BRING OUT ANOTHER THOUSAND.
According to Donald Trump, the 2nd best day in a man's life is when he buys a yacht. The first best day is when he sells it.
Before the repo man takes the Beemer, take it out to a demolition derby to test and see how well it does.
With all the tracking they can pickup what's left of it.
https://www.youtube.com/watch?v=lciHCXQFkNk
bmw mini cooper "no paymenrs for six months, o down, 299/mo."
here's what people thing these days: next crash is coming. I didnt pay last time. I wont pay this time. I can drive car for free for at least three months. bankers got away with murder. why shouldnt i?
this is what my neighbor told me. in the last sixyears, he has had, medacaid, unemployment, disability, and food stamps. he thinks its funny.
im the sucker that still pays
"bankers got away with murder. why shouldnt i?"
Exactly! The banksters recieved trillions of taxpayer bailouts.
F them!
... like believing the hot blonde escort you rented for the night is really into you ...
You mean she wasn't??? Man, that really bursts a bubble.
I suppose her telling me I was the best she ever had wasn't true either then. Bummer!!!!!
I love old cars my newest one is a 98 Dodge Dakota and my oldest one is a 86 4runner all cheap to run and all work perfect , screw this gas guzzling computer controlled modern shit.
I got an 03 4Runner that leaks steering fluid but is otherwise OK. So I refill it with stop leak when it gets low. But I find myself eyeing the new Trail version - hold me back, tie me down, and call the priest for an exorcism.
My next car is a scooter.
That's what most drivers do
when they drink and drive and get caught.
You are not alone.
I don't always purchase new cars, but when I do I make sure they don't get paid for till 6 years after they are worn out.
totally agree with you abitdodgie new cars are so over technologised it is ridiculous. built with stupid gimmicks, i just want one with a stereo and lots of reliable power. I bought my ford f150 during the crash of 08 from a guy who couldn't afford it. for cash at 60%off for a 2 year old truck. still driving it and loving it low insurance rates no debt. The suckers who sign up for these loans will be walking soon. lol
Yeah that's what really holds me back on a new car. It's like selling and buying a house. The transfer costs are out of sight. I figure between sales tax, property tax, and increased insurance cost I would drop another $5K AFTER paying for the stupid car.
We have here in the Great NorthWet a 96 mo. Interest free loan for new homes,..oops, my bad... Mattresses..
I remember buying used cars for $50 to 150 and putting a few hundred into them and having great transportation for years. And no, i'm not even close to being a senior.
I bought a 1968 Chrysler Newport for $150 that I ran for five years. 383 2bbl 273 rear end. Easy to maintain and always started in the winter. Great mileage when using a light foot but still able to bury the needle (+135 mph) when steppin' into it. Did all my own wrenching.
In the mid nineties parts were hard to find as higher steel prices lead to many older cars being crushed for recycling.
Now I take my two year old car to the shop for an oil change. At least I paid cash, new for it and hope to get another four or five years of motoring before buying a new one. I will start saving for my new car next year.
The worst thing about buying a car for cash is the dealer trying to sell you frivilous nonesense by making you deal with the business manager upon delivery. Dealers actually prefer you finance thats why you rarely see any incentive for cash purchases
Something I learned when I sold motorcycles is that the dealer gets a percentage every month when you finance through them. Huge margins also on enhanced financing products such as disability insurance.
Yeah, but the car repair guys love them. You have no idea the bull they can feed you (along with their bills) as they constantly try to figure out what the hell is wrong with them. Just keep installing new parts in the area it seems to be in before you get mad and take it back to the dealer who really slams it to you.
SoDamnMad - Yep. My womans 2005 Highlander is in good shape. But it had a problem where occassionally it would stall or not start. A repair shop wanted $400 to throw a new fuel pump in.
After about an hour of Googling felt certain it was the idle air in take valve. Took cover and hoses off, cleaned the hell out of the grease and carbon making it stick. Worked like a charm and cost me 20 minutes of time and $6 for the cleaner.
I move into a new place next week. Buying metal ramps and will do all repairs myself. My father in law said I make good money why would I do that? Because I certainly dont make $300+ an hour for my labor.
My car is a 2001 Mercedes SLK. Started fixing that myself in 2011. Repair shops must think I am a tycoon or something for what they want to charge.
>At 72 months – six years out – the typical new car is already close to being under water, if it was financed...
You've been under water since the day it was purchased.
>Five years marks the Event Horizon for the majority – the point at which their retail value has slipped to about half what they were worth when new.
It's lost half value at 3 years.
This guy needs to learn to read his own graphs.
But I need the car to get to the job I hate, which I'm terrified of losing, because without the job, I wouldn't be able to make the payments on the car I need to get to get to the job I hate...
This is the definition of debt slavery, and it's built into the New Normal.
I logged in to give you a greenie. Our bankster overlords would have us think that it's all good.
This is one of the core priciples of the Matrix.
Keep the slaves perpetually working to shed their debt shackles, only to don new ones as soon as they finish off their last payments for that shinny gotta have it item that everyone os talking about.
Robbing future demand, is there a problem ?
Krugman/ Hiliary have the answer. For crying out loud, the lying bitch cited Paul Krugman last night. She really must believe her own press clippings.
Best value is a 7-8 year old car that was well maintained. Fix the front end, transmission filter and flush, couple of new CV axles, some brake work, new tires and you can go 100k.
Yeah, yeah, how can I support the "new" economy if I buy used? Buying new makes sense for underwear...
Saw on craig's list 93 Taurus with 70k for 1700.00. Not salvage and super clean. Out of style but throw in a new blue tooth stereo! Again it is subversive to buy used anything....
Could someone please explain how to upload a picture on Z/H?
Even the Master of the Universe has to become a Tyler-certified contributor first.
It's MASTER OF UNIVERSE not 'Master of the Universe', LudditeBoy.
p.s. I just want to post a chopped & slammed 50s Merc.
So, the Mercury is only twice as old as you.
Perhaps 3x ?
Typical Master wannabe - how's the basement working out this winter, duuuude ?
It's about 11 years older than moi. It could be a 49 Merc for all I know.
I use
http://postimg.org/
sign up - upload images - copy link to clipboard - paste into comment.
Hope this helps.
Thanks for that, logicalman, it worked.
http://postimg.org/image/rd3u8osan/
There is no tin like old tin, Tyler(s)
"With an eight-year loan, the odds are high that it will begin to wear out – and cost you money to fix – before you’ve paid the thing off."
Did you look at your own graph right below this statement where the value finally goes above the loan balance. Any time someone will loan you money for 8yrs fixed for 2.5% you should take it and enjoy life. (ps bought 2 new cars in my 58 yrs. ) PPS cant get this off bold. Damn PC.
That's NOT a Buick, that's a DEBT Bomb!......
At 72 months, it's nothing more than a very long lease with an outlier chance of you owning it when you're done. The realistic scenario here is that people are going to buy fancy cars and walk away when it becomes too burdensome. I'm sure some consultant has done the math and realized that even with lunatic financing, the lender will still come out ahead when the payments made and auction proceeds of the repo'ed car are all included.
You can Walk Away from a house but a car loan.
But it is a fantasy, like believing the hot blonde escort you rented for the night is really into you.
The idea is to get into her.
You lost when you started to talk about months and stuff but I pushed on and struggled through the article to the point where you explained in parentheses that 36 months is three years – finally some clarity.
You lost me again when you used numbers for months but spelled out the word when describing years. All was recovered when you went on to explain (from experience I assume) about escorts and STD’s …. No I’m sure the twenty year (240 month) blonde whore thinks you’re the best ………
...
Power Wagons are cool to a large swath of persons residing in the USA.
About 10 years ago I paid $900 for a '68 Dodge 1-ton Powerwagon, to use while doing construction work on my house. Thing is beastly. I think it could last 100 years. I'll put maybe $2,000 into the original 383 one of these days, but only so it doesn't smoke so much.
Of course it doesn't have air bags, fancy rims, a CD player (does have AM radio!), heater barely works, rough ride. Bed is scratched, paint is aged and there is some rust. But it also doesn't have (or require) 22 different kinds of emission systems. No computers. No diagnostics. No smog check (so far). No anything you don't need.
No monthly payment.
Not a sumemr goes by some Mexican doesn't come up to the house to offer me cash for it. Mexicans know their equipment and don't need air bags. I don't even ask what they might offer because I'm keeping it.
I keep looking for an older (pre 1971) truck, rust free with a six cylinder engine that I can fix myself. Most older trucks around here have been hopped up with big block engines. I don't want to buy someone elses headache even on the cheap as the local economy implodes.
My neighbor sold me his 64 GMC 4x4 swb for 1500 back in 94 so he could buy one of those new Dodges.
I've still got the 64. He's 2 or 3 trucks in front of that fancy new Dodge.
But this summer has been renovation time after 20 years of faithful service. Built a 350 to replace the 400 (so I could put it over in the RV). New Desert Duelers-- 13 years and 150k on the last set. Still had tread but they were more like solid rocks than flexible rubber after that amount of time.
It's exempt from all emissions laws. Seat belts were options in 1964 and therefore they can't make you wear one. I only have to put plates on it once every 5 years (Collector Vehicle). If I hit a tree with it, the tree is going to go "owwww".
The speedo doesn't work real well. Actually it works better than the previous two-- since I wore both of them out completely. The truck probably has 750k on it and I hope to make it to 2m if I live long enough.
The Heartbeat of America. Yesterday's Chevrolet. And tomorrow's EMP-proof super survival ride.
I know all about cars and computers. Maybe that's why I don't care to drive anything newer than about 87-88. If I can't look in the engine bay and see the ground, I'm not interested. People keep telling me I could make all kinds of money starting up a garage and fixing cars. The trouble is, I have no interest in working on these new overcomplicated pieces of shit. There's a reason mechanics charge so much. New cars are like new computers--a headache. Give me a carburetor and HEI ignition any day. Keep a spare ignition module and diodes in a tin can behind the seat. Or just as well, a Ford EEC-IV fuel injection system that has maybe two components that could possibly go bad. When everyone else is standing around on the interstate scratching their heads because their electronic shitpile got nuked and gradually slowed to a dead stop, you'll see me cruising down the median on my way to the shelter. Sure, I'll give ya a lift. Gas, ass, grass, or gold, what ya got?
It's all about "how much a month" to the vast majority, and yes they are that stupid.
You could make the auto loans 20 years and they would sleep on the side walk to get that great $49.99 a month deal!
Stupid can not be fixed, but it can be ass raped over and over again!
Wmbz, so true, anymore the first thing out of sleazemans mouth is "what can you afford per month".
I sometime feel like I live in the twilight zone re: the cars people drive. We live in a rural part of the country and last night I commented on the cars at a stop light with us - 2 2015 Audi A6's, a newish Lexus gs350 and a BMW X5. It's probably $200k+ of depreciating assets in an area where the median income is $43k.
I think the responses on this page indicate how socially acceptable it is to be part of the American debt machine - take out an 8 yr loan, 40 yr mortgage, 20 yr student loans, $100/month cell phone bill, $100/month cable bill....
No thanks I have plenty of adult beverages to invest in.
But no payments for 90 days is really sweet! Worry about all that 'other stuff' later.
1 in 50 people don't know how to take care of a truck for 5 years, much less 7 or 8. Bunch of fucking write offs for somone.
Cars are improving. A car can easily last 8 years with normal use.
Most cars have $8 or 10,000 dollars of marketing in the cost... pure waste.. plus transport fees.
The true cost of a $35,000 car is much less, like $10,000 to $15,000 the rest is profit, marketing, warranty, overhead...
Domestic cars should always be cheaper.
Sell us cars at true cost, plus overhead of factories, and 35% profit... the price would be much less. Get rid of car dealers and have direct buy.. fixed price. You don't bargain when you go to Walmart.
Make all cars fully loaded so there is no waste in adding options.
Stop changing models... waste of money... many tried and true great models are no longer available.
Same with websites... stop changing them.. often changes to websites suck and people hate it...
Business make changes to soak more money from you,and think consumers always 'want' something new... it's not true.
if it works - let us use it.
Love me some Eric Peters. Great website
The best wasting asset to buy is one that is in good condition and already fully depreciated. Cheap to buy, cheap on taxes, cheap to insure, cheap all around,cheap parts.
Therefore a used car is always better than a new car - given that it is a good model, and in reasonable condition. Same with any tool.
Really, only the rich and fools buy new cars, unless they can write it off, even in some cases it makes no sense. People buy things just because they can 'buy something new'
Frugal people use something for the duration of it's economic life, or reasonable time to hold it. best to be frugal. And after collapse best to learn to repair things, as well as grow food, maintain solar systems, etc etc... time to learn new skills. The masses will not know anything...
I buy new but I typically run em for six or seven years and I don't finance. That means I can pay less insurance. Although I don't wrench anymore, I do look after my stuff.
When I was young I ran beaters. Sometimes they didn't look like much but I kept them in top notch running order.
Maybe I have become lazy or vain but I am very grateful that I can afford a new car and pay cash every six years or so.
I see many folks who make much less than I who typically have a new car (and a much more expensive model) every other year. I do pretty good but I could not afford to that myself.
They are grateful for EZ credit.
Hmm, all this reminds me that I need to have Gary change the oil in my 1990 Dodge Dakota. :>D
Yes, homes have intrinisic value because you can live in them. More and more people are finding that they must live in their car instead. So perhaps we can think of that eight-year loan as a mortgage.
You mean they can't just move back home like most of these millenials can or have mommy and daddy give them their rent and car payments every month. It seems so socially acceptable especially here in the Boston /Cambridge area where parents are now buying condos for their college age kids to live in so they will have their own home when graduating
https://www.youtube.com/watch?v=Y-GxcejOlFA
Yall forget how the fiat games are played. This monopoly runs on force. Thats how it goes in MMT. So the greenies simply force everyone to by a new electric or hybrid by outlawing older cars. Logic and reason have nothing to do with it. Its about force period.
I suspect it would be an unenforceable outlawing.
Tptb are pretty good at force.
Every single new car I ever bought I felt dirty when I sent in the last pymt. There is always a flip side to every argument and I meet so many men(?) who could not change a spare tire if their white ass had a flat in Compton on Friday night. So, some folks are dependent on new cars. I hate it for them. I honestly can't see myself ever buying new again. Buying used is the optimal $ path but only if you have some mechanical knowledge and skills. I have wrenched on most all my own stuff since 16. Been fucked over by too many mechanics so I prefer to screw it up on my own and can do the job twice and still come out ahead on money. Being lower middle class my time is cheap. I also get bored with many vehicles. Who wants to be stuck in a no longer new car for 8 yrs with no way out? Judging from my small community and all the new rides running around town, many do.
So you call yourself lower middle class but somehow can afford to buy a, new car? I know lower middle class is subjective. For example in nyc where sales tax alone is 8.875% on the purchase price someone making 100,000 a year with no children or spouse would be considered barely middle class. Many people seem to keep cars longer as well once you leave manhattan but insurance alone these days is around $200 per month.
My point is many people especially those who don't have mommy and daddy to make those Rent +car +car insurance payments each month are constrained by what they can afford. Like with the housing market,, the lowest rates in history caused prices to go parabolic. New vehicles don't appreciate at least not yet at the rate new houses do. I don't understand how someone who is supposedly lower middle class can afford monthly payment on average price of & $38000 for a new car plus insurance
"Cars."
"Drive."
"Red Barchetta."
"Arrested for Driving While Blind."
"Drive My Car."
'Merikans will continue driving the road to perdition until the bloody, bleeping end of the road, collectively careening over the cliff into the abyss.
In the meantime, enjoy the ride . . . if you can afford it . . .
Just purchased a 2016 Nissan Frontier. Man,,, talk about the scams. No,,, the truck is good,,, it's the dealers. Didn't notice the little thin paper alongside the sticker. Also during the scam we the marks we were so occupied with the different bells and whistles the salesman was going over we didn't notice they never went over what we were paying other than full sticker as he put it. Turns out the fantastic Nissan travel package they were fronting as a Nissan Promo we were in fact paying $795. Also there was something I have never seen... a Market Adjustment of $1200.
Well, we got home and started to go over the paperwork my Mrs. Rejected noticed the $795 and the $1200. Looking up the Market Adjustment we found some dealers marked up a vehicle because it was had to find or had a very special package that was hard to find.
We returned to the dealer the next morning with all the questions. The $795 package supposedly returned $1300 if all the coupons were used. 4 of those coupons were $100 for referring more customers to them... not bad eh?,,, We were paying for our own referrals! LOL. Along with these referrals were coupons for a whopping $2 off oil changes and all the coupons had the be used within two years.
Well we got that refunded. Now for the $1200 Market Adjustment. They at first said it was because the truck was hard to find but I pointed out to them every vehicle on the lot, regardless of price, had the Market Adjustment and the Travel Package. Well,,, they would not refund that, so we cancelled a $1500 extended warranty package we also purchased. Their argument was we signed an agreement and that was that. It was solely up to us to catch their scams. I replied that just because we missed the strip of paper showing the mark ups, that did not preclude them from ensuring we knew what we were paying. And listen to this,,, the Manager even acknowledged that if they were upfront about the scam no one would purchase their product. And according to them the state of Florida is aware and approves the scam putting everything completely on the shoulders of the mark. Also put some of their scam on Nissan saying Nissan MSRP wasn't enough for them to operate their business mentioning they would not be able to provide the soda fountain. Well at least my $1200 went for a good cause,,, lol.
The whole experience was horrible. It is amazing what the parasites at the state of Florida allow these thieves to do,,, while we pay their salaries.
It's ripoff city in Florida. (probably the same in every state) Go over every detail of the sale and ASK if there are any expenses they have not covered. Even then you may miss something but at least you tried.
As for the sticker,,, the salesman removed it when we went for a test drive,,, folded it up with the paper showing the markups and handed it to us. We never thought to look because we had already seen the MSRP from Nissan. I also corrected the salesman during the buy telling him he was $2000 too high but he said that was for the special packages that we assumed came from Nissan. At that point the Salesman knew we never saw the markups and still never told us.
I hope bringing to light my carelessness on this sale will help some that are thinking about a new vehicle.
Edit: Also we was told we was losing a Nissan Promo of $500 because we were NOT financing the truck. Remember the old days when cash got you a better deal... ROFLMAO.
I bought a new Subaru Forester a few years ago and paid cash. Unbelievable the bunko nonsense the dealer's business manager tried to sell me on. I feel sorry for people who finance through the dealers because so much of that crap gets rolled into the financing.
Was checking out the Foresters last week, they offered +$100 over invoice, 2 years free maintenance and 2 year 0% finance for anything on the lot.
Was actually a good deal, but the car is noisy. However it's one of the few manual trans you can still buy.
Did not go for it. Cannot bear to part with the 2001 Saab 9-5 Aero 5 Speed Wagon. Will keep putting $$ into it until the engine dies.
The 15 year old features and performance are worth $60K today, paid $35K in 09/2000...
And just put new shocks on the '97 F150. Nice machine.
My 1932 Ford Roadster is a gem. If it rains you get wet, cold in winter, hot in summer, but it is reliable, easy to work on, looks fuckin' COOL, chicks dig it and I own it! Fuck new cars!
I picked up my 1969 VW fastback when I was 19. Put most every kinda vdub motor in it over the years. Now days its sportin a sweet little TD and its my daughters. We prolly gonna hang on to it as long as we can.
and what kinds of escorts do the Tylers prefer?
Fast, clean, and fresh-smelling, like their cars?
Best Truck - 72 Datsun - indestructible - manual trans - died at 340K miles.
Best Car - BMW Bavaria
Found it with a pushed-in grill and fan touching the radiator for $100 - elderly owner said the Grandson was responsible as she signed the title. Pulled out the front end with chains and a tree and it started. Reliable transportation from Maine to Kansas to Florida. All the stuff under the hood was accessible and I could do the few repairs necessary and all of the maintenance with the help of Chiltons and a factory manual. At the time, found German engineering and manufacturing were way ahead of Detroit pig iron and that 6 cylinder engine was totally reliable. The single major failure was the automatic transmission at 240 thousand miles - $1800 at local recommended shop in '95. Sold it to a collector in 2010 as it turned over 380k miles.
Actually I am looking into a 8 year loan.. being 90 years old..I think I deserve a new car...